SWOT-Analysis
A SWOT-Analysis is intended to produce a structured presentation of the strengths and weaknesses of the organization under consideration and to compare these with the opportunities and risks in the four environmental spheres (see the post “Environmental Changes are Crucial“).
The purpose of the opportunities/risks and strengths/weaknesses assessment is to
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- create the basis for strategic planning and
- define the potentials for success required for its realization.
The SWOT-analysis is primarily prepared by the top managers of an organization. They determine the direction in which the company/organization should develop and assess whether the targeted development will be feasible in the medium-term time horizon. The decisions derived from the SWOT-analysis form the template for the strategic and operational planning managers.
The subordinate management levels should derive with which services and products the company will achieve strong positions in which markets and which results should be achieved (corporate policy definitions).
The assessment and documentation of external opportunities and threats and the evaluation of the company’s own strengths and weaknesses form the input for strategic and medium-term planning.
Analysis of the environment and the company’s own position
The widely known SWOT-matrix shows the initial questions for the analysis:
Company environment: in which environmental areas opportunities for new products and services are presumed and which threats could prevent success?
Assumptions for the own development: In which product/market combinations does the company see its strengths for expanding its market position, and which of its own weaknesses could hinder success?
The above questions on opportunities and risks are examples. This also applies to the assessment of the strengths and weaknesses of your own company.
If a company’s management prepares its own SWOT-analysis and records its findings in the matrix, the subsequent management levels can align their strategic plans and, above all, the development of future potentials for success accordingly.
How strategic and medium-term plans are derived from the SWOT-analysis for the company as a whole is the subject of the following posts:
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- Corporate policy: mission, values and vision
- Strategies and functional concepts
- Planning stages.
- Strategy development
- From draft strategy to the implementation project