Using SWOT Analysis as atoolto formulate Strategy is one of themosteffective tool in Strategic Planning. It is afactualanalysis due to its extensivedatacollection and analysis of thedatacollected. It is effective because the analysiscovers a wide spectrum ofbusiness environment during data collection. Itstakes into consideration external business environment aswellas internal capabilities.
This isperhapsthe most powerful usage of SWOTAnalysisin the Strategic Planning Process. I amgoingto show you how toused the four factors of SWOT todevelopStrategies
Assuming you have collectedseveraldata pertaining to the Strengths,Weaknesses, Opportunities and Threats. Then youwilluse them to formulate strategy. Notsurehow to do it? Don'tworry;I take you through thesteps.
Step 1 - Evaluate thesurrounding
Let's take a moment tothinkabout both of us as thecoachfor two teams of footballteams.
Before the game starts, you and Ihavecertain strategies that we want theteamto follow. As the gameprogresses,there is sign of differencebetweenthe two teams in terms of thegameas well as the condition of theteammembers.
Step 2 - Identify theStrengths,Weaknesses, Opportunities and Threats
Now, it is time toevaluatethe teams in the fourfactorsof SWOT. Lets take thefollowingexamples as the result of theevaluation:-
Strengths - Your team isfullof fighting spirit
Weaknesses - One ofyourteam members is hurt
Opportunities -Youropposition team seems to losestamina
Threats - Your opposition team isfullof energy
Note: Some ofthesefactors seem to be conflictingeach other. For the purpose ofthisstep, this conflict is ignored.
Step 3 - Pair the SWOTfactorsto formulate strategies
Now, youwouldstart to formulate strategies in thefour categories. Namely:-
SO Strategies (Strengths andOpportunitiesStrategy )
ST Strategies (Strengths andThreatsStrategy )
WO Strategies (Weaknesses andOpportunitiesStrategy )
WT Strategies (Weaknesses andThreatsStrategy )
In this case, yourstrengthis "your team isfullof fighting spirit" andpairedwith your opportunities is "Oppositeteam is losing stamina".Withthis scenario, what would you do?Perhapsyou formulate a strategy to "ATTACK ".Thereit goes; you just formulate an attackingstrategy.
Then you do thesameprocedure for SW Strategies, WOstrategiesand WT strategies.
Step 4 -Evaluatethe strategic options
At the end ofthisparing of SWOT factors, youwouldhave end up several strategicoptions.Do a quick evaluation ofeachof these strategies to theextentof meeting the company objectives.
Step 5 - Selecting Strategic Options
Atthisstep, you would have alonglist of strategic options. Toomanystrategies to implement may not bepractical.Therefore, you need to shorten thelistto perhaps maximum three strategies.
After you have completed all the 5stepsto use SWOT Analysis toFormulateStrategies, you have a list ofstrategiesfor you to implement toyourbusiness.
The articlePros and Cons of Doing SWOT Analysiswas submitted byDr. LM Foong