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SWOT Analysis
David Creelman
What is SWOT Analysis?
SWOT stands for Strengths, Weaknesses, Opportunties and Threats. It is a popular framework used to help a company think through its situation. It is often used as part of a strategic planning exercise.
SWOT may simply involve management listing and discussing the organization's main strengths, weaknesses, opportunties and threats. Some facilitators will have more elaborate SWOT frameworks with various subcategories to be considered―for example, under "Strengths" the faciliator may ask management to identify its strengths in production, marketing, research, etc.
An Example
A typewriter manufacturer in the 1970's might have done the following analysis.
Strengths
-Well respected brand
-Excellent distribution network
-Efficient operations
Weaknesses
-Poor product development skills
-Risk adverse, slow moving corporate culture
Opportunities
-Markets in developing countries
Threats
-Word processors
The points listed are just a skeleton that adds structure to, or summarizes, a discussion by management.
Is SWOT Analysis Useful?
When facilitating a group discussion it is very helpful to have some framework to manage the discussion. SWOT is easy to understand and raises some good questions.
However, there is no special magic in SWOT. You could use any number of other frameworks to get an equally useful result. Furthermore, while a framework helps, its value is insignificant compared to the skill of the facilitator and intelligence of the managers taking part in the discussion. Lastly, as Henry Mintzberg points out in his magesterial "The Rise and Fall of Strategic Planning", an analysis never tells you what to do. It takes a creative act to go from analysis to decision making.
What HR Needs to Know
SWOT stands for strengths, weakness, opportunities and threats; it is a popular framework for strategy planning discussions.
Frameworks are useful, SWOT is a good one, but other frameworks are equally good.
Frameworks like SWOT are unimportant compared to the skill of the facilitator and the intelligence of the managers in the discussion.
SWOT helps you understand the situation but it won't tell you what to do.