SWOT Analysis

Rafat Abushaban

- Personal Development #  O 1K views   اقرأ بالعربية

Summary:SWOT analysis helps identify the competitive position of a business or organization by understanding the strengths, weaknesses, opportunities, and threats

SWOT analysis is a popular and simple mechanism utilized to understand the competitive position of a given business or organization. It is often used as a tool to aid in strategic planning along other tools such as market analysis and environmental analysis. The tool can also be utilized in personal development scenarios.
SWOT helps decision maker by providing an overlook of the strengths and weaknesses of an organization in a given target market or an industry.

Components of SWOT analysis


SWOT is formed of four main components to be analyzed:

  • Strengths

    Strengths are attributes that provide a positive impact for the business.
    The following questions can help identify strength points:

    • What are already doing right- your competitive advantage?
    • What assets and resources are helping you currently do what you do?
    • Any abundant financial or technical resources available?
    • What skills does your team bring to the game?

  • Weaknesses

    Weaknesses are attributes that provide a negative impact for the business.
    The following questions can help identify weakness points:

    • What is the edge that competitors have over you- the things that you need to become more competitive?
    • What assets or resources are you missing?
    • What skills does your team need development in?
    • Do you have silos or redundant procedures?
    • Gaps in strategy or business model?

  • Opportunities

    Opportunities are attributes that provide a potential area for improvement for the business.
    The following questions can help identify opportunities:

    • Human, Technical, or financial resources that exist but are not utilized?
    • Activities that can help improve the business?
    • Is the market growing and demanding more similar products and services similar to what you offer?
    • Established brand and community around your brand?
    • Any potential partnership opportunities to help improve the business?

  • Threats

    Threats are attributes that pose a potential threat or danger area for the business.
    The following questions can help identify threats:

    • Any financial threats that may take place in the near future?
    • Any emerging competitors who are entering the market?
    • Any missed partnerships that may have evolved into competitors?
    • Is the market shrinking?

Scope of SWOT analysis


SWOT analysis can be done for both the internal and external environments of the business. Internal factors focus on the internal business processes (what's going well, what's not going well, existing product placements).
For the external factors, we can consider shifting market powers and changes in legislation as well as other elements that impact all those working in an industry.

Furthermore, SWOT can differ by what you can control. Usually, the Strengths and Weaknesses are elements that lay within your control, while Opportunities and Threats are outside of control.
What this means is that elements under your control can be directly changed or improved as necessary, but elements not under your control need mitigation strategies to adapt.

How to do SWOT analysis?


SWOT analysis steps

Aiming to do SWOT analysis correctly, a series of steps should be taken to ensure maximum benefit. These include:

  1. Identifying and engaging stakeholders
    In order to develop SWOT analysis correctly, a group of individuals representing management, beneficiaries/customers, and other stakeholders should be formed to get their perspectives and views. This ensures that collected data reflect different points of view and contains a more holistic result.
  2. Brainstorming
    Getting the group you want to work with is necessary in order to initiate a brain storming session where each is given the opportunity to say what they thing each of the strengths, weaknesses, opportunities, and threats are. Quality of the input is not very important at this stage as we need as much opinions and suggestions as possible, so we seek quantity.
  3. Drilling down
    Once we have noted many thoughts and opinions on what SWOT entails for the business, it is time to identify quality ones to follow through. This stage is focused on quality rather than quantity so that we may select the ones that are most relevant to the business and the context.
  4. Drafting the SWOT analysis and getting feedback
    At this stage we should have a draft of SWOT elements noted down as shown in the example below. Here, we want to get feedback from the group on what to add/remove to make sure that we have reached a final draft.
  5. Extracting goals from the SWOT analysis
    SWOT analysis is only meaningful if it can provide us with actionable goals to work on, so we need to extract those goals from the SWOT table. To do that, follow this simple approach:
    • Maintaining every strength is considered a goal
    • Dealing with every weakness is considered a goal
    • Utilizing every opportunity is considered a goal
    • Avoiding/ minimizing every threat is considered a goal
  6. Prioritize and merge
    We should by now have a long list of goals at hand, so we need to prioritize them according to their urgency, impact on the business, and ease of achievability. Also, similar goals should be joined together here.
  7. Turn to SMART goals
    We should now finalize the process by transforming our goals into SMART Goals. We have a great guide on how to do that here.

Example on SWOT analysis


Let's take a quick example on SamaShop, a high-street generic grocery store. The store's management has collected stakeholders for data collection and brain storming (steps 1-4) and this is the result:

Strengths Weaknesses
  • Offering a good variety of products and produce.
  • Cheap prices.
  • Friendly staff offering good service.
  • Small shop space, allowing little room for products to be displayed.
  • Limited space for parking, which annoys and drives customers away.
Opportunities Threats
  • A plot of land is available for rent across the street, which can be utilized as a parking for the shop.
  • Community close by is growing and is demanding more products and varieties.
  • An upcoming governmental legislation is limiting the usage of plastic bags for groceries.
  • A new competitor grocery store is set to open by the end of year within a nearby walking distance of Samashop.

Next, we extract goals from the SWOT table. To do that, we collect all the points under each of the SWOT elements, and transform them into goals as follows:

SWOT points Extracted Goal
Offering a good variety of products and produce. Improve offerings and variety of products and produce.
Cheap prices. Keep prices low.
Friendly staff offering good service. Highlight friendly staff and good service.
Small shop space, allowing little room for products to be displayed. Expanding shop space.
Limited space for parking, which annoys and drives customers away. Offering a parking.
A plot of land is available for rent across the street, which can be utilized as a parking for the shop. Renting available plot of land to utilize as parking.
Community close by is growing and is demanding more products and varieties. Marketing to community close by.
An upcoming governmental legislation is limiting the usage of plastic bags for groceries. Replacing stacks of plastic bags with Eco-friendly paper bags and reusable bags.
A new competitor grocery store is set to open by the end of year within a nearby walking distance of Samashop. Empower competitive advantage against potential competition.

Next we merge and prioritize goals. For instance, facing potential competition is more important than exchanging plastic bags. The ordered list for SamaShop could look like this:

  1. Empower competitive advantage against potential competition.
  2. Improve offerings and variety of products and produce, and keep prices low.
  3. Offering a parking and Expanding shop space.
  4. Marketing to community close by and Highlight friendly staff and good service.
  5. Replacing stacks of plastic bags with Eco-friendly paper bags and reusable bags.

Finally, we take each of our goals and study it deeply. These goals are not SMART so we need to transform them to SMART goals. Learn more on developing SMART goals with examples here.

Rafat Abushaban


Founder of Riable, Manager of Maan’s Hub for Innovation and Entrepreneurship, Director at Startup Grind, and Advisory Board Member at the global SXSW Startup Competition. He holds a Master’s degree and is an IEEE member.
Facebook Profile Linkedin Profile Follow on Twitter