A SWOT (Strengths, Weaknesses, Opportunities, and Threats) is a tool used to provide a general or detailed snapshot of a company's health. Think of your SWOT as a tune-up that every business needs periodically to diagnose and fix what’s a bit worn, what’s on the verge of breaking down, or what’s already broken and needs replacement--so that you can keep the business humming—even better than it has in the past.
SWOT Analysis SWOT Analysis Overview What is SWOT Analysis? A SWOT (Strengths, Weaknesses, Opportunities, and Threats) is a tool used to provide a general or detailed snapshot of a company's health. Think of your SWOT as a tune-up that every business needs periodically to diagnose and fix what’s a bit worn, what’s on the verge of breaking down, or what’s already broken and needs replacement--so that you can keep the business humming—even better than it has in the past. 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 company's overall strategy or the strategy of its business units. All four aspects must be considered to implement a long-range plan of action. Remember, It’s Virtually Impossible To Focus Too Much On What You Do Well And What Creates Profits For Your Business. © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 2 SWOT Example Strengths: We are able to respond very quickly as we have no red tape, no need for higher management approval, etc. We are able to give really good customer care, as the current small amount of work means we have plenty of time to devote to customers Our lead consultant has strong reputation within the market We can change direction quickly if we find that our marketing is not working We have small overheads, so can offer good value to customers Weaknesses: Our company has no market presence or reputation We have a small staff with a shallow skills base in many areas We are vulnerable to vital staff being sick, leaving, etc. Our cash flow will be unreliable in the early stages Opportunities: Our business sector is expanding, with many future opportunities for success Our local council wants to encourage local businesses with work where possible Our competitors may be slow to adopt new technologies Threats: Will developments in technology change this market beyond our ability to adapt? A small change in focus of a large competitor might wipe out any market position we achieve The consultancy might therefore decide to specialize in rapid response, good value services to local businesses. Marketing would be in selected local publications, to get the greatest possible market presence for a set advertising budget. The consultancy should keep up-to-date with changes in technology where possible. A start-up small consultancy business might carry out the following SWOT analysis © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 3 Why Use SWOT? In any business, it is imperative that the business be its own worst critic. A SWOT analysis forces an objective analysis of a company's 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. Winners typically win not by sticking with their past game plans--but rather by focusing on some new thing(s) that are under their control. During depressed economic times, there are still lots of winners © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 4 SWOT Analysis The Basics 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 characterised by complex issues and continuous change. Frequently the related decisions and actions are characterised 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. SWOT analysis is a dynamic process of decision making with many applications in organizations and other applied fields © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 5 SWOT Analysis 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 company's 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? POSITIVE NEGATIVE INTERNAL Strengths © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Weaknesses Page 6 EXTERNAL Opportunities Threats SWOT Example Delta Air Lines Inc., chose to invest in a multibillion-dollar customer service system that addresses the flight delay problems experienced by 20% of its passengers. Although some companies might think the move was excessive considering 80% of customers have no problems, Delta believed customer service was an important area for increasing market share and that competitors could pose a threat if Delta didn't address the problem. Another example is Dell Computer Corp., which is a great example of how an IT company can use a SWOT analysis to carve out a strong business strategy, according to Glazer. Dell recognized that its strength was selling directly to consumers and keeping its costs lower than those of other hardware vendors. As for weaknesses, the company acknowledged that it lacked solid dealer relationships. Identifying opportunities was an easier task. Dell looked at the marketplace and saw that customers increasingly valued convenience and one-stop shopping and that they knew what they wanted to purchase. Dell also saw the Internet as a powerful marketing tool. On the threats side, Dell realized that competitors like IBM and Compaq Computer Corp. had stronger brand names, which put Dell in a weaker position with dealers. Dell put together a business strategy that included mass customization and just-in-time manufacturing (letting customers design their own computers and custom-building systems). Dell also stuck with its direct sales plan and offered sales on the Internet. Clarity in strategy works. Fuzzy strategies fail. Most strategies fail because they don't have a clear direction © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 7 SWOT Analysis Internal and External Analysis To get a better look at the big picture, consider both internal and external forces when uncovering opportunities and threats. What better source than the group of participants composed of stakeholders, staff, Internal Analysis: volunteers, and/or community residents? 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: 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. A SWOT session is a participatory group process which produces output valuable for annual planning © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 8 SWOT Analysis The Basics (Cont.) 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 & 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. A SWOT session is also useful for deciding upon a major transformation of a program © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 9 SWOT Analysis Additional Notes Do realize that any analysis requires data and information. If you do not have adequate information, the results of your analysis are likely to be less reliable. However, an experienced manager knows that complete information is never available. In the real world, you end up making business decisions with incomplete information. That is where things like common sense, gut feel and experience kick in. Expanded SWOT Analysis You can take an additional step beyond a traditional "text book" SWOT analysis by delving deeper into industry dynamics. A more in-depth SWOT analysis can help you better understand your company's competitive situation. One way to step beyond a traditional SWOT analysis is to include more detailed competitor information in the analysis. Note Internet-related activities such as trade organization participation, search engine inclusion, and outside links to the sites. This will better help you spot opportunities for and threats to your company. You can also take a closer look at the business environment. Often, opportunities arise as a result of a changing business environment. Some examples are: * A new trend develops for which demand outstrips the supply of quality options. Early on, the trend toward healthy eating coupled with an insistence on good-tasting food produced a shortage of acceptable natural food alternatives, for example. * A customer segment is becoming more predominant, but their specific needs are not being fully met by your competitors. The U.S. Hispanic population experienced this phenomenon in the late 1990’s and early 2000’s. * A customer, competitor, or supplier goes out of business or merges with another company. With the demise of many pure-play "dot coms", examples of this abound. As each went out of business, opportunities arise to gain the defunct business’ customers. You can also expand the reach of a SWOT analysis through surveys. You can learn more about your own as well as competitor’s sites and businesses. Areas to consider researching include customer awareness, interest, trial, and usage levels, brand, site, and/or company image, importance of different site or product attributes to your customers, and product and/or site performance. Whether using a basic or more advanced approach to SWOT analysis, you are sure to come away with newfound insights. Use these to increase your company's effectiveness and as input into your business or marketing plan The SWOT framework offers a good starting point for analysis © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 10 SWOT Analysis Operational Definitions A STRENGTH is something that you truly do well, excel at versus the competition, can build on; something that truly differentiates your business, a key metric that is improving, etc. Most companies do surprisingly bad job of identifying what they are really good at doing. Every company has strengths. A strength can be something very concrete like a large, growing customer base or less measurable: a well-run customer service department that keeps customers satisfied (thus helping both retention and new sales). Note that a STRENGTH can also be a weakness: e.g. you’re Number One in your market is a STRENGTH, but if you are taking that for granted—that’s also a weakness. A Weakness is a real gap, a deficiency, a problem, or a key metric that is going south; something you’re not doing very well and that you should be doing better; something that’s dated that no longer applies—even though it used to; something important that you really don’t know or aren’t sure about. In fact, one good outcome of a SWOT is to discover what you really don’t know and then do something about it. A weakness can be very tangible and concrete or it can be an attitude: e.g. a complete unwillingness to invest in any marketing initiatives or a lack of understanding what to do. The best way to identify STRENGTHS, WEAKNESSES, OPPORTUNITIES & THREATS is to ask the right questions © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 11 SWOT Analysis Operational Definitions (Cont.) An OPPORTUNITY is a favorable external condition; something (that you haven’t acted on or taken advantage yet) that could impact you positively. Opportunities are new ways that your exploit your STRENGTHS, WEAKNESSES & THREATS--new things that that you can do to potentially improve your business—that turn into recommendations and actions. This list becomes the most important part of your SWOT for prioritizing and determining what next steps to take. A THREAT is something external to your business that can potentially impact you negatively: competitors (actually doing specific things vs. just being there), changing conditions in your particular marketplace, the overall economy, government regulations, etc. Threats are part of the playing field that you can’t ignore. They are part of the context of your business. Some threats, though, are internal: e.g. hanging onto the status quo when change is required or the impact on remaining if you decide to cut costs (maybe an OPPORTUNITY). You should also make an ongoing list of Issues and questions that inevitably pop-up as a result of developing the STRENGTHS, WEAKNESSES, OPPORTUNITIES & THREATS lists—for further analysis and discussion—and possible incorporation into your SWOT. Generally, STRENGTHS & WEAKNESSES are current in timeframe, and OPPORTUNITIES & THREATS are in the future— starting with tomorrow. The purpose of strategy is to be really clear before you take the direction. The point of a SWOT analysis is to have the best shot at a grounded plan © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 12 SWOT Analysis Strengths Every organization has some strength. In some cases this is obvious, for example, dominant market shares. In other cases, it is a matter of perspective, for instance, a company is very small and hence has the ability to move fast. It is important to note that companies that are in a bad position also have strengths. Whether these strengths are adequate is an issue for analysis. Define areas you excel in, such as the company’s core competency and resource analysis Consider strengths from your own point of view and from the point of view of the people you deal with. Don't be modest - be realistic. If you are having any difficulty with this, try writing down a list of your characteristics. Some of these will hopefully be strengths! Strengths will include the wisdom and experiences learned by the staff. Some of their skills may be valuable for continuing in the same way, but may be a hindrance to making an organizational or program change. SWOT will help you to focus on your strengths, minimize weaknesses, and take the greatest possible advantage of opportunities available © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 13 SWOT Analysis Strengths Questions What makes you stand out from your competitors? What advantages do you have over other businesses? What are the major sources of a company's revenue and profit? What is the market share of the company in its various product lines? Does the company have strong brands? Is the marketing/advertising effective? What is the major focus are of the company? Does the company have a pool of skilled employees? Is the morale of the employees high? Are there rewards in place to create an atmosphere conducive to excellence? What is the cost of capital? What is the stock price track record? Does the company harness information technology effectively? Does the company manage its inventories efficiently? Has the company demonstrated the ability to adapt and change? Is the company able to innovate? How has the company withstood international competition? Think about what your company does well. Some questions to help you get started © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 14 SWOT Analysis Weaknesses Every organization also has some weakness. In some cases, this is obvious; say for example, a stricter regulatory environment. In other cases, it is a matter of perspective, for example, a company has 99% market share and is open to attack from every new player. It is important to note that companies that are extremely competent in what they do, also have weaknesses. How badly these weaknesses will affect the company is a matter of analysis. Consider this from an internal and external basis: Do other people seem to perceive weaknesses that you do not see? Are your competitors doing any better than you? It is best to be realistic now, and face any unpleasant truths as soon as possible. Think of a SWOT as a Cliffs Notes version of deconstructing your business, taking a fresh look, and jumpstarting your company to steer it a new direction to grow your business © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 15 SWOT Analysis Weakness Questions What do your customers complain about? What are the unmet needs of your sales force? What are the least profitable product lines for the company? In what areas is the company not able to recover costs? Which are the weak brands? Is the marketing/advertising effective? Is the company not focused? Is the company able to attract talent? What are the biggest expenditures of the company? Is the company able to raise money when it needs to? Does the stock price history inspire confidence? Will the company be able to stand price pressure from competitors? Has the company been able to bring new ideas and products to the market place? Do employees feel facilitated to perform their best? Do employees have faith in management? Are the corporate governance standards high enough? Is the company losing out to competitors on the technology front? List the areas that are a struggle for your company. Here are some questions to help you get started © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 16 SWOT Analysis Opportunities All organizations have some opportunities that they can gain from. These could range from diversification to sale of operations. Identifying hidden opportunities is the mark of an astute analyst. Opportunities - Traditionally, a SWOT looks only at the external environment for opportunities. I suggest you look externally for areas your competitors are not fully covering, then go a step further and think how to match these to your internal strengths. Try to uncover areas where your strengths are not being fully utilized. Apart from the kinds of responses desired, the SWOT can be used in other contexts than transformation of a program, and is recommended to be used in annual or biannual review meetings. The aim is to provide a non-threatening situation for participants to contribute as freely and without inhibitions as feasible, all the strengths, weaknesses, opportunities and threats that they can recall. If SWOT is based upon verifiable observations of the conditions and attributes that will contribute to success, and is realistic in identifying what may stand in the way of success, then it is more likely to succeed. SWOT analysis highlights the key issues, and the links between issues, which are related to a problem © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 17 SWOT Analysis Opportunity Questions Analyze your customers and market attractiveness Are there emerging trends that fit with your company's strengths? What are the interesting trends? Is your company positioned to take on those trends? Is there a product/service area that others have not yet covered? What favorable circumstances are you facing? Is your company entering new markets? Is your company advanced in technology? Similarly, opportunities for some actions may be threats for others © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 18 SWOT Analysis Threats No organization is immune to threats. These could be internal, such as falling productivity. Or they could be external, such as lower priced international competition Threats - As with opportunities, threats in a traditional SWOT analysis are considered an external force. By looking both inside and outside of your company for things that could damage your business, however, you may be better able to see the big picture. In a variation of the method, the facilitator may divide the whole group into smaller groups of four to six individuals, provide them with blank newsprint and markers, and ask them to come up with small group contributions. In this case, the small groups are best chosen randomly. One drawback to this is that some individuals might be reticent at contributing in front of friends, people with whom they work closely, their supervisors or persons they supervise; the advantage is that the total number of contributions is reduced because there is less duplication, and some persons contribute more in a small group discussion than they would alone in front of a piece of paper. Carrying out this analysis will often be illuminating - both in terms of pointing out what needs to be done, and in putting problems into perspective. It is by understanding the key issues that a solution to a problem can be achieved © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 19 SWOT Analysis Threat Questions Check out what your competitors are doing and assess other potential challenges Are your competitors becoming stronger? Are there emerging trends that amplify one of your weaknesses? Do you see other external threats to your company's success? Internally, do you have financial, development, or other problems? What obstacles do you face? What is your competition doing? Are the required specifications for your products or services changing? Is changing technology threatening your position? What policies are local and federal lawmakers backing? Do they affect your industry? Here are some questions to get you started © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 20 SWOT Analysis Focusing On Your Organization “Concentrating” or “focusing” in a business sense does NOT literally mean concentrating or focusing on a single miniscule product or service; nor clinging to one “winner” forever; nor not revamping an already successful (profitable) product/service to make it even better; nor marketing it the same way it’s always been done. It does mean honing in on a relatively narrow product/ service/market set where the company has best chance of making a profit into the foreseeable future. Focus and avoid becoming a BADD company by doing the following: 1. Learn to say NO when appropriate: No, we don’t do that at this point. We do this. No, we aren’t ever going to do that. Others do that already. These are the tough decisions that enable you to grow your business a step at a time. 2. Dare to assess how much time and effort you devote to what your business is really good at and where you make the most money/have the most short term upside. 3. Significantly narrow your business focus for the next 6 months. Yup, it can be painful to admit you can’t do it all. In parallel, narrow your marketing messages and make them match your products and services (very unusual but very differentiating). SWOT Enables A Focus On Your Business That Will Promote Team Discussion and Actions! © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 21 SWOT Analysis Focusing On Your Organization (Cont.) 4. Then invest 75% or more of your business aggregate time, resources and energies in that key thing that you do best and generates the most profits. 5. Tell the truth and the good stories about your business to your customers and markets. In appealing to all types of markets that you do virtually anything, your messages usually become mush, you lose credibility, you lose attention (despite any level of marketing funding)—you create your own marketing and sales nightmare. All things to all people is not a position. It is a death sentence. 6. Grow organically for the foreseeable future. Sure there are business cases to consider to purchase highly complementary or directly competitive businesses, but those are the exceptions versus the rules. Try it the old fashioned way for a while. 7. Execute, execute, execute. This is the bane of BADD executives—who would rather go after that next windmill, do that next deal, and look busy--versus executing, which is a lot harder work. Have a sense of urgency but don’t hurry your business. It always takes longer than you think it will © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 22 SWOT Analysis Template SWOT Analysis Internal Strengths Weaknesses Writing alone on a piece of paper, without a name, provides some protection of anonymity, & some observations about sensitive issues can be revealed this way External Oppurtunities Threats The SWOT Template is a Simple Worksheet © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 23 SWOT Analysis Tips Traditionally, a SWOT confines strengths and weaknesses to your company's internal workings while opportunities and threats refer only to the external environment. Put someone in charge of spearheading it—ideally a knowledgeable consultant (see below) or objective insider who will take the time and be objective. Take one or two weeks, not one or two months—to complete your SWOT. Make big lists, but right-off-the bat start, prioritizing your lists—digitally, so that that they are easy to change and modify (and you may want to take the step of weighting the importance of each STRENGTH, WEAKNESS, OPPORTUNITY & THREAT); keep prioritizing and then weed the lowest priority items at the end. Aim for about five pages: a page for each STRENGTH, WEAKNESS, OPPORTUNITY & THREAT as well as a page for Issues/Questions. Focus on the present and recent past for your STRENGTHS & WEAKNESSES — and not very far into the future for your OPPORTUNITIES & THREATS: 90 to 180 days, maximum. Review your key Marketing & Sales materials like you’ve never seen them before. Get input from at least 3-5 key people who have varying views & opinions © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 24 SWOT Analysis Tricks Minimize the “group grope” and meeting stuff while developing your SWOT — meet to discuss the SWOT, modify it as necessary, and develop one or more action steps. Ask the hard questions and challenge all of your basic assumptions — none are sacred. Be objectively critical but also don’t undersell yourself. Get the key facts but don’t get paralyzed with analysis and fact-finding. You may need to do some other fact-finding and analysis before implementing your recommendations, but don’t get bogged down at the micro-level of detail. Keep “personal” issues off the list — and handle those separately. This is important, especially if there are to be major changes in the organization and the content of the program; all members should feel comfortable that this is a group process, not dominated by factions or individuals. “Its what you learn after you know it all that counts!” - John Wooden © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 25 SWOT Analysis Brainstorming Brainstorming is a term used to describe a creative thinking session. The aim is to gather as many ideas and possible solutions to a problem as possible. The results will depend entirely on the reason for the brainstorming session and the group of people participating. Exploring Ideas: Start with the first idea and ask "If we do this, what results/problems can we expect?" Write each problem or result on the whiteboard. If further information is required, then note it and assign it to a person for further investigation, determine a deadline. Next ask "To implement this, what do we need to do?" write all tasks on the board. It helps to split the board into three sections: Problems, Results, Tasks. Once you have completed the process for each idea, then write an action plan and a follow up session. The aim is to get ideas and viewpoints from various angles and to explore each one further © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 26 SWOT Analysis Brainstorming Preparation Determine the group of people that should attend, if possible include at least one person from each department and all the possible stakeholders and decision makers. The group should not be limited to upper management, sometimes the best ideas come from the workers. A Leader should be appointed to manage the process and maintain control of the session. Appoint a person to make notes and gather the information. Determine the session duration and issue invitations. The room should be set out so that it has a relaxed atmosphere, preferably the seating should be in a circular fashion or gathered around a table, depending on the size of the group. Encourage people to walk around and feel relaxed. Provide a whiteboard, note paper, pens, coffee and anything else that may encourage a relaxed session. The observations in each category can be ranked in order of importance © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 27 SWOT Analysis Brainstorming Session Discuss the reason for the session and clearly define the objective or problem. Ensure that all participants agree to the objective and understand the required outcome. Write the objective as a heading on the whiteboard, this will assist to keep everyone "on track" during the session. Set the rules of the session: There should be no criticism or ridiculing of any ideas, keep on track, avoid lengthy discussions on the pros and cons of an idea, this will be done later during the investigation phase. Encourage everyone to participate and respect each other’s ideas. The Session Leader should ensure that the rules are followed and no idea is ridiculed, criticized or labeled as silly. Commence by asking individuals to provide their thoughts/ideas and write each one on the whiteboard. You will probably find that once a few ideas have been noted, the rest will flow. Once all ideas have been noted, then it is time to explore each one further. Group any ideas that are similar to others. Ideally you aim to have 5-10 ideas to investigate further © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 28 SWOT Analysis Brainstorming Action Plan The action plan should include a summary of each idea, a list of further investigation requirements, who they are assigned to and deadlines. If an idea can be implemented immediately, then it should include the tasks, who they are assigned to and deadlines. Brainstorming sessions are excellent tools to solve problems and determine further opportunities. A brainstorming session can be done on an individual basis successfully, however a group session will allow for different viewpoints from all areas. A Successful Brainstorming Session Will End With A Solid Action Plan To Be Followed © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 29 SWOT Analysis BADD & SWOT BADD (Business Attention Deficit Syndrome) : The failure of many businesses to thrive as they should—or even survive at all--is attributable to a lack of focus on what the company is really good at doing. One way to combat the proclivity toward “BADD” is to perform a SWOT analysis of your overall business (and focus in particular on marketing and sales). SWOT is not panaceas that magically points to the best choices, but they are invaluable tools to: Focus and prioritize business activities and resources from Marketing and Sales--to Operations, Finance, Customer Service, etc Listen to a range of different “voices” instead of only one or two top executives Push aside company politics (if only temporarily) and present ideas that may not be brand new but may have been perceived inappropriate for discussion Uncover a gem or discover a gap or two--that might be very small or very large—that immediately contributes to the business Challenge the status quo, and in particular, the level of sales and profits—and shake things up to get moving again SWOT Examines Where You Really Stand Today and What Some of the Alternatives Are to Grow and Become More Profitable! © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 30 SWOT Analysis Why It’s Difficult to SWOT Yourself Can you SWOT your business yourself? Sure, if you’re really willing to check your ego(s) at the door, truly step back, and take an objective no-holds-barred look at your business: the good and the bad. It’s very difficult to do internally, but certainly possible. I’d guess, though, that fewer than one in four businesses can do it alone. Why is a SWOT so tough to do yourself? As part of the company, you’re simply too close to the action. Yes, you know your business better than any “outsider” ever will, but you’ve been looking at it the same way for so long that you’re not really seeing what you need to see. And you probably take for granted some assumptions that may not be relevant (any longer). You may not have enough reference points to be able to evaluate your business and compare it to others. Someone needs to drive the process. Unfortunately, unless you invest in an outside professional, too often the SWOT just doesn’t happen—or is not well done. SWOT can bruise egos. A good SWOT almost always helps identify some overlooked strengths, but also rocks the boat. A consultant can push the process and avoid getting bogged down in personality and political issues. Whether you attempt it yourself or get some help, a SWOT is a quick-and-dirty, super-objective look your successes, your failures, the market, and your competitors Page 31 © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. SWOT Analysis BADD & Focus BADD: the evil twin of Business Focus Lack of focus, or what I call Business Attention Deficit Disorder (BADD), is the Achilles heel of most businesses—large and small--that end up NOT making it. From little start-up technology companies (perhaps with genuinely “cool” and useful stuff) to multi-billion dollar corporations like Vivendi (the one-time water and waste management company that sought foolishly to transmute into an entertainment conglomerate), lack of focus is the crux of their problems and often their death knell. All the water in France won’t save Vivendi from burning down and disintegrating into pieces at this point. And the technology world is littered with tens of thousands of neat “tools, “applications,” and “solutions” that no one ever sat down and figured out 1) a specific, concrete need for “it” 2) how to market and sell the thing at a profit. Focus—A definition Webster’s defines “focus” as: “…to fix or settle on one thing; concentrate…or to direct one’s thoughts or efforts; concentrate.” The common theme of focusing or concentrating is limiting one’s attention, resources and effort toward one thing. Not fifty-four things. ONE Thing © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 32 SWOT Analysis BADD & Focus (Cont.) BADD remains rampant Lack of business focus is still rampant even after thousands of dot.com companies melted down and escalating numbers of technology and other companies have shown that their “success” (that is, temporary survival) was a complete sham. BADD is: Trying to do too much, too fast. Trying to diversify beyond current expertise, competence, and skills. Trying to expand, way beyond current strengths--without the resources. Trying to jam a couple companies together without any tangible strategic or financial plan. Trying to get bigger (usually increasing customers and revenues without a lot of concern about debt or added costs)—hence little concern for profits. Saying to the marketplace that we do tons more than the business really does (or should be doing)—just to get a next customer. Does Anyone Believe Our Customers Would Not Recognize A Lack Of Focus? © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 33 SWOT Analysis BADD, Focus & Leadership But we can’t limit ourselves! We can do it all! Some business executives say, “If we say we only do this, then we’re limiting our potential.” Or they say, “We have no choice but to innovate at the speed of light.” These are the laments of true business fools. Not focusing—although very seductive and soothing to some corporate egos—is the perfect recipe for failure. Here’s what else the fools who don’t make it (other than unethically, for a time) say: “Sure we can do that (anything you want).” “Ya gotta think big and shoot for the moon—or you’ll never get anywhere.” “We aren’t going to put all our eggs in one basket.” “The “solution” we’re offering is infinite customization—just tell us what you want.” “Growth is all we need now, not profits. We’ll figure that out later.” The synergies are obvious; we’ll figure out how to make it work (financially, operationally, culturally, etc) later.” Lets Learns From The Mistakes Of Other Business Leaders! © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 34 SWOT Analysis “BADD” Starts at The Top BADD always starts with the top folks and then becomes contagious across the company. But a high percentage of these executives can’t really even tell you about the crux of their business, what they do (well), AND how they make money (profit, that is). Whereas they typically adore flirting from deal to deal, these deals often produce nothing of intrinsic value—or even worse, deflect the business from focusing on what it does best. BADD executives are always busy but lack focus, and hence, so do their respective businesses. Many bankers, VC’s, and other investment types have fostered (virtually required) unfocused BADD business practices over the past several years. They’ve demanded business plans that show outrageously huge, potential market caps and phenomenal growth curves--and could have cared less about ongoing, lasting profitable business successes. But their game of guaranteed fees and quick exits (for their firms and a few top executives) is grinding to a halt. It’s no longer possible to condone such BADD foolishness, though, especially in this day and age of a depressed stock market, breakdown in corporate ethics, and the general poor financial performance of technology companies, in particular. I wish that I could discover the pill (maybe another use for Prozac?) that immediately improved executive-level attention deficit disorder. It would be more lucrative than hundreds of thousands of stock options in the old days of Enron or Global Crossings. © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 35 SWOT Analysis Why BADD Companies Fail? BADD companies are in (or say they are in) too many products and services, or too many unrelated types of products or services, or too many vertical markets or too many geographic markets. BADD executives really delude themselves (and fool others) that they can make anything happen in their own “space.” What does happen, though, is one or more of the following: No customer growth because nothing tangible ever gets out the door and/or no one out there believes the pitch. Customer and revenue growth, but without profits. Customer growth without ability to deliver (and hence the creation of unhappy customers) Markets that don’t understand what the company does or the value that it provides and/or just don’t believe it. Mass internal confusion, turmoil, and turnover (and then layoffs). Some BADD companies can hang on for quite some time, but the downward spiral is inevitable © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 36 SWOT Analysis Outside Expertise? If you decide to use an outside expert to help SWOT: Use a pro who knows not only Marketing and Sales, but is also business-savvy. Give them access to the information and people they need and tell it to him/her straight. You can fool even some of the best if you really want to, like a patient who doesn’t divulge symptoms to a physician, and then shouldn’t expect to get a very good diagnosis. Don’t expect all of THE answers: expect objectivity and unbiased analytical thinking, and someone who will put the time and effort into doing the SWOT right. Leaders Use Lean Six Sigma To Counter BADD Leadership! © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 37 PMI (Plus, Minus, and Interesting) Analysis Template PMI Analysis Question: ? Plus Plus Score 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Minus Minus Score 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Interesting Interesting Score 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Plus Totals Total 0 Minus Totals Interesting Totals Summary PMI Analysis Is A Simple Team Worksheet For Pre and Post Meeting Assessments © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 38 SWOT Analysis Markets—Prospects and Customers How well known is your company in the marketplace? Who knows about you and who doesn’t? How is your company perceived in the marketplace? What else would you like your markets to know about your business? How do you differentiate your market(s)—e.g. by size of business customer, type of industry, geography, etc? Where is your ‘”sweet spot” market(s) and why? What (else) do those key markets need to solve their business problems? What are your 2002 sales trends per market (per product and service)? Where do you make most of your money? Who are you trying to sell to now? What specific audiences do you pitch to and why? A SWOT Analysis Is A Basic Part of Any Marketing Plan! © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 39 SWOT Analysis Markets - Prospects and Customers (Cont.) Who writes the checks? What % of your 2002 revenues came from existing customers? Which of your customers are most profitable? What is your customer retention performance the past 3 years? Which customers are you most likely to retain? Who are your best customer(s) and why? Who are your problem customers and why? Have you ever “fired” a customer? If so, why—or why not? What do customers say about your products/services? How well does your company continually interact with clients? How do you track those interactions? A SWOT Analysis Helps Us Learn Our Customers Wants & Needs © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 40 SWOT Analysis Products & Services (Packaging & Pricing) What are your products and services (that you have actually have available to sell)? What are you selling at what prices? What is the rationale(s) for your current packaging/pricing? Could you price your products/services differently (and be more successful)? What business problems do your product/services address? How do your products/services address those specific problems? What makes your products/services different, better than the competition? What are the 2008 growth trends per product/service (e.g. new customers, revenue or profit per customer, etc)? “All Business Is Show Business” © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 41 SWOT Analysis Products & Services (Packaging & Pricing) Cont. What are your “best” products/services and why? What are your most profitable products/services? Do you deliver what you sell (at a minimum)? What products and services have the most potential for 2003 and why? What does the marketplace need in your “space?” What else, if anything, should your company be offering? Where do your ideas come from to enhance current product/services and develop new ones? How much do you invest in developing new products and services? Our Product or Service Image Impacts Our Market Position © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 42 SWOT Analysis Sales & Competition What resources are devoted to selling your products and services? Do you have the sales staff to adequately cover your market(s) Who sells most successfully and why? Are your sales people selling the same (agreed upon) products and services? What is the origin(s) of your 2002 new sales (e.g. referrals, direct sales contacts, cold calling /telemarketing, other marketing vehicles, etc) Why do you win specific types of sales--and lose others? What do they like and not like? What questions do prospects ask? How much does your sales pitch vary, salesperson to salesperson? How well is it managed? What does your current Sales funnel look like? What is your Sales tracking process? How does Sales follow-up with prospects? How involved are Sales with customers on an ongoing basis? “Control Your Own Destiny or Somebody Else Will” – Jack Welch © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 43 SWOT Analysis Sales & Competition (Cont.) How successfully do you re-sell (additional products/services) to your customer base)? How do you leverage your Sales through “strategic partnerships”? How productive have those been? Do your sales incentives match your business strategy and growth objectives? How do your results (e.g. per market, product/service) compare with your sales incentives? Are your Sales and Marketing people on the same page? If not, why not? Who are your top competitors? Other second-tier competitors? Who do you go up against most often in sales situations? How well do you know their product/services and marketing/sales approaches? How do your products/services and prices stack up to others? Who beats you most often and why? What do you like that could be incorporated into your business? What do competitors do to “reposition” your company? What do you do to reposition your competitors? What information do you regularly track on your competitors? Partnerships Can Change The Competitive Game © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 44 SWOT Analysis Marketing What marketing vehicles do you currently use? Basic collaterals (letterhead, business cards, portfolio, etc) Web site Search engine optimization Brochures and print materials/mailers etc Print advertising Email campaigns Proposals PP Sales presentations Demos Tradeshow booth Other promotional events/items Telemarketing (scripts) Other media: TV, radio, billboard, etc Seminars Press releases/press campaigns Marketing plan Media plan Other________ Marketing Areas To Consider © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 45 SWOT Analysis Marketing Questions What marketing vehicles have worked the best in 2002 and why? Which ones have not worked and why? How coordinated are your marketing initiatives? Are you getting people’s attention with your marketing messages? Who, specifically, are you attempting to reach? What level of frequency are you using to get your messages out? Do you apply marketing resources on a regular ongoing basis? What % of your revenues did you devote to marketing in 2002? Has that been enough, too much? Why? What limitations, if any, have you put on your marketing investment in 2002? What other marketing initiatives have you considered trying? Do you monitor your marketing results? How? Do you have a marketing plan? How often do you adjust your plan? How is your marketing department/function organized? How focused is your company on marketing in comparison to Sales? How effectively do your Sales people put Marketing leads to work? You can also apply SWOT analysis to your competitors © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 46 SWOT Analysis Positioning When you sit next to a stranger on an airplane and he or she asks what you do/your company does what do you say? Do they get it? What else do they ask? What do they NOT understand? Line up your most current marketing and sales materials/vehicles and carefully review and critique the following (as applicable): Basic collaterals (letterhead, business cards, portfolio, etc) Web site Search engine optimization Brochures and print materials/ mailers etc Print advertising Email campaigns Proposals PP Sales presentations Demos Tradeshow booth Other promotional events/items Telemarketing (scripts) Other media: TV, radio, billboard, etc Seminar programs Press Releases and other PR campaigns Marketing plan Media plan Other communication vehicles © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 47 SWOT Analysis Positioning (Cont.) Then ask the following questions: Are the messages and information (and graphical appearance) across ALL of those materials/vehicles: current, accurate (true), consistent, clear, free of jargon, illustrative (vs. just descriptive) and unique? How well do your messages, themselves, differentiate your products/services and overall business? Can virtually anyone understand your top-line messages and what value/benefits that your products/services provide (that is what business problems they solve)? Who coordinates/how do you continually coordinates ALL messages regarding your business and your products and services? How often do you change your messages as necessary? How well do your messages match your actual products/services? SWOT identifies the internal and external factors that affect an organization! © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 48 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. The AIT Group, Inc. Steven Bonacorsi, Solution Provider Lean Six Sigma Master Black Belt 3135 South Price Road, Suite 115 Chandler, AZ 85248-3549 Phone: +(1) 888.826.2484 E-mail: firstname.lastname@example.org http://www.theaitgroup.com http://blog.theaitgroup.com/?tag=change Our Expert Consultants Can Help Your Business Growth © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 49 About The AIT Group © Copyright 2006 - Advanced Integrated Technologies Group, Inc., All rights reserved. Page 50
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