SWOT is an acronym that stands for Strengths, Weaknesses, Opportunities, and Threats. It is a strategic planning tool that helps you identify internal strengths and weaknesses and assess external opportunities and threats. SWOT analysis can optimize performance, maximize potential, manage competition, and minimize risk.

Defining the objective

Before conducting a SWOT analysis, establish a clear and specific objective. This could be for a specific project, a new product, or an assessment of a department or organization. Identifying stakeholders’ expectations can help avoid capturing unnecessary information.

Gathering relevant information

Collect and analyze data from various sources, both internal and external, such as financial reports, market research, customer feedback, industry trends, competitors, and regulations. Qualitative methods like interviews and surveys can also provide valuable data.

Organizing into the SWOT matrix

Once enough data is gathered, create a 4-quadrant table for each component:

  • Strengths: Positive attributes that give a competitive advantage.
  • Weaknesses: Negative aspects and limitations that hinder performance.
  • Opportunities: External factors and situations that create favorable conditions.
  • Threats: External factors and challenges that pose risks.

Using this matrix, display the information concisely.

Analyzing and prioritizing SWOTs

Rank the prioritization based on factors such as urgency, feasibility, and impact on goals. Use methods like weighted scoring and rating to convert SWOTs into metrics.

Developing strategies

Identify connections between internal and external factors and develop strategies based on the SWOT analysis. The goal is to find ideas that complement strengths, overcome weaknesses, exploit opportunities, and avoid threats.

Implement, review, and update

Implement the strategies and monitor their progress. Regularly review the SWOT analysis to keep it updated with internal and external changes and trends.

Real-life example: Subway

Strengths:

  • Subway has the highest number of outlets compared to its competitors.
  • It boasts over 37,000+ outlets worldwide.
  • It ranks third in brand loyalty and is considered healthier than McDonald’s and KFC.

Weaknesses:

  • Despite its vast number of outlets, Subway is not the most preferred restaurant.
  • Service quality fluctuates due to its franchise model.
  • Subway’s restaurant themes are outdated and need updating.

Opportunities:

  • With increasing demand for healthier options, Subway can leverage this and offer more healthy food choices.
  • It can diversify its menu beyond subs.
  • Improvement in home delivery and drive-through services.

Threats:

  • Faces competition from both traditional rivals and new restaurants with similar business models.
  • Lawsuits alleging serving stale and unhealthy food can harm the brand image.

Reference: UpMetrics Top 5 SWOT Analysis

Conclusion

SWOT analysis is an effective framework for improving decision-making and strategy development. Tailor it carefully to specific goals or objectives, but remember that it does not guarantee immediate or certain success.