How to use a SWOT Analysis?

Author: Steven Bonacorsi

- SWOT offers professional managers an effective evaluative technique to aid the decision making process.

- It can not find the solution for you, but it will ensure that issues are: identified, classified and prioritized clearly, showing the problem in terms of key underlying issues. Decision makers can then see the answer.

- It's a four-part approach to analyzing a Companies overall strategy or the strategy of its business units. All four aspects must be considered to implement a long-range plan of action.

Why use a SWOT Analysis?

In any business, it is imperative that the business be its own worst critic. A SWOT analysis forces an objective analysis of a Companies position via its competitors and the marketplace. Simultaneously, an effective SWOT analysis will help determine in which areas a company is succeeding, allowing it to allocate resources in such a way as to maintain any dominant positions it may have.

SWOT Analysis is a very effective way of identifying your Strengths and Weaknesses, and of examining the Opportunities and Threats you face. Carrying out an analysis using the SWOT framework will help you to focus your activities into areas where you are strong, and where the greatest opportunities lie.

Why Bother to SWOT?

The economy stinks. So why take the time to bang your company over the head doing a SWOT analysis when so much is out of your control? No question that the current downturn is impacting some businesses more traumatically than others and a lot of disappointing business results can be blamed primarily on the general economic climate. But look around. A high percentage of U.S. businesses are surviving the pain, and many are even thriving. During depressed economic times, there are still lots of winners--who typically win not by sticking with their past game plans--but rather by focusing on some new thing(s) that are under their control.

A Basic SWOT Analysis

You can develop the basic analysis in a brainstorming session with members of your company, or by yourself if you are a one-person shop. The business of management today is characterized by complex issues and continuous change. Frequently the related decisions and actions are characterized by trying to understand the complexity of the issues involved so that an appropriate decision can be made. While this kind of applied decision making is not an exact science, SWOT analysis is internationally known as a method of understanding the issues which are involved. In doing so, ideas can be shared between managers and even integrated into a wider picture for subsequent analysis.

Use SWOT analysis to help you and your team reach the best solution by:

- Helping decision makers share and compare ideas

- Bringing about a clearer common purpose and understanding of factors for success

- Organizing the important factors linked to success and failure in the business world.

- Analyzing issues that have led to failure in the past

- Providing linearity to the decision making process allowing complex ideas to be presented systematically.

How does SWOT analysis work?

- The strategy is to look at the organizations current performance (strengths and weaknesses) and factors in the external environment (opportunities and threats) that might affect the organizations future.

- Once the attributes for each section have been identified it is possible to determine the point of balance. Eventually the points of balance of strengths versus weaknesses and opportunities versus threats can be plotted together.

- For example, an information technology department needs to determine the strengths and weaknesses of its people and its technology. It also needs to make sure the IT strategy complements the Companies business goals. The department head needs to ask: What is each staff member good at? What are they not good at?

- Project leaders also must consider opportunities and threats -- or customers and competitors. How attractive is the market or direction they're considering? What's their market share and cost structure?

- To get a better look at the big picture, consider both internal and external forces when uncovering opportunities and threats.

Internal Analysis:

Examine the capabilities of your organization. This can be done by analyzing your organization's strengths and weaknesses.

External Analysis:

Look at the main points in the environmental analysis, and identify those points that pose opportunities for your organization, and those that pose threats or obstacles to performance.

Key points: Once the SWOT analysis has been completed, mark each point with the following:

- Things that MUST be addressed immediately.

- Things that can be handled now.

- Things that should be researched further.

- Things that should be planned for the future.

- Now that each point has been prioritized, set an action point for each and assign it to a person, add a deadline.

- Although the SWOT analysis will assist in identifying issues, the action plan will ensure that something is done about each one. With complicated issues, a further brainstorming session might be done to analyze it further and decide what action to take.

- The SWOT analysis results should be reviewed every few months to determine if anything has changed and what has been achieved.

- The "Brainstorm" is best used when setting up a new project or organization, works best in smaller groups than a SWOT session, and can be effectively used in the transformation process when the participants are a smaller group of managers.

- The observations generated by the participants should not include any major surprises to the organizers and coordinators of the program and the administrators of the organization.

- It can be used in a conference where the participants come from different locations and organizations.

Article Source: http://www.articlesbase.com/strategic-planning-articles/how-to-use-a-swot-analysis-5111325.html

About the Author

Steven Bonacorsi is a Senior Master Black Belt instructor and coach. Steven Bonacorsi has trained hundreds of Master Black Belts, Black Belts, Green Belts, and Project Sponsors and Executive Leaders in Lean Six Sigma DMAIC and Design for Lean Six Sigma process improvement methodologies. International Standard for Lean Six Sigma (ISLSS)

Author for the Process Excellence Network (PEX Network / IQPC)

Process Excellence Network

Steven Bonacorsi, President of International Standard for Lean Six Sigma (ISLSS)

Certified Lean Six Sigma Master Black Belt

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Londonderry, NH 03053

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E-mail: sbonacorsi@islss.com

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