A SWOT analysis is using focused, accurate, fact-based data to evaluate the strengths, weaknesses, opportunities, and threats to your business or product.
SWOT analysis is one of the very powerful ways to analyze and evaluate your business and its’ strengths, weaknesses, opportunities, and threats. In this article, we will go over:
What is a SWOT analysis?
A SWOT analysis is using focused, accurate, fact-based data to evaluate the strengths, weaknesses, opportunities, and threats to your business or product. This analysis (one of many frameworks) is a powerful exercise because it is not based on guesses, but rather on what you already experience each day. It is also one of the most used.
Let’s think about it quickly… a SWOT analysis is visualised as a grid of the four focus areas – strengths, weaknesses, opportunities, and threats. Within each of those four areas, you fill out the qualities, components, or weaknesses that fall into that area.
These are areas that put you ahead of the average rival. For some companies this may be their reputation, pricing, brand, product expertise, etc. If you are doing a SWOT analysis of your business, think about how you win vs your competitors. It may be as simple as the above. If you are doing a SWOT analysis of your product, examples are: breadth of integrations, price point, customer support, ability to answer a specific needs, etc.
I find it helpful to craft the SWOT analysis as if you were a consultant looking in, such as: “Their ______ is a strength they have.” This ensures that egos are left behind if you may realise that you do not have many strengths, and to prevent bullsh*t strengths from getting added to the board that are not strengths.
These are areas where you are weaker than your rivals. These may include supporting clients that no longer match your product, lack of capital, outdated processes, missing parts of your products, or even skill sets that are missing from the organisation. If you are working as a group, it can be tough to call out areas missing in the business. Performing the SWOT as if you were a group of consultants looking in is a powerful strategy to stay realistic.
What could you take advantage of RIGHT NOW that would put you ahead of your Rivals? Maybe you could take advantage of a technology, jump into a space left by a calendar, reposition around a regulation in your industry, etc. Opportunities, unlike strengths and weaknesses, are external to the organisation.
Here is where you put the external and internal risks to your organisation. A new privacy regulation could terminate your ad algorithms, an employee could share a trade secret, a rival could fake their way into a demo. Many of these threats are items that already keep you up at night. Get them out, share your nightmares and put them into paper.
“I find it helpful to craft the SWOT analysis as if you were a consultant looking in. “Their ______ is a strength they have.” This ensures that egos are left behind if you may realise that you do not have many strengths, and to prevent bullsh*t strengths from getting added to the board that are not strengths.”
When should you do a SWOT analysis.
Sadly, many companies only do SWOT analysis when they feel that they are losing track on what is occurring in the market and their own industries. I am a very big proponent of not becoming blind to your rivals, customers, and market; and recommend to not let your SWOT go out of date. Book a strategic session to do this as soon as possible, and constantly review it as new situations happen that impact any of these (new regulation, big rival release, losing deals that you used to keep). You can use Rival’s “Report” tab to house your SWOT analysis and tie new market changes directly to your SWOT to keep it up to date.
In doing a SWOT analysis, you need to ensure you have a roomful of strategic thinkers. Think about who is kept up at night worrying about the future of the organization or product… those people are the ones you need to have in your first SWOT session. As I mentioned before, try to do it as if you were outside looking in, and use Post-its or a whiteboard for the first session. Focus on the areas in the order above and ask what those points are for each area. This is a great time to ask “why” to ensure everyone in the room understands the reality behind the item. Some organizations have silos between different departments that keep weaknesses to remain unseen. This is most common with regulations, competitive intelligence, and market intelligence.
After you have gone through all 4 areas, digitise it so that everyone can digest and think about the results. After the session, book a meeting for a few days later (with the same individuals) where you talk about strategic changes based on the analysis.
Simple rules for doing any SWOT analysis:
Applying the analysis is the most important step of the whole process. This level of strategy is not yet about market differentiation (Chapter 5), but rather on strengthening the current state of the business. These are all applicable whether you SWOT is strategic, competitive, or product focused.
To start, you review each of the categories and evaluate the following:
If you are ready to apply some of these learnings in your organization, check out our template pack of analysis frameworks.
Our Product Manager’s Playbook will help you become more data-driven in your strategic efforts. Rather than haphazardly throwing ideas all over the place (and getting lucky every once in a while), you’ll put more data behind stronger ideas.
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