S.W.O.T. isn't only for flies....

One of the first business models a student is taught is the S.W.O.T. analysis. For anyone who was absent the day the concept was introduced here's a recap...

S stands for Strengths!

W stands for Weaknesses!

O stands for Opportunities!

T stands for Threats!

Isn't that nice and easy!

Obviously, there is more work to be done in this model than meets the eye.
First of all, we need to understand what a S.W.O.T. is used for. It is used to evaluate the current situation within an organization and its environment in order to make decisions for the future. The problem is, the information used in the S.W.O.T. is gathered by using other business models. Technically, you are supposed to do a P.E.S.T.E.L., Porter's 5 Forces, and so on and from the information found there, then you come up with a S.W.O.T. analysis.

To be specific, the Strengths and Weaknesses are determined by models that describe our internal environment. Why not add an example? They always help.

When you think of strengths and weaknesses think about what your organization does better than its competitors. So being really, really nice is not a strength of a company, unless all of their competitors are jerks! Or... good technology, is that a strength? Not if you don't use it! It's like a man being well endowed, if he doesn't know how to use it, it isn't one of his strengths! Am I right or am I right!!! If you are still wondering where to find strengths and weaknesses you can also look at your 7 S's model. If you don't know this model, please look for it in the Business Models for Dummies section of this blog.

Now for the Opportunities and Threats. Now these are taken straight out of the P.E.S.T.E.L. and Porter's 5 Forces models. The P.E.S.T.E.L. is the external macro environment and Porter's is for the internal Micro environment. An opportunity is whatever benefits you can find in the P.E.S.T.E.L. If laws made benefit you, if they are going to build a new highway that passes by your organization, and so on may be opportunities. Remember, an opportunity for one organization is a threat to another. Using the highway example, if you are opening a fast food place, a highway being built next to it is a godsend. But if you have a retreat spa, then a highway with cars making noise and so on will pretty much ruin your quiet sanctuary. Stick to the P.E.S.T.E.L. and you will find your opportunities and Threat

So, I guess, a S.W.O.T. is a nice little wrap up of all the hours of hell looking for information for a P.E.S.T.E.L, and Porter's, and so on. Don't make the mistake of making a second rate, incorrect model because it seems easier to fill in the sections with generic answers that were stated before.
Oh yeah, I hope I don't have to explain what a strength, weakness, opportunity, or threat are for a company! The main thing is understand that a S.W.O.T. is a gathering of information already gathered in a nice, neat format. Good Luck!

By Maria