SWOT Analysis … No Tanks or Commandos

SWOT AnalysisA strategic plan helps you to determine if your goals and plans make business sense with an honest assessment of your capabilities in the current environment. The SWOT analysis was devised by Albert Humphries, of Stanford Research Institute (now SRI International) in the 1960s. The four-part analysis and definitions are:

Strengths: characteristics of your business that give it an advantage
Weaknesses: characteristics that place your company at a disadvantage
Opportunities: external chances to improve performance and profitability
Threats: external environmental factors that could degrade performance and performance.

Before we dive into SWOT, let’s address your strategic goals.


  • They’re very, very big.
  • They will take several years to achieve.
  • You won’t yet know the details of how to accomplish the goal when you set it.
  • The goal is specific enough that everyone will know if you achieve it.

Keep one eye focused on the short-term and one eye focused on the long-term. Short term is about projects related to improving the current core business, and meeting the needs of today’s target customers. Long term is reshaping the business to compete more effectively in the future. Your SWOT analysis must bridge both time frames and set the stage for the actions in the next or subsequent quarters. Your SWOT analysis should define your current reality so, let’s review each dimension.

List your top five strength. Your strengths are the assets or the competencies within your business that you can leverage. What is your number-one strength as a company? If you could identify one thing that you would say makes you strong, what would it be? What makes you uniquely different in your industry? Remember to assess your strengths in the context of your 3 to 5 Year Strategic Plan and capture them in short, concise, three to five word descriptive statements.

What are the biggest weaknesses in your business that could be fixed or improved within 12-months? Assess your weaknesses in the context of your 3 to 5 Year Strategic Plan and capture them in short, concise, three to five-word descriptive statements. If you could fix the five weaknesses that impact your business, prioritize that list. List everything that’s important, even if it’s something that you don’t want to admit or that makes you uncomfortable. Often these weaknesses affect sales, future revenues, cash flow, or profitability. Be brutally honest because everything that needs improvement for you to implement your 3 to 5 Year Strategic Plan must be listed here.

What opportunities can you pursue within the next 12 months? They should be aligned to your future strategic direction, your 3 to 5 Year Strategic Moves. What opportunities can you pursue that will move you in that direction? What can you do now that will position your company for future success? Again, use short, concise, three to five word descriptive statements and rank these in priority order. Remember that opportunities are outside your firm. What actions can you take to seize them, exploit them? Rank your top five in priority order.

What external threats do you need to reduce or closely monitor to ensure they do not derail your plans? If you have done a thorough industry analysis, you should have identified a number of different threats that could impact your industry or your firm. What are those things, ranked in priority order that you need to keep an eye on? Which ones should you mitigate, take some action to reduce or eliminate? List the top five threats ranked in order, using short, concise three to five word descriptive statements.
You should end up with four lists, one for each letter of your SWOT analysis.

Reality Checks
Use your SWOT analysis as the framework for deciding the important things you must do in the next quarter to move your company in the direction of your 3 to 5 Year Strategic Plan. Maybe it was cash flow, and you decided that was your number-one weakness. To address that, you might decide to implement some initiatives to reduce your total outstanding receivables and your Days Sales Outstanding over the next quarter.
If you succeed, that would change your reality. Your competition will be busy, too. A new threat may emerge in your industry. New opportunities can pop up, too. That’s why your SWOT analysis is never completely finished.

Review your SWOT analysis every 90 days and revise accordingly. That revised analysis becomes the basis for action in the next quarter. You will be more agile and effective, and achieve better results.

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James E. McClain is the author of Successful Career Development: A Game Plan, the book upon which some of our training programs are based. He has over 30 years' experience as a corporate HR executive, small business owner with ongoing experience in career development and as a college instructor. His educational background includes a B.S. and Masters degrees Education and Certification in Financial Planning. Our promise is that "you can pay more for training but you can not buy better training." The mission is to deliver the most effective and cost effective training and development programs.

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