SWOT Analysis Guide

The comprehensive guide to the SWOT

analysis method
In the following guide we will introduce you to several widely used strategic planning
methods. They enable business executives and strategists to evaluate options, plan
for the strategic goals and implement the changes necessary to achieve those goals.
The evaluation version of the guide

Distribution note:
You may NOT distribute the original or modified version of the document.
Check more information about licensing in license.txt

BSCDesigner.com
AKS-Labs

SWOT Analysis Guide

Page 2

Copyright AKS-Labs

SWOT analysis: introduction and use of the

method in the business environment
If you are even remotely familiar with a business world, you have certainly heard about the
competitive environment, strategic planning and business analysis. There are several different
methods currently used in the business world and one of the most popular strategic
st
evaluation
tools is the SWOT analysis. SWOT stands for strengths, weaknesses, opportunities, and threats.

Strengths

Weaknesses

Opportunities

Threats

SWOT can be further classified in to internal and external factors. Strength and weaknesses belong
to the internal factors, and the opportunities and strength are classified as external factors.
Why use SWOT analysis you might ask? Well, it is a very useful
useful and highly effective tool when
planning for the strategic goals, when trying to analyze the environment the company operates in,
and it is a good visual illustration of the challenges company faces. What is unique about SWOT is
that it enables managers and executives to lists the key advantages and disadvantages of the
company and matches them with the external factors that will influence the companys
performance in the short and the long run.
To give you a better understanding of the method, lets look
look at some of the examples of strength,
weaknesses, opportunities and strength.
Strength

Rights to intellectual property; patents.

Strong brand.
High customer satisfaction.
Cost effective methods in operations.
Availability of cheap resources.
Advantage of a highly efficient and effective distribution networks.

Business Analysis Methods

Guide

AKS-Labs 2501 Blue Ridge Road

Suite 150 Raleigh NC 27607

www.measurebusiness.com
support@bscdesigner.com

SWOT Analysis Guide

Page 3

Copyright AKS-Labs

Weaknesses

No patents.
Weak or no brand developed.
Low customers satisfaction.
High cost structure.
Expensive natural resources.
Poor distribution networks.

As you have probably noticed, strength and weaknesses are exactly the opposites of each other. It
is true in a lot of real cases when the strength for one company is a weakness for another. If one
has an access to cheap energy and other company doesnt, the former has the strength over the
latter.

Strengths

Weaknesses

- Strong brand

- High costs

- Cheap resources

- No patents

Threats

Opportunities
- Technology

- Regulations

- Low trade barriers

-Trade barriers
SWOT

Opportunities

Underutilized customer market; there is a room to grow and generate revenue.

Modern technologies.
Relaxed regulations.
Globalization. Since there are fewer barriers, companies may expand.

Threats

Changing consumer needs and wants.

Substitute products and new entrants.
Regulations.
Trade barriers.

Business Analysis Methods

Guide

AKS-Labs 2501 Blue Ridge Road

Suite 150 Raleigh NC 27607

www.measurebusiness.com
support@bscdesigner.com

SWOT Analysis Guide

Page 4

Copyright AKS-Labs

As you can see, the method can be universally used for almost any condition and environment. It
is a tool that can be used in a broader sense and can be as specific as the problem requires it to
be.
A simple SWOT analysis graphic is shown below for illustrative purposes.
Stakeholders of the SWOT analysis are several. They are: management, employees, suppliers and
distributors, and customers. Lets not forget that the ultimate goal is to deliver
deli
the highest
customer satisfaction possible in order to generate revenue and maximize profits. SWOT provides
adequate procedures and guidelines for the management to practice. It states clearly the tactics
and communication patterns management has to implement
implement in order to achieve the strategic
goals. Employees are directed and trained to increase productivity and reduce errors. Suppliers
and distributors are considered in order to design highly effective and efficient supply chains and
distribution networks;
rks; and finally the customer satisfaction and loyalty is one of the most
important aspects that SWOT helps to evaluate and plan for.
Who uses the method? SWOT is used by the managers and top executives in the evaluation,
planning, and implementation process.
proce
In the evaluation process, top executives review the available resources, measure the revenues
and the target cost structures, and once ready, set out a strategic plan that stipulates the direction
that company is going to take. In this process, they evaluate all four characteristics and plan for an
appropriate course of action.
For the planning process, upper and mid level management reviews the graph, and gets familiar
with the key objectives as well as the resources available to them in order to achieve
ac
the strategic
goals. In the implementation process, thanks to the clear definitions of what is going to affect the
companys performance, employees have the advantage of knowing what to expect and what is
going to challenge them. SWOT helps them anticipate
anticipate the future hurdles and plan appropriately in
order to overcome the barriers.
As you can see, SWOT is an illustrative method of business planning and evaluation. It enables the
management to clearly identify the advantages and disadvantages they are faced with, and design
the realistic goals in order to achieve overall organizational success. Advantage of the method is
that it is versatile, it creates clear visual picture of the situation and can be modified and adjusted
fairly easily. One of the biggest
biggest advantages of the method is that it is very inexpensive and
provides highest results per dollar invested in to the analysis.
Cost efficiency and performance effectiveness is one of the reasons why the method has been
popular among the business executives
executi
sine the 1960s.

Business Analysis Methods

Guide

AKS-Labs 2501 Blue Ridge Road

Suite 150 Raleigh NC 27607

www.measurebusiness.com
support@bscdesigner.com

SWOT Analysis Guide

Page 5

Copyright AKS-Labs

SWOT and Balanced Scorecard

Before we go in to the details of the balanced Scorecard method and compare it to the SWOT
analysis, lets take a look at the BSC (Balanced Scorecard)) and define what it is, what it does and
how it differss from the SWOT analysis.
BSC is a strategic planning and implementation tool that assists management in the process of
achieving organizational goals. It is a method that enables cooperation and synchronization in the
business procedures. Typically, balanced
balan
Scorecard consists of several fields (usually 4), which lists
the subject of interest and the steps that would allow the company to reach highest results in the
listed fields.
A simple version of a basic BSC is illustrated below.

Balanced Scorecard

As you can see, there are four fields: financial, internal business procedures, learning and growth
and customers. We will discuss each one of them in little more detail in order to give you a better
understating of how the method works.
Financial; in thiss section managers list some of the key steps and goals they need to achieve in
order to succeed in their ultimate goal. Steps might be lowering fixed costs, low leverage, possible
IPO etc. As for the internal business process, it might involve training, better
b
communication,
changing organizational structure, etc. For the learning and growth, it might outline the process of
training, growth strategies (acquisition, franchising), and target market share. As far as the

Business Analysis Methods

Guide

AKS-Labs 2501 Blue Ridge Road

Suite 150 Raleigh NC 27607

www.measurebusiness.com
support@bscdesigner.com

SWOT Analysis Guide

Page 6

Copyright AKS-Labs

customers are concerned, management might

might define the strategy for increasing customer
satisfaction, brand development, and advertising.
What is important to understand is that, there is a difference between the SWOT and BSC. While
the SWOT analysis is mostly used in the broader planning procedures,
procedures, such as strategic goals for
the organization, BSC is a tool that has often been used in the process of achieving a specific goal.
To make it clear, SWOT is used to define the goal, and the BSC is used to design a plan to achieve
that goal.
BSC is not strictly limited to this particular purpose and can be successfully used in a broader
planning; but we have found that the method is most appropriate and useful when planning for a
particular strategy and steps for implementing it.
While the design presented
ted above is not a standard one, most frequently we encounter 4 field
designs. An alternative design is presented below.
SWOT and BSC have been in use for several decades and have proved to be effective and efficient
methods in business planning.
The two methods have frequently been viewed as competitors, but the consensus has been
emerging in the academic as well as the professional community that the two are more
complementary to each other than they are rivals.
Both methods are relatively cheap to design
design and implement, and provide a valuable insight in to
the key aspect that will determine the organizations success.
In conclusion it has to be mentioned that, BSC and SWOT are two methods that help define goals,
steps, and an overall organizational strategy;
strategy; they both have been used successfully for several
decades. Even in the modern age of technology and alternative methods, these two simple graphic
charts have been very popular among the top executives.

Business Analysis Methods

Guide

AKS-Labs 2501 Blue Ridge Road

Suite 150 Raleigh NC 27607

www.measurebusiness.com
support@bscdesigner.com

SWOT Analysis Guide

Page 7

Copyright AKS-Labs

More in the full version of the Business Analysis

An
Methods Guide:
Guide
29 page SWOT guide (Adobe PDF file):

Alternative methods to SWOT analysis

Steps in solving problems using Porters Five Forces for Competitive Position
Solving problems using the SWOT analysis - 5 examples in format: Problem, Response with SWOT,
Result
SWOT analysis: conclusions
SWOT FAQ
SWOT checklist

21 PowerPoint templates (.pptx file; check examples below) for SWOT analysis

presentation
32 page PEST Analysis Guide (Adobe PDF file)

Introduction to the method and problem of PEST

PEST and SWOT
PEST and its extensions
Step-by-step
step guide on how to use PEST for solving business problems
Key success factors of PEST
Examples of real-life
life usage of PEST
Conclusions
PEST FAQ
Checklist for PEST
Other aspects related to PEST

Review of the most popular business analysis methods

The review includes introduction to the method, step-by-step
step
step algorithms, pros and cons, best
practices.

80/20 Pareto Analysis (4 page)

Break-even
even Analysis (4 page)
Competitive Analysis (4 page)
Key Ratio Analysis (3 page)
PEST Analysis (3 page)
SWOT Analysis (4 page)
Variance analysis (4 page)
"What if..." simulation (4 page)

Learn more online: http://www.measurebusiness.com/

Business Analysis Methods

Guide

AKS-Labs 2501 Blue Ridge Road

Suite 150 Raleigh NC 27607

www.measurebusiness.com
support@bscdesigner.com