SWOT Analysis

Introduction

A SWOT analysis is a simple yet versatile tool to help you to analyze a wide range of situations. These could be anything from weighing up options for the location of a new building, to formulating and revising the organization’s strategic direction.

There are many management situations where these four headings provide a useful basis for questioning and decision-making.

Essentially you can use SWOT to:

• Establish your present situation
• Evaluate your potential options

 

SWOT stands for:

• Strengths
• Weaknesses
• Opportunities
• Threats

Charting the results

The information gained can be recorded in a number of ways, the most common being in the form of a simple matrix. :

POSITIVE NEGATIVE

INTERNAL Strengths Weaknesses

EXTERNAL Opportunities Threats

Despite the large amounts of information that you may have at your disposal, it is important when performing a SWOT analysis that only around 5–8 points are listed in each of the two areas (internal and external).

Where do I get the information for the SWOT analysis?

You can use a SWOT analysis as a decision-making or problem-solving tool for relatively simple, individual situations. In which case, a few carefully thought out questions might suffice. However, if you are using it to formulate and revise your department’s strategic direction, it is vital that the information that goes into your SWOT analysis is accurate and thorough.

SWOT Analysis

Use the results from one or more of the following techniques and methods to equip yourself with the information necessary to perform an accurate SWOT analysis.

Resources and competencies (Strengths and Weaknesses)

Benchmarking, financial analysis, historical analysis, cost-efficiency measures, core competencies, performance indicators and quality measures.

External environment (Opportunities and Threats)

Environmental analysis techniques such as: PEST (or PESTLE) analysis and scenario planning.

Ok, so I’ve completed the SWOT analysis. What next?

Analysis of your completed SWOT should be divided into two parts. For strengths and weaknesses, ask the following questions: What are the consequences of this? Do they genuinely help/ hinder what we want to achieve? (If they do not, they should be removed from the SWOT.)

• What factors are responsible for this strength/ weakness?
• How can we turn our weaknesses into strengths?
• How can we marry our strengths to current opportunities?
• Are there factors that are likely to exacerbate our weaknesses? If so, how can we avoid this?

For opportunities and threats, ask these questions:

• What changes are likely to result from these? Will they genuinely help/ hinder what we want to achieve? (Again, it is important to note only those factors likely to have a real impact on what you want to achieve.)
• What should our response be to these?
• Are there any threats that we can turn into opportunities?
• Once these questions have been answered, it is important to spend some time analyzing the results, looking particularly at the causes of the strengths and weaknesses, and what needs to be done in the face of the newly identified opportunities and threats. A SWOT analysis should end

with the linking of this analysis to action points for the team to pick up and follow through.

The Key Distinction - Internal and External Issues

Strengths and weaknesses are Internal factors. For example, a strength could be your specialist marketing expertise. A weakness could be the lack of a new product.

Opportunities and threats are external factors. For example, an opportunity could be a developing distribution channel such as the Internet, or changing consumer lifestyles that potentially increase demand for a company's products. A threat could be a new competitor in an important existing market or a technological change that makes existing products potentially obsolete.

it is worth pointing out that SWOT analysis can be very subjective - two people rarely come-up with the same version of a SWOT analysis even when given the same information about the same business and its environment. Accordingly, SWOT analysis is best used as a guide and not a prescription. Adding and weighting criteria to each factor increases the validity of the analysis.

Using SWOT to revise your strategic direction

One such application might be to analyze the relevant strengths, weaknesses, opportunities and threats, tied specifically to formulating and revising your department’s/organization’s strategic direction.

SWOT provides a framework for analyzing the internal and external influences on your team/organization and the degrees of preparedness within the team to met them. This can be linked to your current strategic plan.

The strengths and weaknesses represent the internal factors within your organization that are under your control. So, for instance, this might include issues such as people, systems, culture and technology.

Similarly, opportunities and threats are external factors and therefore outside your control (but often possible to influence). You might find additional  frameworks helpful, such as PEST (politics, economics, society and technology), a useful structure for considering the variable external factors. To help you carry out a simple SWOT analysis, you might find the following questions a helpful starting point:

 Strengths

• What things do we do well? (Think about your people, systems, culture and the organization in general.)
• What positive feedback have we had?
• What is our unique competitive advantage? What are our core competencies?

 Weaknesses

• What could be improved? (Again, think about your people, systems, culture and the organisation in general.)
• What is done poorly?
• Perhaps others perceive weaknesses that you do not see? Do your competitors perform better?

 Opportunities

• What opportunities do you see which might be exploited?
• Are there any interesting market-based or technological trends, changing government policy or local events you might exploit?

 Threats

• What obstacles do you face?
• What is the competition doing?

Charting the results

The information gained can be recorded in a number of ways, the most common being in the form of a simple matrix. :

POSITIVE  AND NEGATIVE CONCEPTS

INTERNAL Strengths  & Weaknesses

EXTERNAL Opportunities & Threats

Despite the large amounts of information that you may have at your disposal, it is important when performing a SWOT analysis that only around 5–8 points are listed in each of the two areas (internal and external).

Where do I get the information for the SWOT analysis?

You can use a SWOT analysis as a decision-making or problem-solving tool for relatively simple, individual situations. In which case, a few carefully thought out questions might suffice. However, if you are using it to formulate and revise your department’s strategic direction, it is vital that the information that goes into your SWOT analysis is accurate and thorough.

Use the results from one or more of the following techniques and methods to equip yourself with the information necessary to perform an accurate SWOT analysis.

Resources and competencies (Strengths and Weaknesses)

Benchmarking, financial analysis, historical analysis, cost-efficiency measures, core competencies, performance indicators and quality measures.

External environment (Opportunities and Threats)

Environmental analysis techniques such as: PEST (or PESTLE) analysis and scenario planning.

Ok, so I’ve completed the SWOT analysis. What next?

Analysis of your completed SWOT should be divided into two parts.

For strengths and weaknesses, ask the following questions:

• What are the consequences of this? Do they genuinely help/ hinder what we want to achieve? (If they do not, they should be removed from the SWOT.)
• What factors are responsible for this strength/ weakness?
• How can we turn our weaknesses into strengths?
• How can we marry our strengths to current opportunities?
• Are there factors that are likely to exacerbate our weaknesses? If so, how can we avoid this?

 For opportunities and threats, ask these questions:

• What changes are likely to result from these? Will they genuinely help/ hinder what we want to achieve? (Again, it is important to note only those factors likely to have a real impact on what you want to achieve.)
• What should our response be to these?
• Are there any threats that we can turn into opportunities?

 Once these questions have been answered, it is important to spend some time analyzing the results, looking particularly at the causes of the strengths and weaknesses, and what needs to be done in the face of the newly identified opportunities and threats. A SWOT analysis should end with the linking of this analysis to action points for the team to pick up and follow through.

 The Importance of Strategic Planning

What are you looking for in your team? Is it an open environment where team members can use creativity to address solutions? A collaborative environment where team members work together for the best solutions?

Teams evolve with time and the effort of all the team members, so you can't expect success at the first meeting. In this section we will talk about tools you will need to use with your team to help it become a success.

Having a direction, establishing goals and developing a strategic plan are necessary for a team to be successful. This section guides you through the strategic-planning process using a S.W.O.T. analysis. Completion of the S.W.O.T. analysis will give the team a better idea of the strengths, weaknesses, opportunities and threats of the operation. These will guide you on your journey to a successful team, and most importantly, an improved dairy operation.

Committees, groups, businesses, organizations, and even communities frequently use S.W.O.T. analyses to determine their capacity to move forward and address advancing issues. You will want to include the S.W.O.T. analysis as an agenda item for your team in the early stages of development, but after the team has had a chance to tour and learn about the operation so they can better address the components of the analysis.

Completing the Analysis - The Producer's Role

You will want to complete the S.W.O.T. analysis at one of your first team meetings. Prior to this, you should give the team an orientation tour of the farm and background information so they have more information to use in this process. The team coordinator should give the team information before the meeting so they can begin thinking about the process and make better use of the team meeting.

Prepare yourself - you want the honest input and impressions from the team to come out through this process. Don't be offended or become defensive if sensitive items are mentioned. Team members will be much more comfortable sharing their honest opinions if you can remain in the listening mode.

One approach is to work through this process first with your team coordinator. Then sit back and listen. Let the coordinator facilitate the discussion and include any of the issues you might have discussed earlier that are not brought up by the group. If you have done a good job in the orientation process, the team will most likely identify the issues that are important to you.

Another approach is for the coordinator to start the process of identifying strengths with the team members and then start with you when identifying weaknesses. Your role at this time is to listen; so sit back and see what you can learn from the perspectives of others.

Completing the Analysis - The Process

The coordinator/facilitator will introduce the concept of S.W.O.T. analysis to the team. They will want to have a flipchart, posterboard, or something that can be used for taking notes during the sharing of ideas. This should be divided into four quadrants - one for each of the components of the S.W.O.T. analysis. The internal-external differentiation between the categories is often confusing to groups, so you may want to list these on your chart as well, to make this easier to remember

The coordinator/facilitator will lead the group through a brain-storming process for each of the four component areas. Before beginning, the group will want to agree to some brainstorming rules. Here are some that you might want to include:

1. No one reacts (negatively or positively) to another person's idea. In brainstorming, we want to get  as many ideas out as possible in a short time frame. You'll have time to react later. As the brainstorming process proceeds, the ideas become more innovative and less practical. These innovative, but less practical, ideas later in the discussions are refined into novel solutions to old problems. This is the power of brainstorming.
2. Everyone has equal opportunity to share their ideas.
3. Once on the table, ideas lose ownership from the presenter and become property of the team.

As you go through the process, the facilitator will want to allow time for each person to think about each item before group sharing. Each participant should have a pen or pencil and paper so they can make notes. It works best if you give the team members 3-5 minutes before group sharing begins to think and make their notes. When the sharing session begins, each person can share from their list and pay better attention to the ideas of others. Repeat the series of individual thinking time followed by team sharing for each of the four quadrants.

Completing the Analysis - The Summary

The S.W.O.T. analysis session should end with the team completing a summary that analyzes the current condition. Lead the team through the items identified during the sharing session and discuss as a group the desired goal or standard for each of these items. The completion of this process is reason for celebration, so be sure to reward or express appreciation to each of the team members for their participation in this process.

Defining S.W.O.T. - Internal vs. External Factors:

A S.W.O.T. analysis recognizes that there are both internal and external factors that can affect the ability of the farm to be successful.

Internal factors are those that can be addressed on the farm. This would include conditions that might be addressed by operating procedures and/or management decisions on the farm. Your team will be most effective in working in this area.

External factors are those over which you have little influence, or are not in a position to change, but which have a direct influence on the success of your business. Probably one of the best examples of this in the dairy industry is the milk price, which is established by federal milk markets and influenced by global policies and economic forces over which the farm has very little control.

Each of the components of the S.W.O.T. analysis is described below. We'll start with the internal components, or those over which the farm has control:

S - Strengths: What this farm does best. Generally the farm is doing above average as compared to other farms in these areas. These strengths will be considered for business augmentation. (i.e. A producer that is good with people might consider having more employees that compliment personal weaknesses, thus making the business stronger.)

W - Weaknesses: Areas that this farm needs to improve. Generally the farm is below average as compared to other farms in these areas and needs to make some changes to recognize improvement. (i.e. A producer that is challenged in the area of crop production might consider other ways to grow crops and focus on the cow side where they are stronger.)

 Now we'll define the external components, or those over which the farm has little influence:

O - Opportunities: What conditions in the industry or the community might the farm use to improve its position?

T - Threats: What conditions in the industry or community might undermine the success of the farm operation?

Visioning is best aided by SWOT analysis.

"SWOT" is a simple acronym for Strengths, Weaknesses, Opportunities and Threats. SWOT analysis consists of the following two activities:

1.     An assessment of the organization’s internal Strengths and Weaknesses and

2.   An assessment of the Opportunities and Threats posed by its external environment

SWOT analysis provides a framework for visioning by helping the planners to identify and prioritise the organization’s GOALS and to further identify the strategies of achieving them.

Assessing the Internal Environment

     

Internal scan or assessment of the internal environment of the organization involves identification of its strengths and weaknesses i.e., those aspects that help or hinder accomplishment of the organization’s mission and fulfillment of its mandate with respect to the following Four Ps:

1.   People (Human Resources)

2.   Properties (Buildings, Equipments and other facilities)

3.   Processes (Such as student placement services, M.I.S etc.)

4.   Products (Students, Publications etc.)

Assessing the External Environment

External scan refers to exploring the environment outside the organization in order to identify the opportunities and threats it faces. This involves considering the following:

1.     Events, trends and forces in the Social, Technological, Economical, Environmental and Political areas (STEEP).

2.     Identifying the shifts in the needs of customers and potential clients and

3.     Identification of competitors and collaborators.

SOME MORE INPUTS ON SWOT ANALYSIS

.   PURPOSES OF SWOT ANALYSIS

SWOT analysis is conducted in order to identify an organization's internal Strengths and Weaknesses and also the Opportunities and Threats posed by its external environment. It enables the planners to identify the following:

(1)	Strengths	:	Internal things we have that are good OR do well
(2)	Weaknesses	:	Internal things we do not have OR do not do well
(3)	Opportunities	:	External factors that may help in the achievement of our Mission.
(4)	Threats	:	External factors that may be barriers to achievement of our Mission

INTERNAL SCAN

For the internal scan the guide is to examine the four Ps - People, Properties, Processes and Products.

 (i)             People (Human Resources)

·      Teaching Staff

·      Administrative Staff

·      Technical supporting Staff

§  In each category consider the number of staff available, their qualifications, commitment and motivation.

·     Students

§  Quality of students enrolled

(ii)            Properties

Infrastructure, Buildings, Laboratories, Workshops, Library, Auditorium, Guest House, Equipment, Machinery, Tools, Vehicles, Furniture etc.,

(iii)           Processes

·      Governance

·      Management & Administration

·      Curriculum Development

·      Teaching - Learning

·      Student Support Services

·      Staff Development

·      Information System (M.I.S.)

·      Communication

(iv)          Products

·      Students

§  Percentage of Pass in the examination

§  Percentage of Job - Placement 

·                     Publications

·                     Items manufactured / fabricated in the Production Centre

EXTERNAL SCAN

For the external scan the planners have to identify and evaluate the Social, Technological, Economic, Environmental and Political factors (STEEP) in the environment outside the organisation, which affect its success or survival.

(i)   Social factors	:	Demographics, Participation of    Women, Opportunities and access to training for disadvantaged people.
(ii)   Technological factors	:	Impact of computers, Modern communication technologies, Microprocessor etc.
(iii)   Economic factors	:	Liberalization, Privatization and Globalization of Economy, Development of specific sectors of industry, Unemployment and Underemployment, Development of Entrepreneurs etc.
(iv)   Environmental factors	:	Depletion of Natural resources, Environmental sustainability, Pollution control, Energy consumption, Regulations of World Trade Organization etc.
(v)   Political factors	:	Legislation   affecting   education   and   training, Control of Curriculum, Budgets and Teacher qualification, Degree of central versus local control etc.

While assessing the external environment the planners have to also consider the forces and trends in terms of the Institute’s Customers, Clients, Competitors and Collaborators (CCCC).

Customers    -           The employers who hire the graduates of the institute are in fact the customers of the institute.  What do these employers need in terms of skills, knowledge and attitudes in potential employees and current employees?

Clients                -     The full-time students are clients of the institute, but there is a much larger potential market of clients for part-time, evening and weekend courses – adults seeking job-related and personal development skills and knowledge.  What does this market have to offer in terms of opportunities?

Competitors    -         Public and private institutions which do or can potentially draw away the students (clients) and employers (customers) who hire graduates of the institute.  Are there some opportunities for sharing and helping even more people, or do these institutions threaten to restrict or even close down the polytechnic?

Collaborators   -        All of the partners and supporters of the institute, such as The Chamber of Commerce and Industry, societies and associations of engineers and business owners, apex advisory councils and committees, other educational institutions and particular Government and funding agencies.

  

TOOL FOR SWOT ANALYSIS                                     

·           Conduct Focus group meeting

-          Invite faculty members to meet for about an hour and “focus” them on the Four Ps or STEEP to give their perceptions of the strengths and weaknesses or opportunities and threats. 

-          QUESTIONS TO BE ANSWERED

STRENGTHS	What makes us special?      What resources (inputs) strategies (processes) and performances (outputs) do we handle well? (Focus on the “Four Ps”)      What are our major internal strengths?
WEAKNESSES	What are our soft spots?      What resources (inputs), strategies (processes) and performances (outputs) do we not handle well or at all? (Focus on the “Four Ps”)     What are our major internal weaknesses?
OPPORTUNITIES	What trends and events can help us?      What are the positive social, technological, economic, environmental and political forces influencing us? (Focus on the “STEEP”)      What are our major external opportunities?
THREATS	What trends and events can hinder us?      What are the negative social, technological, economic, environmental and political forces influencing us? (Focus on the “STEEP”)      What are our major external threats?