A firm's strengths are its resources and capabilities that can be used as a basis for developing a competitive advantage. Examples of such strengths include:
There is no one right way to do a SWOT analysis. In
fact, it is important to realize that while a SWOT helps
guide brainstorming and issue seeking, it does not ensure
that the issues identified are either strategic or
actionable. As with any other tool, the skill of the
practitioner and the appropriateness of application define
the quality of results. Generally it is helpful to follow
a few basic principles:
Get others involved — A
group process that encourages a free flow of ideas and
building off each other's input can ensure the robustness
of the analysis. Strong facilitation (read strategic
guiding, not overbearing involvement) is necessary to
ensure that consultation and engagement add value.
List the top of mind issues first —
It is okay to state the obvious and surface
individuals' perspectives. Getting a "lay of the land"
and discovering what others feel is strategic —
often an eye opening experience — it
can keep analysis from locking into a particular
perspective too early in the process. From a practical
perspective, having something to put on the blank page is
helpful in starting the process.
Find structure — Since the SWOT merely
puts issues in high level categories, it is often helpful
to add additional structure to the analysis to ensure it
covers the appropriate ground. Normally this means using
checklists as an external means to validate the
comprehensiveness of the analysis. Less formal validation
of the analysis can be implicit through the use of a
seasoned practitioner in the process.
Generate, cultivate, and harvest — It is
better to allow a free flow of ideas rather than analysing
and debating every suggestion in depth. Critiquing every
suggested issue is more likely to derail creativity than
generate tight analysis. Issues can be prioritized and
culled at a later stage.
Refine through iteration —
This should not be understood as a continual questioning
of basic principles but as a refining of issues through
continual polishing throughout the process. This approach
goes hand in hand with knowing "when to say when".
Inform the analysis through research —
After an initial scan, gaps can often be identified. A
willingness to go away and research and or ask
stakeholders targeted questions will ensure that the
analysis is more than a summary of opinions.
Don't be motivated by structural aesthetics —
While it is tempting to fill in the blanks to make
the analysis look pretty (i.e. trying to come up with a
weakness for every strength), the tool should inform, not
overwhelm, the analysis.
The SWOT Matrix
From Scanning to Planning
The art of strategy development involves taking a careful
look at the organizational and environmental situations
and developing an approach that will encourage
While the SWOT provides a mechanism to provide the
prerequisite scan, it does not and should not provide a
ready-made strategic plan.
Getting from a scan to a plan is in fact an art. As
mentioned earlier, individual factors should not be taken
as individual objectives: there is a need to optimize the
mix of organizational efforts to create a best fit between
all of the factors. This is where a clear mission is
helpful in weighting the importance of the factors that
have been identified. Clarity and comprehensiveness in the
identification of factors and in the scanning process will
ensure that foundation for strategy development is solid
and that the planning exercise is not a pretence for
repacking current assumptions.
A firm should not necessarily pursue the more lucrative opportunities. Rather, it may have a better chance at developing a competitive advantage by identifying a fit between the firm's strengths and upcoming opportunities. In some cases, the firm can overcome a weakness in order to prepare itself to pursue a compelling opportunity.
To develop strategies that take into account the SWOT profile, a matrix of these factors can be constructed. The SWOT matrix (also known as a TOWS Matrix) is shown below: