How to Improve Your SWOT Analysis

We are all familiar with the traditional SWOT analysis used in a wide range of business planning activities, i.e. the 2×2 table of strengths, weaknesses, opportunities and threats. Unfortunately most SWOT analyses are poorly executed and provide little real benefit. Here are 3 tips on how to improve your SWOT analysis.

•    Source of Inputs
Too often SWOT entries are simply generated off the top of the head without much thought or factual basis resulting in many such entries being no more than generalisations or platitudes. This is most likely in a group environment where everyone needs to get some recognition for contributing. The best source of inputs is a full and honest assessment of the business answering the question “where are we now?” Such an assessment should be completed in advance and distributed for due consideration before undertaking the SWOT analysis.

•    Quality of SWOT Entries
The analysis should focus on the quality not the quantity of entries. Keep each entry to a short single sentence or phrase at a high level. Each entry must be specific, relevant to the planning period and vision of the business, and actionable.

•    Extend the SWOT Analysis
In preparation for converting SWOT entries into goals, extend the analysis as follows:
•     Each entry listed should have some Implication for the business.
•    Next, some Indicated Action should be linked to the Implication.
•    Then identify the Resources required to carry out the Indicated Action.
•    Finally, include any considerations of Opportunity Cost.
This will ensure a full analysis of each SWOT entry and provide the basis for goal setting. Further information on this extension of the SWOT analysis, together with a worked example of a small business, is available my e-book WORKING ON YOUR BUSINESS.

A good SWOT analysis is an essential link between the two important steps in any business planning of “where are we now?” and “where do I want the business to go?” These 3 tips will significantly improve your SWOT analysis and provide you a better outcome to your planning process.

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