To SWOT or not – that is the question. Some consider it out dated and over simplified, I like to use a modernised quantitative version to inform my business strategies and plans. Listen on to learn how a SWOT can improve your business model and plans.
What is a SWOT:
SWOT (strengths, weaknesses, opportunities, and threats) analysis is a framework used to evaluate a company’s competitive position and to develop strategic planning. SWOT analysis assesses internal and external factors, as well as current and future potential.
- Strengths – Strengths describe what an organization excels at and what separates it from the competition: a strong brand, loyal customer base, a strong balance sheet, unique technology, and so on.
- Weaknesses – Weaknesses stop an organization from performing at its optimum level. They are areas where the business needs to improve to remain competitive: a weak brand, higher-than-average turnover, high levels of debt, an inadequate supply chain, or lack of capital.
- Opportunities – Opportunities refer to favorable external factors that could give an organization a competitive advantage. For example, change sin tariffs may speed up entering a new export market, increasing sales and market share.
- Threats – Threats refer to factors that have the potential to harm an organization. Common threats include things like rising costs for materials, increasing competition, tight labor supply.
Disadvantages include:
- Many organizations spend half their time looking internally at strengths and weaknesses.
- Disruptive organizations stay focused on learning outside of the
- You have to be willing to walk away from some customers in order to run toward the future.
The modern SWOT
A modern approach to the SWOT using a Gap Analysis to see the gap between expectations. By establishing this SWOT as a survey, organisations can have more specific assessment in critical quadrants of the business model
Business model SWOT
The SWOT analysis help you explore the strengths, weaknesses, opportunities, and threats of your business model and visualize on a canvas where business model canvas needs to improve.
To analyse the company’s business model against the 9 building blocks of the Business Model Canvas we use a list of analytical questions (derived from OSTERWALDER and PIGNEUR 2010) that you should reflect on in order to determine exactly what areas of your business model need adaptations and where you should focus strategic or planning gaps.
It also has the benefit that progress on achieving those objectives can be similarly measured using the same SWOT approach comparatively 2-3 years later.
The numeric SWOT
The use of conventional SWOT analysis is based on the qualitative analysis and has no means of determining the importance of each SWOT factor. Turning your SWOT into a numeric representation provides a useful outcome by using the traditional brainstorming approach first and then to prioritise gaps providing a numeric value.
Overall, it does helps organisations learn about themselves as well as competitors and can be used as the foundation for developmental strategies.
Recommended reading
Download template – for a Business Model SWOT
Business Model Generation – Alexander Osterwalder and Yves Pigneur
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