What is a SWOT Analysis?
The SWOT Analysis is one of the simplest business tools bringing astonishing results (usually, having a session is also having much fun). Initially, it was a marketing tool to design a new product, and describe all strengths and weaknesses of the product against competitors present on the market. However, the tool was simple and produced excellent results to elaborate further that the SWOT Analysis acts as the best managerial and project management tool describing any proposal or current status. The best results are produced when the dedicated team is facilitated, and the analysis is conducted in several rounds. Once the exercise is completed the results are used as firm foundations for the next tasks in the project charter.
In its simplicity, it describes internal environment and the external landscape. It is important for the top management when making a final GO/NO GO decision because senior executives see all relevant information on one single piece of paper.
The S.W.O.T. means strengths, weaknesses, opportunities and threats. A tool does not identify more. Strengths and Weaknesses are internal, and opportunities and threats are external. It is important to recognize that the strengths and weaknesses are internal because they reflect the ability of the company to produce a product at the desired level. The four sectors are enough to define the parameters of the new product and how it will compete against other products on the market. Alternatively, it can describe a new internal process and how it will fit a DNA of the organization.
Strengths describe the characteristics and values that give the advantage to the product over others. It works best when it describes the current status of the current product or service that will act as the basis for a new product development.
Weaknesses are the opposite of Strengths. They describe characteristics that lower the value of the product or service on the market. There is no product that excels in everything. The company has to find the right compromise between features and production or operation costs. However, during the SWOT session, most ideas come to this segment. An excellent facilitator keeps the audience positive because the current product also has its customers and clients.
Opportunities should always be a segment that is full of potential features that will be used as a foundation to build a competitive advantage on the market. It is the most creative sector because team members can propose crazy ideas and features of products. No idea can be killed so that it can be elaborated in the next round.
Threats are about the advantages of competitors and their ability to bring a better product. It describes benefits of current products and how clients perceive them.
The SWOT Analysis requires an active facilitator. The role of the facilitator is essential. He or she has to motivate the group to come with all kinds of different ideas and opinions. He has to support the group in elaborating ideas further and proposing new items as the discussions advances.
The facilitator of the SWOT sessions needs to balance positive and negative ideas because team member with strong communication skills can kill interesting ideas of shy people. The imbalance of the SWOT Analysis is one of the key risks.