SWOTting Your Strategic Problems Away

Understanding the strategic environment you’re competing in is the foundation of any worthwhile strategic plan.  Fortunately there’s an easy way to get your arms around the complex market dynamics you face.

Strategic planning requires you to understand the competitive landscape in which you’re operating. A great tool you can use to assess the environment is called a SWOT Analysis. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.

For strengths and weaknesses, those are typically within your own organization. They’re capabilities you have or don’t have. As far as opportunities and threats, they can either be internal or external market-facing opportunities and threats.

As you build a SWOT Analysis you’ll want to have the team together and have people throw out their ideas in each of those quadrants. It’s generally a brainstorming session. Your job is to capture all the ideas. We’ll synthesize them later. Let me walk through an example.

Strengths

Perhaps we start our SWOT Analysis and we look at our strengths. Our strengths consist of:

– The brands we have

– How efficient our supply chain is

– The strength of our sales force and how well they sell our products

– Safety within our manufacturing plants

– Our recruiting information technology

– Our financial position

As I’ve laid out the strengths, notice they’re all internally-facing capabilities of the company.

Weaknesses

Then I look at weaknesses and ask people “where are our gaps?”. We may have gaps in:

– Our expense reporting process

– Our information technology desktop support for our laptops

– Our digital marketing program

– Our intern program

– Our acquisition integration skills (because we’ve done acquisitions before and they really haven’t gone that well)

Opportunities

Now we start looking outside the organization at our opportunities and threats that we face. Opportunities might be:

-The growth of social media and how we can take advantage of it

– The bankruptcy of Acme (one of our main competitors)

– Our ability to sell 3rd party products through our supply chain

– An opportunity to do couponing of our products at retail

Threats

Last we look at the threats that we face within the market as well as internally. We may face threats of:

– Our customers are going to push us on pricing

– Our competitors may be poaching our talent

– The weather in Ohio where we have some of our operations

– Acme possibly being bought by one of our competitors

– Economic trends because our products are a discretionary purchase by consumers (if the economy worsens, our sales could go down)

Once I’ve looked at that total picture, I’ll have a better sense for the strategic environment surrounding my strategic planning efforts.

Refining the SWOT

Once you’ve conducted your SWOT analysis, it’s time to refine it. You should be looking to synthesize ideas and look for major themes that emerge. What I recommend when you do this is first, eliminate things that aren’t going to be major strategic themes. Looking at our SWOT above, we might say that plant safety, while it’s important, is not a major strategic theme. Nor is expense reporting or IT desktop support. They’re important, but they’re not strategic. We’d cross those items off the list.

Continuing the analysis, we might say couponing isn’t that big of a deal. And, in our Threats, we say Ohio weather, while it’s important, it’s only 2% of our market. We’d cross off both of those items. Now we’ve shortened the list that we can look at to identify major strategic themes.

Strategic Themes

As we look at our themes and we look at the items across the entire SWOT, we notice that we have strengths in brands and supply chain and sales force. We also have some problems in our digital marketing program. There’s huge social media growth and the economy is a risk. What we generally have here is a major strategic theme around sales, marketing, branding and how we go to market. Document that as a major theme.

We then look at what’s left on the SWOT that we haven’t captured in a major theme. In this example, we’ve got some things around our financials which are very strong. We’re not that good at acquisition integration. Acme has gone bankrupt, and there’s a large risk of somebody else buying Acme and bringing them back into the market. There may be a major strategic theme here around acquisitions – whether we look at acquiring Acme or taking defensive actions to prevent that acquisition from hurting our organization.

To summarize – look at your SWOT, get rid of the things that aren’t major strategic themes and then try and synthesize those major themes. Those themes will ultimately feed into the strategic initiatives that you think about pursuing and prioritizing as the highest priority items within the ultimate strategic plan.

Want to learn more about this topic? How about taking an entire course on it? Check out the video below to learn more about the course and get started. Or you can go directly to the course and start learning more about strategic planning fundamentals.  The entire course is available at lynda.com. Enjoy!

– Mike Figliuolo at thoughtLEADERS, LLC

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