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A SWOT analysis is a strategic balance sheet of an organization; that is the strengths of the organization, the weaknesses of the organization, the opportunities facing the organization, and the threats facing the organization. It is one of the cornerstone analytical tools to help an organization develop a preferred future. It is one of the time tested tools that has the capacity to enable an organization to understand itself. To respond effectively to changes in the environment, we must understand our external and internal contexts so we can develop a vision and a strategy that link the two. We need to weave together our understanding of our organization and our actions to develop a future. The purpose of the SWOT analysis is to provide information on our strengths and weaknesses in relation to the opportunities and threats we face.
The analysis and subsequent lists (the outcome of a SWOT analysis is a point form list) is not valuable unless a rigorous discussion takes place with background insight, and unless the list reflects the final views of the organization. A major purpose of any strategic discussion is to arrive at a deeper level of insight. Any response to threats and opportunities must be based on an intimate knowledge and understanding of the organization's strengths and weaknesses. One outcome that should follow a SWOT analysis is an identification of distinctive competencies (for further insight on the latter see: Prahalad/Hamel. "The Core Competencies of the Corporation." HBR. 1990). The benefits of a SWOT analysis are that it provides learning and knowledge vital to the organization's survival and prosperity. Nutt and Backoff talk about SWOT as a clarifier of the "tension fields" in organizations. It is a juxtaposition of the ying and the yang of organizations. Another outcome of the SWOT analysis which is becoming extremely important is an understanding of our boundaries and the development of boundary-spanning skills and insight to help navigate the changing environment we face.
Some Techniques for SWOT:
Highs and Lows:
Eventually the discussion has to move on to how to behave in the future and how to benefit from the insight generated.
Guidelines for SWOT Analysis:
A Summary of the Characteristics of Strengths, Weaknesses, Opportunities, and Threats: (modified from Thompson/Strickland. "Crafting and Implementing Strategy." Irwin Mcgraw-Hill. 1998.)
Strategy from SWOT analysis
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