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How To Do A SWOT Analysis [with examples]
Do you know the areas in which your organization can improve and where it’s doing well, both internally and externally? Use this SWOT analysis example to get a definitive answer on both fronts.
A SWOT analysis is a high-level strategic planning model that helps organizations identify where they’re doing well and where they can improve, both from an internal and external perspective. It is an acronym for “Strengths, Weaknesses, Opportunities, and Threats.”
You typically want to conduct a SWOT analysis at the beginning of your strategic planning process or during a strategy refresh. Your entire leadership team should be heavily involved, because they should have the ability to look across your organization and offer insight into your competitive environment and/or business landscape. When the leadership team offers appropriate recommendations regarding your strengths, weaknesses, opportunities, and threats, you will end up with a SWOT analysis that has the credibility to be used constructively in the strategic planning process.
How To Do A SWOT Analysis
To help you get started, we’ve created this step-by step SWOT analysis template. (The examples below are specific to a financial organization, but only for examples sake; the SWOT analysis exercise is applicable to all businesses!) You’ll notice we divided our hypothetical examples for strengths, weaknesses, opportunities, and threats based on the four Balanced Scorecard perspectives. You don’t have to use the Balanced Scorecard to be successful with your SWOT analysis, but this method does provide a strong framework for your discussion.
Completing your SWOT analysis is only the first step. Below, we've provided you with 5 tips for how to incorporate your SWOT analysis into your wider strategic planning process, ensuring it helps inform the decisions that you make.
Step 1: Strengths
Start by asking the question, “What are we good at?” This is a broad question, but in the beginning stages of your discussion, you should accept all answers.
- Financial Strengths: What is your most reliable source of financial growth? Is it your current customers? A particular product? Your service fee structure?
- Customer Strengths: Where is your customer growth coming from? Is this coming from referrals, or a particular industry segment like healthcare or retail? Is it mainly retail or commercial? Why are your customers choosing you over your competitors?
- Internal Strengths: What do you do very well as an organization? Are you the first to innovate products in your industry? Do you have strong customer relationships or partnerships?
- Learning & Growth Strengths: Where do you excel insofar as your employees are concerned? Is it your compensation model? Could it be your workforce development program? Your culture?
Step 2: Weaknesses
Next you should ask yourself, “What are we not good at?” or “Where do we have opportunities to improve?”
- Financial Weaknesses: What is your biggest financial weakness? Perhaps most of your customers are in a cyclical industry and subject to market whims, for example. Or maybe your most used product has the lowest profit margins.
- Customer Weaknesses: Where do your customers think you need to improve? This could be your investment products, locations, loan origination, or competitive prices for interest rates.
- Internal Weaknesses: What do you do poorly? Do you have opportunities to improve in project management for opening new branches? What about for one-touch call resolution for customer service?
- Learning & Growth Weaknesses: What are your biggest challenges with employees? Do you have particularly high turnover in certain departments or a negative perception of the organizational culture?
Using a Red Measures Dashboard gives you the ability to identify and tackle issues so you can reach your goals
Step 3: Opportunities
Following your discussion on threats, ask those in leadership to look toward the future and consider, “Where do we see big possibilities for our organization?”
- Financial Opportunities: What is your biggest opportunity to improve your finances? This might be starting a new product line, increasing customer retention, or going after a new geographical area.
- Customer Opportunities: Where could you dramatically improve with your customers? Could you improve your online interface? What about cross-selling related products, or better understanding your customers’ purchasing habits?
- Internal Opportunities: What processes will drive you well into the future if you could improve upon them? This may entail partnering with a mortgage origination company or developing neighborhood sponsorships.
- Learning & Growth Opportunities: What opportunities do you have to leverage staff? For example, do you have cross-training opportunities? Could you make a few tweaks to improve your culture and thus your retention?
Step 4: Threats
After identifying opportunities, zero in on your biggest threats by asking, “What do we see on the horizon as being potentially harmful to our organization?”
- Financial Threats: What threats could seriously impact your financial health? This could be low-cost competitors, a partner entering the banking space, or an overseas banking product.
- Customer Threats: What is your biggest concern about your customers? Does one of your competitors offer zero-fee checking that could steal some of your market share? How simple is your customers’ ease of departure?
- Internal Threats: What current areas of your business might harm you later? Do you have a new product rollout soon that could potentially fail? Are you struggling through a merger or an office upgrade?
- Learning & Growth Threats: What threatens the people within your organization? This could be anything from instability in your customer support department to staff member departures to a department-specific pushback against new technology.
After you have completed your SWOT analysis brainstorming session, take the following steps:
1. Consolidate your analysis results into a four-box SWOT matrix.
As we mentioned in the introduction (and in our SWOT analysis example), your SWOT helps you identify strengths and weaknesses that are either helpful or harmful to your organization. As you can see from the SWOT matrix example above, strengths and weaknesses are internal to the organization, while opportunities and threats are of external origin. Strengths and opportunities are helpful to your organization’s strategy, and weaknesses and threats are harmful to your organization’s strategy.
Once you’ve completed the SWOT brainstorming process with your leadership, consolidate your results so you can see all the positive opportunities—and any negative trends—that could affect your strategy, and how you operate on the whole.
2. Start developing your strategy map.
As you may recall from our previous article, a strategy map is a visual, one-page depiction of your strategy. Before you can begin developing your strategy map, you need to be certain you fully understand strategy mapping. (Take a look at this strategy execution toolkit for more information.)
If you have asked the 16 questions posed in the SWOT analysis example above (specific to each of the Balanced Scorecard perspectives), then it should be relatively straightforward to filter by each perspective and come up with key objectives for that area. For example, does it seem as though you urgently need to make strategic adjustments to one particular area of your strategy? Do you need to address a failing new product launch before addressing market expansion opportunities? This will be the foundation of your strategy map.
As you’re building your map, keep in mind there should be a natural alignment with your SWOT analysis. After all, you just took the time to analyze your organization and the opportunities and threats to the future of your business. Don’t put all that work on a shelf to gather dust! Make sure there is a clear and strong link between your SWOT analysis and strategy map. For example, if you’re a for-profit organization, your financial perspective will be the top priority—build your analysis into your map in a manner that drives those finances in the right direction. Maybe your SWOT analysis foretold an opportunity to hit a new line of business or forecast that a line of business would dry up. Your strategy map needs to reflect that. When you get to processes stage of strategy mapping, you can set activities based on your strengths and improvement needs. Your SWOT analysis will also affect target setting across all areas.
In short, your SWOT analysis isn’t a standalone effort and should be closely linked to your strategy map—it should provide key information on how your strengths and weaknesses impact your strategy.
3. Communicate to the organization where, how, and why you will be changing your strategy.
At this point, we recommend running a “brown paper exercise” with your SWOT analysis that involves everyone in your organization. Print your SWOT matrix in large size, and ask employees to add post-it notes in any or all of the four boxes of the SWOT matrix if they feel there is something the leadership team missed. (You can also ask employees to add their names next to their suggestions so leadership can follow up with them.) Not only is this exercise great for inter-office discussion, but it also gives leaders the chance to consider opinions from staff “in the field.”
4. As you start implementing a strategy, build programs to help overcome weaknesses or go after opportunities.
Keep in mind that your SWOT analysis isn’t an end product—it’s the first step to helping you align your strategy around the areas you’ve identified as strengths, weaknesses, opportunities, and threats. Specifically, you’ll want to put some measures in place to track progress on correcting your weaknesses and seizing your opportunities.
- Weaknesses: For example, if one of your weaknesses is too few branch locations, you could start an initiative to either implement more ATMs or open up branch locations inside grocery stores.
- Opportunities: If you’ve identified an opportunity for a new product line, you may decide to work with one of your closest customers to fully define and understand their needs in order to strengthen the product—or you may decide to sell an early version of the product to customers in a particular test market before you invest heavily in an unproven area.
So, don’t expect your strategy to change unless you do something to make it change. You can worry about threats or get excited about the opportunities, but if your organization doesn’t shift its behavior, the opportunities will pass you by and the threats may sink your business.
Changing that organizational behavior is all about implementing initiatives or projects. Projects have start dates and end dates, budget and resources, and clear steps to make strategic “redirections” in your organization. Align your projects with measurable results for weaknesses and opportunities, so that you can effectively drive your strategy along the right path. For example, a local government that has uncovered community policing as a weakness in its SWOT analysis will need to develop and roll out a police force training program. The program should include measurable targets to prove that policing levels—and therefore community safety—increased.
5. Keep your strategy alive.
You just spent a significant amount of time and attention on crafting your strategy. Doing a SWOT analysis is tough, and thinking about your organization’s vulnerabilities can understandably make many leaders uncomfortable. But don’t shy away from the fault lines you uncovered; instead, take advantage of the work you did and the alignment you created. Review your strategy (and even your SWOT analysis) on a regular basis. How regularly? That varies by industry and organization, but typically you need to do it as frequently as your industry changes—a company operating in the tech industry will need to do more frequent reviews than one in the utilities industry. You should also launch a review anytime a significant economic, political, or environmental shift occurs that could impact your organization. Ultimately, you need to make sure you’re comfortable managing the risks and opportunities you see, regardless of timing.
Too many strategies sit on a shelf, waiting to be recycled when the next one is created. Put a methodical strategy review process in place, which can easily be organized and managed with the support of ClearPoint (that’s what our software was designed to do!).
Be prepared to take action on your SWOT analysis once you complete it!
Once you’re done, use your SWOT analysis as input for developing or further refining your strategic plan. Otherwise, this exercise could feel like a waste of time to your leadership. If you need some help with this process, download our free strategic planning template. It provides you with eight of the most popular templates for you to build your strategic plan on. Download it today!