A major part of the Business Mastery System I created is the periodic use of the Clarification phase of the system.
If your goal is to continually maintain a highly effective and well oiled business operation, you’ll need to conduct periodic analyses of your environment.
Generally, the tool we’re going to be discussing can be used for the entire company, a project within the company, a department and/or even a team.
The term, SWOT, is an acronym for Strengths, Weaknesses, Opportunities and Threats. The general use of the tool is to conduct “scans” of your operating environment. Most consider the “S” and the “W” to be used for an internal scan while the “O” and “T” are used for external scanning.
At the company level, you would consider internal to be within the company; and, external to be outside the company. If you’re considering a component of a company, like a department, then external could be considered outside the department but still inside the company.
However, to make the tool highly effective, you really don’t need to worry about that level of delineation.
Let’s go through the four components of a SWOT Analysis step-by-step.
Strengths are considered aspects of your “entity” which provide you an advantage over similar organizations; however, once again, it’s not vital for you to be doing a comparison vis-à-vis to others.
Simply determine the resources and capabilities you have which are strengths in your team’s minds.
Weaknesses are the flip side of Strengths. These are components and resources within your organization which need to be improved upon. Or, if they can’t be improved, need to be minimized regarding their impact on your organization’s ability to perform.
In general, an Opportunity exists when you can identify something, which if capitalized on, could be converted to revenues, reduced expenses or profits. Some examples include an unrecognized customer need, new regulations in your favor, the exiting of a competitor from the market, or the availability of a new employee.
These are areas that present a “clear and present danger” to your organization. If you read the list of potential Opportunities provided above and rewrite them slightly, they would represent an excellent list of potential Threats.
Be careful when you’re listing Threats. It’s easy to identify remote and obscure areas to potentially threaten your organization; however, there’s not much value in listing them. What you want on this list are items which are currently present or are likely to be present in the near future.
Supercharging The Analysis
Doing the analysis itself is important and should be done no less frequently than annually.
Even more important is the following exercise.
- Look at every single item listed anywhere in the SWOT Analysis.
- Identify a specific “potential initiative” for each item on the list.
- Rank each potential initiative based on its ability to impact revenue or profits dramatically.
- Next, select the top-five and re-rank them based on the ease of implementation.
- Finally, select the top three and establish a plan to bring them to fruition.
Make this exercise a regimen that you’ll repeat for your organization no less frequently than once per year.
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