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1. Can be very subjective. Two people rarely come up with the same final version of a SWOT. Use it as a guide and not as a prescription. (Antonia)

2. May cause organizations to view circumstances as very simple due to which certain key strategic contact may be overlooked. (Daniel)

3. Categorizing aspects as strengths, weaknesses, opportunities & threats might be very subjective as there is a great degree of uncertainty in the market. (Anna)

4. To be effective, SWOT needs to be conducted regularly. The pace of change makes it difficult to anticipate developments. (Annsley)

5. It lacks a detailed structure, so key elements may get missed. (Penelope)

Reference List:
https://www.cipd.co.uk/knowledge/strategy/organisational-development/swot-analysis-factsheet#gref
https://smallbusiness.chron.com/advantages-amp-disadvantages-swot-analysis-41398.html
https://www.javatpoint.com/advantages-and-disadvantages-of-swot-analysis
https://smallbusiness.chron.com/drawbacks-swot-analysis-22627.html
https://pestleanalysis.com/5-surprising-disadvantages-of-swot-analysis/

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A SWOT analysis is a planning tool which seeks to identify the Strengths, Weaknesses, Opportunities and T hreats involved in a project or organisation. It's a framework for matching an organisation's goals, programmes and capacities to the environment in which it operates.

This factsheet examines the four elements of SWOT and the process of conducting an analysis. It provides tips for conducting the analysis and a ready-to-use SWOT analysis template. The factsheet concludes by looking at scenarios when a SWOT analysis is most appropriate, as well as its advantages and disadvantages.

Carrying out a SWOT analysis

Transcript

A SWOT analysis is a management framework and diagnostic tool.

The outcome of the analysis will help you to understand factors both internal and external to your organisation which can impact upon strategy and influence business decisions.

The SWOT framework. SWOT is an acronym for:

S = Strengths
W = Weaknesses
O = Opportunities
T = Threats

When compiling your individual SWOT factors, I would recommend you also include applicable elements from your own department such as the HR function as well as general business factors.

Let's look at each of these factors more closely. Strengths and Weaknesses are often factors that relate directly to your organisation and have been described in our template as Internal factors, whereas Opportunities and Threats generally relate to factors outside your organisation that can be advantageous or identified to mitigate the potential risks involved.

STRENGTHS: What do you do well? What aspects of your people, products, assets and processes set you apart from your competitors? What are your organisations unique selling points and employee value proposition?

WEAKNESSES: In this section I advise you to be truthful and factually objective. Identify areas of vulnerability. What areas of your business and or HR function require change, to be more efficient or stopped if delaying or obstructing progress?

OPPORTUNITIES: What opportunities, trends, technological advancements do you know of or have researched that could strengthen your brand, target markets and internal operational processes. One useful way of identifying these would be to reflect on your weaknesses and how these can be improved upon.

THREATS: These generally consist of external forces that could negatively impact on business as usual. I would recommend you carry out a PESTLE analysis to understand the majority of factors in this section and possibly conduct a benchmarking exercise to uncover competitor activities.

Next steps: Share your findings with colleagues to gather additional insight or areas missed. Opportunities for improvements will generally incur costs so this may require a business case for additional budgets. Put a plan of action together, prioritise any proposals with time-scales, costs and additional resources required to action changes.

Good luck.

SWOT is an acronym for Strengths, Weaknesses, Opportunities, Threats. Occasionally, it may also be found as a 'WOTS up' analysis or the TOWS analysis. The technique is credited to Albert Humphrey who led a research project at Stanford University in the 1960s and 1970s using data from leading companies involved in long range planning processes.

A SWOT analysis is a planning tool used to understand key factors - strengths, weaknesses, opportunities, and threats - involved in a project or in an organisation. It involves stating the objective of the organisation or project and identifying the internal and external factors that are either supportive or unfavourable to achieving that objective. SWOT is often used as part of a strategic or planning process, but can be applied to help understand an organisation or a situation, and also for decision-making for many different scenarios.

The value of SWOT lies mainly in the fact that it offers self-assessment for management. The methodology has the advantage of being used as both a 'quick and dirty' tool or a comprehensive management tool, and that one (the quick) can lead to the other (the comprehensive). This flexibility is one of the factors that has contributed to its success.

However, while the elements can appear deceptively simple and easy to apply, experience shows that to do a SWOT analysis that's both effective and meaningful, requires time and a significant resource. Deciding what the strengths and weaknesses of an organisation are, as well as assessing the impact and probability of opportunities and threats, is far more complex than first appears. It requires a team effort and can't be done effectively by just one person.

Further, the inherent risk of making incorrect assumptions when assessing the SWOT elements can cause senior management to procrastinate when deciding between various strategic alternatives, frequently resulting in undesirable delays.

Carrying out and using a SWOT analysis is part of the core knowledge on enabling change in our Profession Map.

A SWOT analysis process generates information that is helpful in matching an organisation or group's goals, programs, and capacities to the environment in which it operates. The 'SWOT' itself is only a data capture exercise - the analysis follows later.

Strengths: positive tangible and intangible attributes, internal to an organisation and within the organisation's control

Weaknesses: internal factors within an organisation's control that detract from the organisation's ability to attain the desired goal. Which areas might the organisation improve?

Opportunities: external attractive factors that represent the reason for an organisation to exist and develop. What opportunities exist in the environment, which will propel the organisation? Identify them by their 'time frames'.

Threats: external factors beyond the organisation's control which could place the organisation mission or operation at risk. The organisation may benefit by having contingency plans to address them if they should occur. Classify them by their severity and probability of occurrence.

It's important to note the strengths and weaknesses are intrinsic value-creating skills or assets, or the lack of these, relative to competitive forces. Opportunities and threats are external factors which are not created by the organisation, but emerge as a result of the competitive dynamics caused by future gaps in the market. PESTLE analysis is used to look at opportunities and threats (external) elements.

Doing a SWOT analysis can be very straight forward, but its strengths lie in its flexibility and experienced application.

Decide how the information is to be collected and by whom (often a team approach is much more powerful than one person's view).

Identify appropriate sources of information.

Gather the information - it's useful to use a template as the basis for exploring the factors and recording the information. See our practical and ready-to-use template below.

Plot the findings.

Identify the most important issues.

Identify strategic options.

Write a discussion document.

Disseminate and discuss the findings.

Decide which activities are a priority in the context of the organisation's goals and values - a possible action plan framework appears below.

SWOT analysis template

Some useful tips for carrying out a SWOT analysis:

Collaborate - an analysis that involves multiple perspectives will deliver a better outcome.

Use expertise and resources that are already available within the organisation.

Use SWOT analysis in conjunction with other techniques, such as PESTLE analysis.

Incorporate the analysis into an ongoing process for monitoring changes in the business environment.

Try not to get bogged down collecting vast amounts of detailed information without analysing and understanding your findings appropriately.

Don't jump to conclusions about the future based on the past or present.

A SWOT analysis can be used for:

For example, using SWOT in a team meeting might include the following steps:

Invite contributors to participate in the SWOT process.

Explain the process and establish ground rules.

Identify strengths.

Identify weaknesses.

Identify or list the opportunities and threats - this may well have been identified from a PESTLE analysis previously.

Establish priorities - from your mission, vision and values work.

Question each list.

Plan for action.

There are a number of advantages and disadvantages of using the SWOT approach to analysis.

Advantages include:

It's a simple four box framework.

It facilitates an understanding of the strengths and weaknesses of the organisation.

It encourages the development of strategic thinking.

It enables senior managers to focus on strengths and build opportunities.

It can enable an organisation to anticipate future business threats and take action to avoid or minimise their impact.

It can enable an organisation to spot business opportunities and exploit them fully.

It's flexible.

Disadvantages include:

Some SWOT analysis users oversimplify the amount of data used for decisions - it's easy to use insufficient data.

The risk of capturing too much data may lead to 'paralysis by analysis'.

The data used may be based on assumptions that later prove to be unfounded.

Access to quality internal data sources can be time consuming and politically difficult (especially in more complex organisations - parent company, etc).

It lacks detailed structure, so key elements may get missed.

The pace of change makes it increasingly difficult to anticipate developments that may affect an organisation in the future.

To be effective, the process needs to be repeated on a regular basis.

This factsheet was last updated by Susannah Haan, Senior Corporate Governance Adviser, CIPD
Susannah leads CIPD's work on corporate governance and responsible business, including the role of HR in ESG, workforce reporting, leadership development and the role of non-executive directors.

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A SWOT analysis is a planning tool which seeks to identify the Strengths, Weaknesses, Opportunities and Threats involved in a project or organisation.

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1. Helps in the setting of objectives for strategic planning (Grace)

2. Provides a framework for identifying & analyzing strengths, weaknesses, opportunities & threats (Luna)

3. Provides an impetus to analyze a situation & develop suitable strategies and tactics (Idris)

4. Basis for assessing core capabilities & competencies (Felix)

5. Evidence for, and cultural key to, change (Rachel)

Reference sharing:
https://smallbusiness.chron.com/advantages-amp-disadvantages-swot-analysis-41398.html
https://pestleanalysis.com/benefits-of-swot-analysis/
https://www.managementstudyguide.com/
swot-analysis.htm
https://www.smartcapitalmind.com/what-are-the-advantages-of-a-swot-analysis.htm

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Small business owners must create products and services the customer values, and produce and deliver them in exceptional ways compared to the competition. To meet the challenge, a company must define its current business and operational objectives and goals, while considering factors that impact the same. Companies engage in structured brainstorming, which can be supported by a Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis. The SWOT methodology advantages, such as its use to address a variety of business issues, makes it a desirable tool to support some brainstorming sessions. However, the tool's disadvantages, such as the subjective analysis of an issue, make it less desirable for others.

The SWOT method serves as a tool to structure brainstorming sessions. As a result, a problem or process that's addressed using the SWOT tool may be thought of in terms of phases or a life cycle. For example, the strategic planning process consists of multiple steps or phases.

However, the SWOT analysis itself, like a brainstorming session, simply functions as a reusable tool to gain a collection of ideas regarding a particular issue or problem. For example, a business determines on each occasion, if a brainstorming session makes sense to address a strategic plan or competitive analysis. If so, the business then decides if it will use the SWOT method or an alternative tool to facilitate the session.

SWOT analysis can be applied to an organization, organizational unit, individual or team. In addition, the analysis can support a number of project objectives. For example, the SWOT method can be used to evaluate a product or brand, an acquisition or partnership, or the outsourcing of a business function. In addition, SWOT analysis can be beneficial in evaluating a particular supply source, a business process, a product market or the implementation of a particular technology.

SWOT analysis is conducted by specifying an objective and conducting a brainstorming session to identify internal and external factors that are favorable and unfavorable to the objective's achievement. This approach remains the same whether the analysis supports strategic planning, opportunity analysis, competitive analysis, business development or product development processes.

You can gain valuable information about your objective's chances by viewing each of the four elements of the SWOT analysis - strengths, weaknesses, opportunities and threats - independently or in combination. For example, identified threats in the business environment, such as new government regulations regarding a product design or the introduction of competing products, might alert the business owner that a proposed investment in a new manufacturing production line should be more carefully evaluated.

In addition, an awareness of a company weakness such as a lack of qualified employees might suggest a need to consider outsourcing particular functions. In turn, opportunities such as the availability of low-interest loans for startups might encourage the entrepreneur to pursue the development of a new product to meet a rising customer demand. In contrast, identified strengths, such as extensive experience in an industry experiencing rapid international growth, might suggest the need to partner with foreign companies.

SWOT analysis requires the combination of quantitative and qualitative information from a number of sources. Access to a range of data from multiple sources improves enterprise-level planning and policy-making, enhances decision-making, improves communication and helps to coordinate operations.

SWOT analysis requires neither technical skills nor training. Instead, it can be performed by anyone with knowledge about the business in question and the industry in which it operates. The process involves a facilitated brainstorming session during which the four dimensions of the SWOT analysis are discussed. As a result, individual participants' beliefs and judgments are aggregated into collective judgments endorsed by the group as a whole. In this way, the knowledge of each individual becomes the knowledge of the group.

Because SWOT analysis requires neither technical skills nor training, a company can select a staff member to conduct the analysis rather than hire an external consultant. In addition, SWOT is a somewhat simple method that can be performed in a fairly short time.

SWOT analysis leads to four individual lists of strengths, weaknesses, opportunities and threats. However, the tool provides no mechanism to rank the significance of one factor versus another within any list. As a result, it's difficult to determine the amount of any one factor's true impact on the objective.

SWOT analysis creates a one-dimensional model which categorizes each problem attribute as a strength, weakness, opportunity or threat. As a result, each attribute appears to have only one influence on the problem being analyzed. However, one factor might be both a strength and a weakness. For example, locating a chain of stores on well-traveled streets that grant easy access to customers might be reflected in increased sales. However, the costs of operating high-visibility facilities can make it difficult to compete on price without a large sales volume.

To significantly impact company performance, business decisions must be based on reliable, relevant and comparable data. However, SWOT data collection and analysis entail a subjective process that reflects the bias of the individuals who collect the data and participate in the brainstorming session. In addition, the data input to the SWOT analysis can become outdated fairly quickly.

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Advantages & Disadvantages of SWOT Analysis

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Advantages & Disadvantages of SWOT Analysis. The small business owner's challenge is to create products and services the customer values and the means to produce and deliver those products and services in ways that are exceptional compared to the competition. To address these challenges, a company must define ...