is swot a problem solving technique

The SWOT Analysis in Problem-Solving

• Introduction to SWOT Analysis

In today’s rapidly evolving business environment, effective problem-solving techniques are essential for organizations seeking to gain a competitive edge. The SWOT Analysis tool, an acronym for Strengths, Weaknesses, Opportunities, and Threats, is a strategic planning method that can provide valuable insights into solving various business challenges.

This comprehensive guide will explore what SWOT Analysis is, why it is vital for problem-solving, who can benefit from its application, when and where to use it, and how to conduct a SWOT Analysis effectively.

What is SWOT Analysis?

Why use swot analysis for problem solving, who should use swot analysis for problem solving, when and where to use swot analysis for problem solving, how to perform swot analysis for problem solving.

SWOT Analysis is a powerful framework for evaluating the internal and external factors affecting an organization’s performance. By thoroughly examining strengths, weaknesses, opportunities, and threats, businesses can gain a holistic understanding of their current situation and make informed decisions. Let’s explore each component of SWOT Analysis in detail:

1. Strengths: These are the internal attributes and resources that give a company an advantage over its competitors. By identifying strengths, organizations can leverage them to confront challenges and seize opportunities.

Example: Imagine a tech startup specializing in mobile app development. Their strength lies in having a highly skilled and innovative development team that consistently produces top-notch applications. Leveraging this strength, they can address the problem of declining user engagement by enhancing their existing apps and offering cutting-edge features that rival companies cannot match.

2. Weaknesses: These are the internal limitations and areas for improvement within an organization. Recognizing weaknesses is crucial for effective problem-solving as it helps in allocating resources wisely and finding ways to overcome hurdles.

Example: Consider a retail chain with a weak online presence and outdated inventory management systems. By conducting a SWOT Analysis, they become aware of these weaknesses. To solve the problem of declining sales and improve customer experience, they invest in upgrading their e-commerce platform and implementing modern inventory management solutions.

3. Opportunities: These are external factors that can positively impact a business’s growth and performance. Identifying opportunities through SWOT Analysis allows organizations to capitalize on market trends, emerging technologies, or new customer segments.

Example: Suppose a renewable energy company performs a SWOT Analysis and discovers an increasing demand for solar power solutions due to the government’s push for sustainable energy sources. Recognizing this opportunity, they can invest in expanding their solar panel product range, targeting environmentally conscious consumers, and strengthening their market position.

4. Threats: These are external factors that can pose challenges or risks to an organization. Identifying potential threats helps businesses develop contingency plans and proactively address risks.

Example: Let’s say a hospitality chain conducts a SWOT Analysis and realizes that increasing competition from new market entrants poses a threat to their market share. To tackle this problem, they focus on enhancing customer loyalty through personalized experiences, offering unique amenities, and strengthening their brand reputation.

SWOT Analysis holds immense value as a problem-solving tool due to the following reasons:

• Holistic Assessment: SWOT Analysis provides a comprehensive evaluation of internal and external factors, enabling businesses to develop a well-rounded understanding of the problem at hand.
• Informed Decision Making: By highlighting strengths, weaknesses, opportunities, and threats, SWOT Analysis equips organizations with valuable insights to make informed decisions and formulate effective problem-solving strategies.
• Strategic Alignment: SWOT Analysis helps align problem-solving efforts with broader organizational goals and objectives, ensuring that solutions are congruent with the overall strategic direction.
• Competitive Advantage: By leveraging strengths, minimizing weaknesses, capitalizing on opportunities, and mitigating threats, organizations can attain a competitive edge in the market.

SWOT Analysis is a versatile tool applicable to a wide range of individuals and teams within an organization:

• Business Owners and Entrepreneurs: SWOT Analysis assists in evaluating the feasibility of new business ventures, identifying areas for improvement, and making strategic decisions.
• Project Managers: Project managers can employ SWOT Analysis to assess risks, identify project strengths and weaknesses, and exploit opportunities for success.
• Marketing Teams: SWOT Analysis aids marketing teams in understanding customer preferences, exploring market trends, and creating targeted marketing strategies.
• Product Managers: SWOT Analysis helps product managers evaluate product viability, identify competitive advantages, and prioritize feature development based on market demands.
• Executives and Managers: SWOT Analysis empowers executives and managers to evaluate their organizations’ position in the market, develop strategies, and optimize performance.

SWOT Analysis is a versatile tool that can be employed in various contexts:

• Strategic Planning: SWOT Analysis plays a fundamental role in strategic planning processes, allowing organizations to align their resources effectively and capitalize on opportunities.
• Market Entry: When entering a new market or launching a new product, SWOT Analysis provides valuable insights into the business landscape, competitor analysis, and potential challenges, enabling informed decision-making.
• Problem Diagnosis: SWOT Analysis helps organizations diagnose complex problems by examining the internal and external factors influencing the situation and identifying root causes.
• Performance Evaluation: Businesses can use SWOT Analysis to evaluate their ongoing performance by identifying areas of improvement, optimizing resources, and staying ahead of emerging threats.
• Business Transformation: SWOT Analysis is useful during times of business transformation or restructuring, as it facilitates a comprehensive evaluation of the organization’s current state and assists in formulating a roadmap for change.

To conduct a successful SWOT Analysis, follow these steps:

• Define the Objective: Identify the specific problem or objective that you want to address through the SWOT Analysis. This clarity will guide the rest of the process.

Example: In the case of a small restaurant chain, strengths could include a dedicated and well-trained staff, a unique dining concept, and high-quality ingredients. Weaknesses might include limited parking space, inconsistent customer service, and outdated POS systems.

Example: Continuing with the restaurant chain example, opportunities could include a growing demand for healthy and sustainable dining options, collaborations with local food festivals, or partnerships with delivery platforms. Threats might include new competitors entering the market, changing food safety regulations, or shifts in consumer preferences.

Example: Based on the SWOT Analysis, the restaurant chain may decide to revamp their customer service training programs to address weaknesses, introduce a new menu featuring sustainable and locally sourced ingredients to take advantage of opportunities, and implement a loyalty program to build customer retention and counter potential threats posed by new competitors.

• Implementation: Once strategies have been devised, it is essential to implement them effectively. This may involve detailed action plans, resource allocation, assigning responsibilities, and establishing performance metrics to monitor progress and ensure continuous improvement.

SWOT Analysis is a valuable tool for problem-solving in any organization. It provides a comprehensive evaluation of internal strengths and weaknesses, as well as external opportunities and threats, enabling organizations to make informed decisions and formulate effective strategies. Whether you are a business owner, project manager , marketer, or executive, integrating SWOT Analysis into your problem-solving toolkit empowers you to tackle challenges head-on and strive for success. Remember, SWOT Analysis is not limited to specific sectors or industries—it can be applied across various contexts to drive growth and maximize performance. Now, armed with the knowledge of SWOT Analysis, you are equipped to face any problem with confidence and strategic acumen.

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SWOT analysis: Examples and templates

A SWOT analysis helps you identify strengths, weaknesses, opportunities, and threats for a specific project or your overall business plan. It’s used for strategic planning and to stay ahead of market trends. Below, we describe each part of the SWOT framework and show you how to conduct your own.

Whether you’re looking for external opportunities or internal strengths, we’ll walk you through how to perform your own SWOT analysis, with helpful examples along the way. 

What is a SWOT analysis?

A SWOT analysis is a technique used to identify strengths, weaknesses, opportunities, and threats for your business or even a specific project. It’s most widely used by organizations—from small businesses and non-profits to large enterprises—but a SWOT analysis can be used for personal purposes as well. 

While simple, a SWOT analysis is a powerful tool for helping you identify competitive opportunities for improvement. It helps you improve your team and business while staying ahead of market trends.

What does SWOT stand for?

SWOT is an acronym that stands for: 

Opportunities

When analyzed together, the SWOT framework can paint a larger picture of where you are and how to get to the next step. Let’s dive a little deeper into each of these terms and how they can help identify areas of improvement. 

Strengths in SWOT refer to internal initiatives that are performing well. Examining these areas helps you understand what’s already working. You can then use the techniques that you know work—your strengths—in other areas that might need additional support, like improving your team’s efficiency . 

When looking into the strengths of your organization, ask yourself the following questions:

What do we do well? Or, even better: What do we do best?

What’s unique about our organization?

What does our target audience like about our organization?

Which categories or features beat out our competitors?

 Example SWOT strength:

Customer service: Our world-class customer service has an NPS score of 90 as compared to our competitors, who average an NPS score of 70.

Weaknesses in SWOT refer to internal initiatives that are underperforming. It’s a good idea to analyze your strengths before your weaknesses in order to create a baseline for success and failure. Identifying internal weaknesses provides a starting point for improving those projects.

Identify the company’s weaknesses by asking:

Which initiatives are underperforming and why?

What can be improved?

What resources could improve our performance?

How do we rank against our competitors?

Example SWOT weakness:

E-commerce visibility: Our website visibility is low because of a lack of marketing budget , leading to a decrease in mobile app transactions.

Opportunities in SWOT result from your existing strengths and weaknesses, along with any external initiatives that will put you in a stronger competitive position. These could be anything from weaknesses that you’d like to improve or areas that weren’t identified in the first two phases of your analysis. 

Since there are multiple ways to come up with opportunities, it’s helpful to consider these questions before getting started:

What resources can we use to improve weaknesses?

Are there market gaps in our services?

What are our business goals for the year?

What do your competitors offer?

Example SWOT opportunities:

Marketing campaign: To improve brand visibility, we’ll run ad campaigns on YouTube, Facebook, and Instagram.

Threats in SWOT are areas with the potential to cause problems. Different from weaknesses, threats are external and ‌out of your control. This can include anything from a global pandemic to a change in the competitive landscape. 

Here are a few questions to ask yourself to identify external threats:

What changes in the industry are cause for concern?

What new market trends are on the horizon?

Where are our competitors outperforming us?

Example SWOT threats:

New competitor: With a new e-commerce competitor set to launch within the next month, we could see a decline in customers.

SWOT analysis example

One of the most popular ways to create a SWOT analysis is through a SWOT matrix—a visual representation of strengths, weaknesses, opportunities, and threats. The matrix comprises four separate squares that create one larger square. 

A SWOT matrix is great for collecting information and documenting the questions and decision-making process . Not only will it be handy to reference later on, but it’s also great for visualizing any patterns that arise. 

Check out the SWOT matrix below for a simple example. As you can see, each of the quadrants lists out the company's strengths, weaknesses, opportunities, and threats.

When used correctly and effectively, your matrix can be a great toolkit for evaluating your organization’s strengths and weaknesses. 

How to do a SWOT analysis, with examples 

A SWOT analysis can be conducted in a variety of ways. Some teams like to meet and throw ideas on a whiteboard, while others prefer the structure of a SWOT matrix. However you choose to make your SWOT analysis, getting creative with your planning process allows new ideas to flow and results in more unique solutions. 

There are a few ways to ensure that your SWOT analysis is thorough and done correctly. Let’s take a closer look at some tips to help you get started.

Tip 1: Consider internal factors 

Often, strengths and weaknesses stem from internal processes. These tend to be easier to solve since you have more control over the outcome. When you come across internal factors, you can start implementing improvements in a couple of different ways.

Meet with department stakeholders to form a business plan around how to improve your current situation.

Research and implement new tools, such as a project management tool , that can help streamline these processes for you. 

Take immediate action on anything that can be changed in 24 hours or less. If you don’t have the capacity, consider delegating these items to others with deadlines. 

The way you go about solving internal factors will depend on the type of problem. If it’s more complex, you might need to use a combination of the above or a more thorough problem management process.

Tip 2: Evaluate external factors

External factors stem from processes outside of your control. This includes competitors, market trends, and anything else that’s affecting your organization from the outside in. 

External factors are trickier to solve, as you can’t directly control the outcome. What you can do is pivot your own processes in a way that mitigates negative external factors. 

You can work to solve these issues by:

Competing with market trends

Forecasting market trends before they happen

Improving adaptability to improve your reaction time

Track competitors using reporting tools that automatically update you as soon as changes occur 

While you won’t be able to control an external environment, you can control how your organization reacts to it. 

Let’s say, for instance, that you’re looking to compete with a market trend. For example, a competitor introduced a new product to the market that’s outperforming your own. While you can’t take that product away, you can work to launch an even better product or marketing campaign to mitigate any decline in sales. 

Tip 3: Hold a brainstorming session

Brainstorming new and innovative ideas can help to spur creativity and inspire action. To host a high impact brainstorming session, you’ll want to: 

Invite team members from various departments. That way, ideas from each part of the company are represented. 

Be intentional about the number of team members you invite, since too many participants could lead to a lack of focus or participation. The sweet spot for a productive brainstorming session is around 10 teammates. 

Use different brainstorming techniques that appeal to different work types.

Set a clear intention for the session.

Tip 4: Get creative

In order to generate creative ideas, you have to first invite them. That means creating fun ways to come up with opportunities. Try randomly selecting anonymous ideas, talking through obviously bad examples, or playing team building games to psych up the team.

Tip 5: Prioritize opportunities

Now, rank the opportunities. This can be done as a team or with a smaller group of leaders. Talk through each idea and rank it on a scale of one through 10. Once you’ve agreed on your top ideas based on team capabilities, competencies, and overall impact, it’s easier to implement them.

Tip 6: Take action

It’s all too easy to feel finished at this stage —but the actual work is just beginning. After your SWOT analysis, you’ll have a list of prioritized opportunities. Now is the time to turn them into strengths. Use a structured system such as a business case , project plan, or implementation plan to outline what needs to get done—and how you plan to do it.

SWOT analysis template

A SWOT analysis template is often presented in a grid format, divided into four quadrants. Each quadrant represents one of the four elements. 

Use this free SWOT analysis template to jump-start your team’s strategic planning.

Identify the strengths that contribute to achieving your objectives. These are internal characteristics that give you an advantage. Some examples could be a strong brand reputation, an innovative culture, or an experienced management team.

Next, focus on weaknesses. These are internal factors that could serve as obstacles to achieving your objectives. Common examples might include a lack of financial resources, high operational costs, or outdated technology. 

Move on to the opportunities. These are external conditions that could be helpful in achieving your goals. For example, you might be looking at emerging markets, increased demand, or favorable shifts in regulations.

Lastly, let's address threats. These are external conditions that could negatively impact your objectives. Examples include increased competition or potential economic downturns.

Why is a SWOT analysis important?

A SWOT analysis can help you improve processes and plan for growth. While similar to a competitive analysis , it differs because it evaluates both internal and external factors. Analyzing key areas around these opportunities and threats will equip you with the insights needed to set your team up for success.

A SWOT analysis isn’t only useful for organizations. With a personal SWOT analysis, you can examine areas of your life that could benefit from improvement, from your leadership style to your communication skills. These are the benefits of using a SWOT analysis in any scenario. 

1. Identifies areas of opportunity

One of the biggest benefits of conducting an analysis is to determine opportunities for growth. It’s a great starting point for startups and teams that know they want to improve but aren’t exactly sure how to get started. 

Opportunities can come from many different avenues, like external factors such as diversifying your products for competitive advantage or internal factors like improving your team’s workflow . Either way, capitalizing on opportunities is an excellent way to grow as a team.

2. Identifies areas that could be improved

Identifying weaknesses and threats during a SWOT analysis can pave the way for a better business strategy.

Ultimately, learning from your mistakes is the best way to excel. Once you find areas to streamline, you can work with team members to brainstorm an action plan . This will let you use what you already know works and build on your company’s strengths.

3. Identifies areas that could be at risk

Whether you have a risk register in place or not, it’s always crucial to identify risks before they become a cause for concern. A SWOT analysis can help you stay on top of actionable items that may play a part in your risk decision-making process. 

It may be beneficial to pair your SWOT analysis with a PEST analysis, which examines external solutions such as political, economic, social, and technological factors—all of which can help you identify and plan for project risks .

When should you use a SWOT analysis?

You won’t always need an in-depth SWOT analysis. It’s most useful for large, general overviews of situations, scenarios, or your business.

A SWOT analysis is most helpful:

Before you implement a large change—including as part of a larger change management plan

When you launch a new company initiative

If you’d like to identify opportunities for growth and improvement

Any time you want a full overview of your business performance

If you need to identify business performance from different perspectives

SWOT analyses are general for a reason—so they can be applied to almost any scenario, project, or business. 

SWOT analysis: Pros and cons

Although SWOT is a useful strategic planning tool for businesses and individuals alike, it does have limitations. Here’s what you can expect.

The simplicity of SWOT analysis makes it a go-to tool for many. Because it is simple, it takes the mystery out of strategic planning and lets people think critically about their situations without feeling overwhelmed. 

For instance, a small bakery looking to expand its operations can use SWOT analysis to easily understand its current standing. Identifying strengths like a loyal customer base, weaknesses such as limited seating space, opportunities like a rising trend in artisanal baked goods, and threats from larger chain bakeries nearby can all be accomplished without any specialized knowledge or technical expertise.

Versatility

Its versatile nature allows SWOT analysis to be used across various domains. Whether it’s a business strategizing for the future or an individual planning their career path, SWOT analysis lends itself well. 

For example, a tech start-up in the competitive Silicon Valley landscape could employ SWOT to navigate its pathway to profitability. Strengths might include a highly skilled development team; weaknesses could be a lack of brand recognition; opportunities might lie in emerging markets; and threats could include established tech giants. 

Meaningful analysis

SWOT excels in identifying external factors that could impact performance. It nudges organizations to look beyond the present and anticipate potential future scenarios. 

A retail company, for example, could use SWOT analysis to identify opportunities in e-commerce and threats from changing consumer behavior or new competitors entering the market. By doing so, the company can strategize on how to leverage online platforms to boost sales and counteract threats by enhancing the customer experience or adopting new technologies.

Subjectivity and bias

The subjective nature of SWOT analysis may lead to biases. It relies heavily on individual perceptions, which can sometimes overlook crucial data or misinterpret information, leading to skewed conclusions. 

For example, a manufacturing company might undervalue the threat of new entrants in the market due to an overconfidence bias among the management. This subjectivity might lead to a lack of preparation for competitive pricing strategies, ultimately affecting the company's market share.

Lack of prioritization

SWOT analysis lays out issues but falls short on prioritizing them. Organizations might struggle to identify which elements deserve immediate attention and resources. 

For instance, a healthcare provider identifying numerous opportunities for expansion into new services may become overwhelmed with the choices. Without a clear way to rank these opportunities, resources could be spread too thinly or given to projects that do not have as much of an impact, leading to less-than-ideal outcomes.

Static analysis

Since SWOT analysis captures a snapshot at a particular moment, it may miss the evolving nature of challenges and opportunities, possibly leading to outdated strategies. An example could be a traditional retail business that performs a SWOT analysis and decides to focus on expanding physical stores, overlooking the growing trend of e-commerce. As online shopping continues to evolve and gain popularity, the static analysis might lead to investment in areas with diminishing returns while missing out on the booming e-commerce market trend.

SWOT analysis FAQ

What are the five elements of swot analysis.

Traditionally, SWOT stands for its four main elements: strengths, weaknesses, opportunities, and threats. However, a fifth essential element often overlooked is "actionable strategies." Originally developed by Albert Humphrey, SWOT is more than just a list—it's a planning tool designed to generate actionable strategies for making informed business decisions. This fifth element serves to tie the other four together, enabling departments like human resources and marketing to turn analysis into actionable plans.

What should a SWOT analysis include?

A comprehensive SWOT analysis should focus on the internal and external factors that affect your organization. Internally, consider your strong brand and product line as your strengths, and maybe your supply chain weaknesses. Externally, you'll want to look at market share, partnerships, and new technologies that could either pose opportunities or threats. You should also account for demographics, as it helps in market targeting and segmentation.

How do you write a good SWOT analysis?

Writing an effective SWOT analysis begins with research. Start by identifying your strengths, like a strong brand, and your weaknesses, like a small human resources department. Following that, look outward to find opportunities, possibly in technological advancement, and threats, like fluctuations in market share. Many businesses find it helpful to use a free SWOT analysis template to structure this information. A good SWOT analysis doesn't just list these elements; it integrates them to provide a clear roadmap for making business decisions.

What are four examples of threats in SWOT analysis?

New technologies: Rapid technological advancement can make your product or service obsolete.

Supply chain disruptions: Whether due to natural disasters or geopolitical tensions, an unstable supply chain can seriously jeopardize your operations.

Emerging competitors: New players entering the market can erode your market share and offer alternative solutions to your customer base.

Regulatory changes: New laws or regulations can add costs and complexity to your business, affecting your competitiveness.

How do you use a SWOT analysis?

Once you've completed a SWOT analysis, use the results as a decision-making aid. It can help prioritize actions, develop strategic plans that play to your strengths, improve weaknesses, seize opportunities, and counteract threats. It’s a useful tool for setting objectives and creating a roadmap for achieving them.

Plan for growth with a SWOT analysis

A SWOT analysis can be an effective technique for identifying key strengths, weaknesses, opportunities, and threats. Understanding where you are now can be the most impactful way to determine where you want to go next. 

Don’t forget, a bit of creativity and collaboration can go a long way. Encourage your team to think outside of the box with 100+ team motivational quotes .

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Article • 17 min read

SWOT Analysis

Understanding your business, informing your strategy.

By the Mind Tools Content Team

Key Takeaways:

SWOT stands for S trengths, W eaknesses, O pportunities, and T hreats.

A "SWOT analysis" involves carefully assessing these four factors in order to make clear and effective plans.

A SWOT analysis can help you to challenge risky assumptions, uncover dangerous blindspots, and reveal important new insights.

The SWOT analysis process is most effective when done collaboratively.

What Is a SWOT Analysis?

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats, and so a SWOT analysis is a technique for assessing these four aspects of your business.

SWOT Analysis is a tool that can help you to analyze what your company does best now, and to devise a successful strategy for the future. SWOT can also uncover areas of the business that are holding you back, or that your competitors could exploit if you don't protect yourself.

A SWOT analysis examines both internal and external factors – that is, what's going on inside and outside your organization. So some of these factors will be within your control and some will not. In either case, the wisest action you can take in response will become clearer once you've discovered, recorded and analyzed as many factors as you can.

In this article, video and infographic, we explore how to carry out a SWOT analysis, and how to put your findings into action. We also include a worked example and a template to help you get started on a SWOT analysis in your own workplace.

Why Is SWOT Analysis Important?

SWOT analysis can help you to challenge risky assumptions and to uncover dangerous blindspots about your organization's performance. If you use it carefully and collaboratively, it can deliver new insights on where your business currently is, and help you to develop exactly the right strategy for any situation.

For example, you may be well aware of some of your organization's strengths, but until you record them alongside weaknesses and threats you might not realize how unreliable those strengths actually are.

Equally, you likely have reasonable concerns about some of your business weaknesses but, by going through the analysis systematically, you could find an opportunity, previously overlooked, that could more than compensate.

How to Write a SWOT Analysis

SWOT analysis involves making lists – but so much more, too! When you begin to write one list (say, Strengths), the thought process and research that you'll go through will prompt ideas for the other lists (Weaknesses, Opportunities or Threats). And if you compare these lists side by side, you will likely notice connections and contradictions, which you'll want to highlight and explore.

You'll find yourself moving back and forth between your lists frequently. So, make the task easier and more effective by arranging your four lists together in one view.

A SWOT matrix is a 2x2 grid, with one square for each of the four aspects of SWOT. (Figure 1 shows what it should look like.) Each section is headed by some questions to get your thinking started.

Figure 1. A SWOT Analysis Matrix.

Swot analysis template.

When conducting your SWOT analysis, you can either draw your own matrix, or use our free downloadable template .

How to Do a SWOT Analysis

Avoid relying on your own, partial understanding of your organization. Your assumptions could be wrong. Instead, gather a team of people from a range of functions and levels to build a broad and insightful list of observations.

Then, every time you identify a Strength, Weakness, Opportunity, or Threat, write it down in the relevant part of the SWOT analysis grid for all to see.

Let's look at each area in more detail and consider what fits where, and what questions you could ask as part of your data gathering.

Strengths are things that your organization does particularly well, or in a way that distinguishes you from your competitors. Think about the advantages your organization has over other organizations. These might be the motivation of your staff, access to certain materials, or a strong set of manufacturing processes.

Your strengths are an integral part of your organization, so think about what makes it "tick." What do you do better than anyone else? What values drive your business? What unique or lowest-cost resources can you draw upon that others can't? Identify and analyze your organization's Unique Selling Proposition (USP), and add this to the Strengths section.

Then turn your perspective around and ask yourself what your competitors might see as your strengths. What factors mean that you get the sale ahead of them?

Remember, any aspect of your organization is only a strength if it brings you a clear advantage. For example, if all of your competitors provide high-quality products, then a high-quality production process is not a strength in your market: it's a necessity.

Weaknesses, like strengths, are inherent features of your organization, so focus on your people, resources, systems, and procedures. Think about what you could improve, and the sorts of practices you should avoid.

Once again, imagine (or find out) how other people in your market see you. Do they notice weaknesses that you tend to be blind to? Take time to examine how and why your competitors are doing better than you. What are you lacking?

Be honest! A SWOT analysis will only be valuable if you gather all the information you need. So, it's best to be realistic now, and face any unpleasant truths as soon as possible.

Opportunities

Opportunities are openings or chances for something positive to happen, but you'll need to claim them for yourself!

They usually arise from situations outside your organization, and require an eye to what might happen in the future. They might arise as developments in the market you serve, or in the technology you use. Being able to spot and exploit opportunities can make a huge difference to your organization's ability to compete and take the lead in your market.

Think about good opportunities that you can exploit immediately. These don't need to be game-changers: even small advantages can increase your organization's competitiveness. What interesting market trends are you aware of, large or small, which could have an impact?

You should also watch out for changes in government policy related to your field. And changes in social patterns, population profiles, and lifestyles can all throw up interesting opportunities.

Threats include anything that can negatively affect your business from the outside, such as supply-chain problems, shifts in market requirements, or a shortage of recruits. It's vital to anticipate threats and to take action against them before you become a victim of them and your growth stalls.

Think about the obstacles you face in getting your product to market and selling. You may notice that quality standards or specifications for your products are changing, and that you'll need to change those products if you're to stay in the lead. Evolving technology is an ever-present threat, as well as an opportunity!

Always consider what your competitors are doing, and whether you should be changing your organization's emphasis to meet the challenge. But remember that what they're doing might not be the right thing for you to do. So, avoid copying them without knowing how it will improve your position.

Be sure to explore whether your organization is especially exposed to external challenges. Do you have bad debt or cash-flow problems, for example, that could make you vulnerable to even small changes in your market? This is the kind of threat that can seriously damage your business, so be alert.

Use PEST Analysis to ensure that you don't overlook threatening external factors. And PMESII-PT is an especially helpful check in very unfamiliar or uncertain environments.

A SWOT Analysis Example

Imagine this scenario: a small start-up consultancy wants a clear picture of its current situation, to decide on a future strategy for growth. The team gathers, and draws up the SWOT Analysis shown in Figure 2.

Figure 2. A Completed SWOT Analysis.

As a result of the team's analysis, it's clear that the consultancy's main strengths lie in its agility, technical expertise, and low overheads. These allow it to offer excellent customer service to a relatively small client base.

The company's weaknesses are also to do with its size. It will need to invest in training, to improve the skills base of the small staff. It'll also need to focus on retention, so it doesn't lose key team members.

There are opportunities in offering rapid-response, good-value services to local businesses and to local government organizations. The company can likely be first to market with new products and services, given that its competitors are slow adopters.

The threats require the consultancy to keep up-to-date with changes in technology. It also needs to keep a close eye on its largest competitors, given its vulnerability to large-scale changes in its market. To counteract this, the business needs to focus its marketing on selected industry websites, to get the greatest possible market presence on a small advertising budget.

Frequently Asked Questions About SWOT Analysis

1. who invented swot analysis.

Many people attribute SWOT Analysis to Albert S. Humphrey. However, there has been some debate on the originator of the tool, as discussed in the International Journal of Business Research .

2. What Does SWOT Analysis Stand For?

SWOT Analysis stands for Strengths, Weaknesses, Opportunities and Threats.

3. What Can a SWOT Analysis Be Used For?

SWOT analysis is a useful tool to help you determine your organization's position in the market. You can then use this information to create an informed strategy suited to your needs and capabilities.

4. How Do I Write a SWOT Analysis?

To conduct a SWOT analysis, you first need to create a 2x2 matrix grid. Each square is then assigned to one of the four aspects of SWOT. You can either draw this grid yourself or use our downloadable template to get started.

5. How Do SWOT Analysis and the TOWS Matrix compare?

While SWOT analysis puts the emphasis on the internal environment (your strengths and weaknesses), TOWS forces you to look at your external environment first (your threats and opportunities). In most cases, you'll do a SWOT Analysis first, and follow up with a TOWS Matrix to offer a broader context.

6. What Are the Biggest SWOT Analysis Mistakes?

• Making your lists too long. Ask yourself if your ideas are feasible as you go along.
• Being vague. Be specific to provide more focus for later discussions.
• Not seeing weaknesses. Be sure to ask customers and colleagues what they experience in real life.
• Not thinking ahead. It's easy to come up with nice ideas without taking them through to their logical conclusion. Always consider their practical impact.
• Being unrealistic. Don't plan in detail for opportunities that don't exist yet. For example, that export market you've been eyeing may be available at some point, but the trade negotiations to open it up could take years.
• Relying on SWOT Analysis alone. SWOT Analysis is valuable. But when you use it alongside other planning tools (SOAR, TOWS or PEST), the results will be more vigorous.

How to Use a SWOT Analysis

Use a SWOT Analysis to assess your organization's current position before you decide on any new strategy. Find out what's working well, and what's not so good. Ask yourself where you want to go, how you might get there – and what might get in your way.

Once you've examined all four aspects of SWOT, you'll want to build on your strengths, boost your weaker areas, head off any threats, and exploit every opportunity. In fact, you'll likely be faced with a long list of potential actions.

But before you go ahead, be sure to develop your ideas further. Look for potential connections between the quadrants of your matrix. For example, could you use some of your strengths to open up further opportunities? And, would even more opportunities become available by eliminating some of your weaknesses?

Finally, it's time to ruthlessly prune and prioritize your ideas, so that you can focus time and money on the most significant and impactful ones. Refine each point to make your comparisons clearer. For example, only accept precise, verifiable statements such as, "Cost advantage of $30/ton in sourcing raw material x," rather than, "Better value for money."

Remember to apply your learnings at the right level in your organization. For example, at a product or product-line level, rather than at the much vaguer whole-company level. And use your SWOT analysis alongside other strategy tools (for example, Core Competencies Analysis ), so that you get a comprehensive picture of the situation you're dealing with.

SWOT Analysis Tips

Here are four tips for getting more out of a SWOT analysis:

• Be specific. The more focused and accurate you are about the points you write down, the more useful your SWOT analysis will be.
• Work backwards. Experiment with filling in the four sections of your SWOT analysis in a different order, to stimulate new ways of thinking. Working backwards, in particular, from threats to strengths, may cast new light on the situation.
• Get together. Highlight the most useful people to contribute to your SWOT analysis, then gather information and ideas from them all.
• SWOT your competition ! To stay ahead of your competitors, carry out a regular SWOT analysis on them . Use everything you know about them to evaluate their situation, and use SWOT analysis to plan your competitive strategies accordingly.

It's also possible to carry out a Personal SWOT Analysis . This can be useful for developing your career in ways that take best advantage of your talents, abilities and opportunities.

SWOT Analysis Infographic

See SWOT Analysis represented in our infographic :

SWOT Analysis helps you to identify your organization's Strengths, Weaknesses, Opportunities, and Threats.

It guides you to build on what you do well, address what you're lacking, seize new openings, and minimize risks.

Apply a SWOT Analysis to assess your organization's position before you decide on any new strategy.

Use a SWOT matrix to prompt your research and to record your ideas. Avoid making huge lists of suggestions. Be as specific as you can, and be honest about your weaknesses.

Be realistic and rigorous. Prune and prioritize your ideas, to focus time and money on the most significant and impactful actions and solutions. Complement your use of SWOT with other tools.

Collaborate with a team of people from across the business. This will help to uncover a more accurate and honest picture.

Find out what's working well, and what's not so good. Ask yourself where you want to go, how you might get there – and what might get in your way.

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SWOT is useless. When you try it and you find Weaknesses box bulging, but Strengths & Opportunities completely empty, what can that possibly achieve?

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What Is a SWOT Analysis?

SWOT analysis stands for strengths, weaknesses, opportunities and threats. This exercise helps teams develop strategic plans for innovation and investment.

A SWOT (strengths, weaknesses, opportunities, threats) analysis is a visual framework used for strategic planning across all types of businesses and organizations. SWOT analyses are made up of four components that will help you determine the output of your team’s analysis.

What Does SWOT Analysis Stand For?

Opportunities, how do i do a swot analysis.

A SWOT analysis is a qualitative assessment of a company’s SWOT components. Individuals responsible for the assessment fill out a visual template similar to the figure above, which is usually laid out in a two-by-two matrix. This template helps visualize all the SWOT elements together in their entirety.

To understand in more detail the elements of this template, let’s dive into each component individually.

More From Built In Experts How Competitive Analysis Helps You Shine Over Your Rivals

What Are the 4 Components of a SWOT Analysis?

Your strengths are organizational features that provide a competitive and strategic advantage relative to the market and competition.

Weaknesses  

Your weaknesses include organizational features that are lacking relative to market competition, or that hinder the organization’s overall effectiveness to compete, grow, and strive for optimal business performance.

These are favorable market conditions or external developments that represent an opportunity for unlocking or improving the organization’s competitive positioning and business performance. Opportunities can be related to present market conditions, but can also be forward-looking.

These are unfavorable market conditions or external developments that pose a risk to the organization’s performance or the entire viability of the current market. Threats can be related to present market conditions, but can also be forward-looking. (e.g. near-term competitive threats or geopolitical risks would be good examples to feature in this bucket)

• Strengths and weaknesses are factors that are owned (and thus controlled) by the organization. As a result, the organization and its team can directly influence strengths and weaknesses.  
• Opportunities and threats are factors that cannot be controlled by the organization. For example, a near-term innovation trend or advantageous legal ruling that may come into play are considered opportunities, whereas near-term competitive innovation or geopolitical risks fall within the threats bucket. In either instance, your organization may prepare for these events, but it cannot control them. 

During the process of filling in this template, you’ll consider all four elements individually. Once you complete the template, through brainstorming sessions and workshops, you can start putting together an actionable plan to capitalize on your strengths and opportunities while countering your weaknesses and threats. 

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SWOT Analysis Example 

Let’s take, for example, a smartphone-producing company in the technology industry. Your example SWOT table may include the following.

Strengths :

• Strong brand positioning
• Loyal customer base
• High barriers to entry for the competition due to recent patent filings

Weaknesses:

• Recently departed CEO who led the company for the previous 15 years
• Production bottlenecks in key geographical regions
• Leaked PR documents

Opportunities:

• Customer trends indicating a shift towards higher-end smartphones in emerging markets
• Weakened competition due to a key competitor recently filing for bankruptcy
• Increased regulatory scrutiny
• Global chip shortage

As a result and potential plan of action, the company in question may decide to focus on mitigating the risks caused by its weaknesses (for example by increasing production in key regions close to the ones suffering bottlenecks in addition to selecting an experienced interim CEO as soon as possible) while seizing market opportunities that may not come about again (i.e. gaining market share in the short term by exploiting the competitor’s bankruptcy).

Overall, resource allocation should flow to:

• Seizing market opportunities
• Developing mitigation plans for market threats and investing in limiting potential damage or performance slowdowns caused by internal weaknesses

Why Use a SWOT Analysis?

The results of a SWOT analysis inform your company’s strategic plan and help you make decisions about how to allocate future resources.  As a result of a SWOT analysis your team might decide on the following:

• investment/divestments related to a given product line
• international market entry or market expansions
• changes to the company’s position relative to its competition (based on factors such as price, target customers and barriers to entry among others)
• adjustments to external macroeconomic trends (raise in interest rates) or market-related dynamics (global supply chain constraints)

SWOT Analysis Advantages and Disadvantages

The SWOT analysis as a framework for strategic planning has received its fair share of critique and scrutiny. Let’s review some of the pros and cons.

SWOT Analysis Advantages

• 10,000-Foot View : A SWOT allows you to consider multiple factors that you might not normally associate together all at once (departing CEO and macro-trends, for example). This process can invite management to identify creative solutions to company issues that may have previously been hard to identify; having this combination of different sources of data, from internal balance-sheet metrics to market data points to press releases may enable your organization to find more comprehensive and representative patterns.
• Cross-Team Collaboration : SWOT analyses create space for the representation of multiple viewpoints within the organization. The exercise invites people from different departments of the organization to contribute and collaborate across departments, thereby enriching the overall quality of the SWOT analysis and enabling better communication across company silos.
• Simplicity: A SWOT is a simple framework that allows you to consider and break down complex problems that are usually considered and tackled separately but without a link to the bigger picture offered by a SWOT exercise.
• Simultaneous Consideration of Internal and External Factors : A SWOT allows us to relate internal factors with external factors, which is important since these two sides are usually considered separately from one another and only more broadly considered at the executive level. For this reason, conducting a SWOT exercise at the department level allows internal teams to understand how external forces influence and relate to their day-to-day operations.

More on Group and Organizational Analyses 7 Ways to Use Mind Mapping in Your Work

SWOT Analysis Disadvantages

• Groupthink and Bias: The generation of a SWOT chart is heavily influenced by the individuals tasked with the exercise. If the group isn’t diverse or made up of representatives from around the organization, the analysis will result in biased outcomes and lopsided strategies.
• Short Shelf Life : A SWOT analysis is a spot exercise, which means we typically perform them as a one-off planning effort. In fast-changing markets, its results (and, thus, its overall relevance) can go out of date quickly.
• Research shows a weak link between the SWOT exercise and actual strategic decision-making and organization follow-through. As a result, we’ve seen alternative frameworks emerge, most notably Porter's five forces analysis .

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A SWOT analysis can help a small business owner or business assess a company’s position to determine the most optimal strategy going forward. This business practice can help you identify what you’re doing well, what you want to do better, and what kinds of obstacles you might encounter along the way.

This guide will walk you through everything you need to know about a SWOT analysis: what it is, how it works, and how to do it. We’ll also include an example and a template to help guide you as you perform your own SWOT analysis.

What Is a SWOT Analysis?

A SWOT analysis is a strategic planning technique that outlines an organization’s strengths, weaknesses, opportunities, and threats. Assessing business competition in this way can help an organization plan strategically and execute more effectively.

The 4 Parts of a SWOT Analysis

Your business’s strengths SWOT section should include anything that your business does differently or better than competitors. Think about your unique value proposition, trends you’ve noticed in positive customer feedback, operational strengths, and company culture. This section is the perfect place to name and celebrate anything you’re already doing well.

Don’t be afraid to toot your own horn (while also remaining objective). Clearly identifying your business’s strengths not only helps you keep your spirits balanced as you address your weaknesses, it will also give you a sense of where to concentrate your resources. It’s easier to build a successful business when you’re working towards something, rather than acting in opposition.

Questions to help you determine your strengths:

• What is your business’s unique value proposition?
• What common compliments do you receive from your customers?
• What does your business do particularly well?
• How do you operate differently from your competitors?
• What gives you an edge on the competition ? (This can include something product-related like “better access to raw materials” or “lower cost of goods,” or it can be an internal strength like “strong company culture” or “employee motivation.”)
• What might your competitors name as your strengths?

Your weaknesses are the areas in which the business has room for improvement. You should include structural weaknesses in this section—those that relate to your systems, procedures, resources, and personnel. This is a great place to look at common feedback from employees (either from exit interviews, anonymous surveys, or other sources) and recurring customer complaints.

Questions to help you determine your weaknesses:

• What areas of your business could stand to improve?
• What are common hiccups in your customer experience ?
• How do you use your resources? Is there room for improvement?
• What improvements are needed in your employee experience?
• What weaknesses might your customers see that you tend to overlook?
• What weaknesses might your competitors think you have?

Opportunities

Your opportunities are the positive, external factors that your business might benefit from… but cannot directly control. That might include market opportunities, consumer purchasing trends, legal or regulatory changes, population changes, the cost of raw materials, and more. For example, businesses that provide accessibility for aging seniors might recognize the forthcoming “silver tsunami” of Baby Boomers entering the target demographic. This would be a clear opportunity to expand their customer base.

Questions to help you determine your opportunities:

• What trends might affect your industry?
• How might the right talent create new opportunities?
• your customers ask for anything you don’t offer (but could)?
• How might population changes affect your business opportunities? (think: generational shifts)
• Is there a need in the industry that you’re not creating, but could?
• Do your competitors have any weaknesses that could be opportunities for you?
• Is there a way to repackage current products to demand a higher price?
• Are there any new, or potential, regulatory or tax changes that might provide a new opportunity?

Your threats are the external factors that have the potential to negatively affect your business. A threat can be specific and competitor-based or more structural. buy clomid online buy clomid online no prescription Examples of structural threats could be supply chain challenges, shifts in market requirements, talent shortages, or changes to social media algorithms (especially if your business heavily relies on social media marketing). You might also face a threat (or threats) from your competitors. This can include the way they operate, how they’re marketing, or the products they offer.

Identifying every external threat your business faces is essential for your business to identify how it must adapt in order to meet and overcome these challenges.

Questions to help you determine threats:

• What happens if a supplier or manufacturer runs out of materials you use?
• What if a natural disaster (like a pandemic) strikes? buy amitriptyline online buy amitriptyline online no prescription
• Is your market shrinking?
• What are your competitors offering? Are they expanding or offering different products?
• How are your competitors marketing?
• What technological threats are you vulnerable to (website security, social media algorithm changes)?
• Are there any businesses that aren’t competitors now but could become competitors in the future?

The Benefits of a SWOT Analysis

SWOT analyses offer a variety of benefits for businesses and personal brands. Here are some of the most common benefits of a SWOT analysis:

• You can use it to determine a strategic plan.
• You can use it to drive an innovative, informed marketing plan.
• It can help you identify external opportunities.
• It can help you identify external threats.
• It can reveal environmental factors that might affect your business, either positively or negatively.
• You can develop a plan for how to tackle internal weaknesses.

How to Do a SWOT Analysis

You can approach SWOT analyses in multiple ways. You can conduct a personal SWOT analysis for yourself as an individual, you can perform a marketing SWOT analysis to determine a competitive advantage in your marketing , or you can use a SWOT analysis as a part of broader strategic planning.

Whatever your end goal for a SWOT analysis, follow these steps.

1. Create a SWOT Matrix

Use a SWOT template or create your own. You can create your SWOT framework on the computer or on a whiteboard—if you choose to do the latter, be sure that someone is in charge of recording the responses so that you don’t lose key insights (you can also take a picture at the end of the SWOT session).

2. Assemble Key Stakeholders

A SWOT analysis is most effective when it collects a variety of perspectives. Gathering key stakeholders with various perspectives will help you see more than you would have seen alone. Marketing leaders might be able to give you a more specific sense of the opportunities and threats related to your content marketing efforts. Your people team is closest to all personnel changes and feedback, so they’ll have the clearest sense of an organization’s strengths and what is driving employee retention (or challenging it). Sales leaders can help translate opportunities into a cohesive business strategy.

It’s simple: when it comes to a SWOT analysis, more heads are better than one.

3. Brainstorm Around Your Companies’ Strengths, Weaknesses, Opportunities, and Threats

Go through each field of the SWOT diagram, spending some time with each one. Ask the group the guiding questions to ensure you’re developing a comprehensive picture of the internal and external environment. There are no bad ideas in brainstorming. You’re just trying to get thoughts flowing. Something that feels like a “bad idea” might lead to discovering a potential threat you’d never thought of before or nuanced analysis of how you stack up to your nearest competitor. The key here is to keep the brainstorm going.

4. Record Relevant Thoughts in Their Respective Sections

As you brainstorm, record points and ideas when they are relevant. At the end of the session, your SWOT analysis should leave you with a clear sense of the organization’s strengths and company’s weaknesses that you can use to guide your strategy formulation.

5. Edit Your List

Revisit the SWOT diagram at a later time and edit it, culling out anything you don’t really need. You can also polish up some of the key insights gleaned in the brainstorming session. This is especially important if you plan to use your SWOT analysis as a more formal document that might be disseminated broadly.

6. Create a More Formal Version (Optional)

The final step, if you choose to do it, is to take your SWOT takeaways and put them together in a polished document that you can share.

A SWOT Analysis Example

It can be easier to understand how to approach a SWOT analysis if you’ve seen a SWOT analysis example. For the sake of this example, we will imagine a hypothetical company and what its SWOT analysis might look like.

The Business

An Instagram-friendly fitness business offering virtual workouts.

• The business is not limited to a specific geographic area.
• The company offers great benefits so employees tend to stay.
• Workouts look really good, so they market well on social media (particularly Instagram).
• The app experience can be glitchy.
• High customer churn rate.
• Competitors let you filter classes by the instructor. Ours doesn’t offer that.
• There is growing interest in our type of workout.
• As a result of the pandemic, consumers are more interested in at-home workouts.
• We could start offering retail products and branded workout equipment like our competitors do.
• Our app is vulnerable to hacking.
• If Instagram changes its algorithm, we may become wholly dependent on paid ads instead of organic posts.

A SWOT Analysis Template

Use this template to create your own SWOT analysis.

Strengths Section: What Your Company Does Well

Weaknesses section: what your company could improve, opportunities section: external factors you could use to your advantage, threats section: external factors that could harm your business, owning the hard truths of a swot analysis.

A SWOT analysis can bring up a lot of hard truths. It’s difficult to confront your company’s weaknesses and sometimes looking at threats can make them feel like the existential kind. Overcome these obstacles and give yourself the fortitude to confront business challenges head on with the Mental Toughness mini-course. The best part? It’s free.

About Mary Kate Miller

Mary Kate Miller writes about small business, real estate, and finance. In addition to writing for Foundr, her work has been published by The Washington Post, Teen Vogue, Bustle, and more. She lives in Chicago.

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SWOT and Problem-based Analysis

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How to Do a SWOT Analysis

How to write a strategic analysis for business organizations, swot analysis vs. gap analysis.

• Drawbacks of a SWOT Analysis
• Alternatives to SWOT Analysis

SWOT is a technique for developing a business strategy by studying your company's strengths, weaknesses, opportunities and strengths. SWOT gives you a fresh perspective on what your company does best and where you have the greatest potential to grow your business. You can also use SWOT to analyze a particular business problem and find a solution.

In a SWOT analysis session, you look at your company's internal and external situation. Strengths and weaknesses are internal analyses of what your company does well and the ways in which performs poorly. Threats and opportunities are external, a list of the challenges and opportunities facing your business. To gain real understanding, make your SWOT items precise: "Sales lag behind industry average" is a better analysis than "sales could be better."

Problem-based Analysis

You can use SWOT discussions as the basis for a brainstorming session about where to take your company next. If you have a particular problem you're concerned with, focus SWOT analysis directly on the issue. Whether the problem is a corporate weakness, the threat from a new competitor or an opportunity you don't know how to exploit, SWOT analysis places the problem in the context of your overall strengths and vulnerabilities.

One way to apply SWOT to a problem is to draw up a four-square grid: Two squares list strengths along with opportunities and threats and the other two list weaknesses with threats and opportunities. If the problem you're analyzing is a threat, such as a new competitor, the grid shows which of your weaknesses -- slow growth, or an inexperienced sales force -- make you vulnerable to the threat. The grid also helps you see which of your strengths is best suited to fend off the threat.

Limitations

The biggest drawback to using SWOT is that it doesn't help you identify strengths, weaknesses, threats and opportunities: If you don't know about defects in your product, drawing up SWOT lists can't tell you that the defects are a weakness, for instance. When you're problem-solving with SWOT, you may miss a weakness that makes the problem worse or you may optimistically and incorrectly conclude you are strong enough to solve the problem. The more questions you and your staff discuss during a SWOT session, the better the chance of spotting weaknesses and threats relevant to the problem.

• Mind Tools: SWOT Analysis: Discover New Opportunities
• Exforsys Inc.: Thinking Skill: Problem Solving
• Enotes: SWOT Analysis
• Rapid Business Intelligence Success: Critical Small Business SWOT Analysis Example

A graduate of Oberlin College, Fraser Sherman began writing in 1981. Since then he's researched and written newspaper and magazine stories on city government, court cases, business, real estate and finance, the uses of new technologies and film history. Sherman has worked for more than a decade as a newspaper reporter, and his magazine articles have been published in "Newsweek," "Air & Space," "Backpacker" and "Boys' Life." Sherman is also the author of three film reference books, with a fourth currently under way.

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What is SWOT analysis and How to do a SWOT analysis: A Comprehensive guide

SWOT analysis is used across industries to measure S trengths, W eaknesses, O pportunities and T hreats of a business venture. Although it’s mainly used to assess business ventures, it can also be easily used to measure almost anything that is influenced by external and internal factors. Now that you know what a SWOT analysis is, let’s look at why you should use them and how to use them.

What is a SWOT Analysis?

Why use swot analysis, how to use swot analysis technique effectively, who needs/creates swot diagrams, different uses of swot diagrams, swot analysis best practices.

The goal of a SWOT analysis is to identify key areas where the business can improve its performance, as well as potential risks or obstacles that may need to be addressed to achieve success. By identifying these factors, the business can develop strategies to maximize its strengths, minimize its weaknesses, take advantage of opportunities, and mitigate potential threats.

Strengths are the internal factors that give an organization an advantage over its competitors. These may include areas such as the organization’s financial resources, intellectual property, skilled workforce, strong brand image, or proprietary technology. By identifying and leveraging these strengths, the organization can position itself to take advantage of opportunities in the market.

Weaknesses are the internal factors that place an organization at a disadvantage compared to its competitors. These may include areas such as outdated technology, lack of skilled personnel, poor reputation, or limited financial resources. By identifying these weaknesses, the organization can take steps to address them and improve its overall performance.

Opportunities

Opportunities are external factors that could help an organization grow or improve its performance. These may include factors such as new markets, emerging technologies, changing consumer preferences, or regulatory changes. By identifying these opportunities, the organization can develop strategies to take advantage of them and stay ahead of the competition.

Threats are external factors that could harm an organization’s performance. These may include factors such as economic downturns, increased competition, changing regulations, or shifts in consumer preferences. By identifying these threats, the organization can develop strategies to mitigate their impact and minimize risk.

With hundreds of methods to assess a business venture you might wonder why use SWOT analysis over other methods. Well here are few reasons

• First introduced by Albert Humphery in 1960’s it has stood the test of time and still effective as it was in 60’s and 70’s.
• It’s simplicity allows anyone to participate without prior knowledge of the methods and encourages participation.
• It can be used to assess places, competitors, businesses and even to do self assessments.
• Clearly differentiates between internal ( strength/weaknesses ) and external ( opportunities/threats ) factors to help decision making.

Benefits of the SWOT Analysis

SWOT analysis helps businesses and organizations understand their current position in the market allowing to develop effective strategies to improve performance and stay competitive.

SWOT analysis provides the information needed to develop effective strategic plans. It helps organizations to focus on the most important issues and develop a roadmap for achieving their goals.

It helps businesses and organizations weigh the pros and cons of different strateggic options and choose the best course of action to achieve their objectives.

The SWOT analysis helps organizations identify potential risks to its operation early on and develop strategies to mitigate them and reduce their impact.

There are many more but these are the main reasons why you should choose SWOT over other methods. Keep in mind though that some specialized methods like BPMN offer different advantages.

Now you know what and why it’s time to learn how to use them effectively.

Here are the basic steps to conducting a SWOT analysis.

Identify the objective : The first step in performing a SWOT analysis is to clearly define the objective or goal that you want to achieve. This will help you focus your analysis and ensure that you are considering the right factors.

Gather a team of expertise : Choose team members who have the relevant expertise and knowledge to contribute to the analysis. This can include managers, employees, and subject matter experts.

Gather information : Collect information about your organization’s internal and external environment. This can include data on financial performance, customer demographics, industry trends, and competitors.

Identify strengths, weaknesses, threats and opportunities : Identify the strengths and weaknesses and opportunities and threats affecting your organization and add them to the relevant quadrant of the SWOT diagram.

Analyze the results : Analyze the results of your SWOT analysis to determine the key insights and trends. This can help you identify the most important factors to consider in developing a strategic plan.

Develop a strategic plan : Develop a strategic plan that builds on your organization’s strengths, addresses its weaknesses, takes advantage of opportunities, and mitigates potential threats. This can help you achieve your goals and stay competitive in your market.

Creating a SWOT Analysis Diagram

SWOT diagram comes in various shapes but the key thing is to list down the strengths, weaknesses, opportunities and threats in an easily identifiable manner. You can get started easily by using one of our professionally designed SWOT analysis template

You can modify any of those templates online using our SWOT analysis template . If you prefer there are some templates in PDF form so you can easily download and take a printout for offline usage. Below is a blank template you can start using immediately.

Now lets look at how to enter data to the SWOT diagram.

Adding Data to the SWOT Analysis Diagram

The first thing you can do is add strengths and weaknesses . Because they are internal factors they are generally easy to identify. Depending on what you’re using the SWOT diagram these factors can vary significantly.

In a business environment they can be:

• Human resources – size of your workforce, skill level of your employees, language barriers, geographical distribution
• Financial Situation – Capital, investment capacity, income, predicted profit, seasonal income
• Distribution – sales partners, regional distribution, supply chain efficiency production capabilities
• Operations – Efficiency of software, operation and implement cost of software, efficiency of reporting processes

Depending on the organization there can be many more areas that can be a strength or a weakness. For example for a company like Apple brand loyalty is a great strength while for Samsung it could be low production cost.

As mentioned above adding internal factors are somewhat easy. The hard part comes when adding external factors, opportunities and threats .

Fortunately there is a formal process called PEST analysis to assess those opportunities and threats. Check out our SWOT vs PEST article to learn about similarities and differences.

PEST stands for P olitical, E conomic, S ocial and T echnological factors. Sometimes it’s referred as PESTLE analysis with L egal and E nvironmental factors added to the mix.

PEST provides you a structured and a formal way to assess the opportunities and threats. Different departments can work on different areas and come up with the necessary data needed for the final SWOT diagram. For large projects there is simply no option but to direct these to different departments.

Below is a breakdown of different areas and some important factors in those areas.

• Political – Government stability, corruption levels, trade controls, import and export restrictions
• Economic – Exchange rates, interest rates, income levels of population, wealth distribution
• Social – Education levels, religious harmony, attitude towards health, social welfare programs
• Technological – Internet penetration, access to basic infrastructure, software piracy, technology competency of workforce
• Legal – Tax laws and regulations, labor laws and firing policies, copyright and anti-piracy laws
• Environmental – Weather patterns, attitude towards recycling, attitude towards organic and green products

Obviously all the factors don’t apply to every organization. For example if you’re selling computers then weather patterns might not interest you but they are definitely important if you’re selling rain coats.

SWOT analysis are used by decision makers who are part of the planning of a venture. So most of the time they’re used by managers and senior executives. But as I mentioned before they can be applied in many scenarios so almost anyone can be creating SWOT diagrams.

If it’s a large project then they are usually created during lengthy multiple meetings. Managers of different departments, senior level executives and many others might get together and work on the SWOT analysis.

• Businesses : Business owners and managers can use a SWOT analysis to assess their company’s internal and external environment, identify areas of improvement, and develop a strategic plan to achieve their goals.
• Individuals : Individuals can use a SWOT analysis to assess their own strengths and weaknesses, identify areas for personal growth, and make career or life decisions.
• Non-profit organizations : Non-profit organizations can use a SWOT analysis to evaluate their programs, fundraising strategies, and volunteer engagement.
• Governments : Governments can use a SWOT analysis to evaluate their policies and initiatives, identify areas for improvement, and develop plans to address community needs.

A software like Creately with it’s real-time collaboration tools helps teams to collaborate on SWOT diagrams easily while always visualizing the changes made by others. The revision history is preserved so it’s clearly visible who made the changes and this makes it easy to reverse decisions as well.

SWOT can be used to cater to hundreds of scenarios. Here’s a look at some common situations where SWOT analysis becomes very useful.

I personally feel personal SWOT analysis is underutilized. It’s a great way to prepare for an interview. Especially so if it’s an internal interview for a promotion and you know who you’re up against. This enables you to focus on your strengths and how those strengths align with opportunities for the company. And it helps to stay clear or talk less about your weaknesses. Check out this FORBES article for a in depth look at doing a personal SWOT analysis.

Another area where SWOT analysis is heavily used is marketing. Marketing is all about getting ahead of your competitors and knowing their strengths and weaknesses helps to focus your message and highlight the strong points.

For example in our case we’re the only diagramming software that offers an online solution and an offline desktop solution that syncs with each other. This is obviously useful for frequent travelers who want access to their diagram from anywhere in the world. And we make sure to highlight this in conferences and meet-ups. Check out this article about using SWOT in marketing to see how you can apply them to your marketing plans .

• To ensure a comprehensive analysis, involve a diverse group of stakeholders with varying perspectives and experiences. This can include employees, customers, partners, suppliers, and industry experts.
• Avoid bias and be honest when evaluating strengths, weaknesses, opportunities, and threats. This will help to identify potential blind spots and areas for improvement.
• Once you have identified your strengths, weaknesses, opportunities, and threats, prioritize actions based on impact and feasibility. Develop a plan of action to address the most critical issues.
• Use a simple and straightforward format that is easy to understand and communicate. This can be a table or a simple list.
• A SWOT analysis is not a one-time exercise. Continuously review and update your analysis to ensure it remains relevant and useful.

I hope this article has helped you to understand what SWOT analysis are, why it’s used around the world and how you can use it to make better decisions . As always if you have any question feel free to ask them in the comments.

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Avoid being overly optimistic or pessimistic about the strengths, weaknesses, opportunities, and threats. This can lead to a biased analysis that is not based on facts and data.

Not involving key stakeholders. To get a comprehensive analysis, it is important to involve all key stakeholders.

Avoid analyzing too many factors or getting lost in details. Instead, focus on the most important factors that will have the greatest impact on your goals.

Confusing internal and external factors. Internal factors are within your control, while external factors are outside of your control. It is important to distinguish between these factors and address them accordingly.

Avoid ignoring potential threats or weaknesses. Identifying and addressing these issues can help to prevent problems and minimize risks.

Refer and review internal data such as financial statements, employee feedback, customer reviews, and operational data. This can help you to identify your company’s strengths and weaknesses.

Conduct market research to gather information about your industry, competitors, and customers. This can help you to identify potential opportunities and threats.

Gather feedback from stakeholders such as employees, customers, partners, and industry experts. This can provide valuable insights and different perspectives.

Seek out expert opinions from industry analysts, consultants, and other professionals.

More Related Articles

Software engineer turned tech evangelist. I handle marketing stuff here at Creately including writing blog posts and handling social media accounts. In my spare time, I love to read and travel.

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SWOT Analysis: Definitions, Example & Templates

What Is a SWOT Analysis?

A SWOT analysis is a technique that is used in strategic planning. It helps to identify the strengths, weaknesses, opportunities and threats of a business using a SWOT matrix. SWOT is also called a situational analysis in business planning because it captures the internal and external factors that make up the business environment of a company to provide an overview of its current state or current situation. In addition, a SWOT analysis helps to identify competitive advantages that your business or project plan might have and specify its objectives based on its strengths, weaknesses, opportunities and threats.

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SWOT Analysis Template

Use this free SWOT Analysis Template for Word to manage your projects better.

SWOT Acronym

SWOT stands for strengths, weaknesses, opportunities and threats. Here’s a quick explanation of how these four categories describe the environment of a project or business.

Strengths are one of the two internal factors you’ll map out in your SWOT analysis. It speaks to where you have a competitive advantage in your project or organization.

Weaknesses are the second half of your internal review. Here, you will look at where you’re falling short in your project or business planning.

Opportunities

Opportunities are the first half of your exploration of external factors impacting your business or project. Here, you’ll be looking for what in the business environment you can exploit to your advantage.

Threats are the second half of external factors in the business environment that can harm your project or organization.

The SWOT Matrix

A SWOT matrix is another way of saying SWOT analysis. The SWOT matrix is a term to describe the structure in which the SWOT analysis is reported. That is, the SWOT matrix is a box or shape that’s divided into four quadrants that represent strengths, weaknesses, opportunities and threats to the project or organization.

SWOT Analysis Example

Let’s look at a SWOT analysis in the real world to give us a better picture of what a SWOT analysis is and how it works. Let’s take a soda company that is well-established in the marketplace. Below is our SWOT analysis.

• Strengths: High brand recognition, the majority share of the market and a variety of products.
• Weaknesses: Going against health trends, unable to formulate a healthy version of its top-selling product.
• Opportunities: The health market is wide open for them.
• Threats: They are a late entry into the health market, which has already strong brand leaders, and their brand has an unhealthy image.

Considering the dominance of this product, the company should develop and market a health-conscious beverage sooner than later. It will help them to remove the tarnish to their brand and open up a huge potential for growth.

Why Use SWOT?

There are many reasons that the SWOT technique is used. For one, it can help explore new solutions to a problem as SWOT identifies barriers that limit goals and objectives.

In order to conduct an accurate SWOT analysis, you need accurate input. ProjectManager is work and project management software that delivers real-time data for more insightful decision-making. Our dashboard automatically collects and calculates project metrics and displays them in easy-to-read graphs and charts so you can make business decisions with live not date information. There’s no setup required as with inferior software, so get started now for free!

If you need to decide on a direction that’s more effective, a SWOT analysis can help you make that choice. It also helps to reveal possibilities and limitations for change. When thinking of revising plans, SWOT can be used to navigate systems, communities, organizations and more. It’s also a great way to brainstorm.

If you’re looking to conduct a SWOT analysis, you’ll need a SWOT analysis template . ProjectManager has dozens of free project management templates that address every stage of a project. Our free SWOT analysis template for Word gives you space to list all the strengths, weaknesses, opportunities and threats to your project or organization. Download your free SWOT template for Word today and get started on your strategic planning.

How to Use a SWOT Analysis

Execute a SWOT analysis with a matrix that has rows for internal organizational issues and external environmental issues. Make sure to add columns to collect what is helpful and harmful.

As a SWOT analysis example, think about a digital marketing agency. You can collect the company’s strengths, weaknesses, opportunities and threats—both internally and externally.

The next step is to take this data and build a strategy based on it. With a clear picture of where you stand in context, which has been mapped out on the SWOT matrix, it’s then possible to find a winning path through this landscape.

SWOT Analysis Video

Jennifer Bridges, shows you the what, why and how. She also includes a SWOT analysis example in the video, so be sure to watch it!

Here’s a screenshot of the whiteboard for your reference.

Transcription

Today, we’re talking about how to perform a SWOT analysis. But before we walk through how to perform one, I wanna talk about what one is and why it’s so important because I really do believe they’re so powerful and underutilized.

So first of all, a SWOT analysis is a technique and it’s used for strategic planning and analysis. So it helps to identify the strengths, weaknesses, opportunities, and threats, hence the SWOT.

It’s related to business competition and project planning. And it helps to specify the objectives of a business venture or project and to identify the internal and external factors that are favorable or unfavorable to achieving these objectives.

So let’s talk about why this is so powerful to use. First of all, they can be used to explore new solutions to problems, to identify barriers that could limit the goals and objectives, and help to decide on a direction that will be most effective. It also helps to reveal possibilities and limitations for change, to revise plans to best navigate systems, communication, or even organizations, and act as a brainstorming device.

So sometimes you will see the SWOT identified in a matrix, a 2 x 2 matrix. So if the SWOTs again, strengths, weaknesses, opportunities, and threats, we look at what’s helpful and what’s harmful. We also look at the internal which is representative of the organization, external, which is your environment. So let’s walk through an example.

So one of my clients is a digital marketing agency and they were looking at competition where best to utilize their services and address some of the things that were creating barriers to their growth or to be able to scale. So some of their strengths were having a reputation in the marketplace and they had the expertise and high level of expertise in the agency.

But the weaknesses were a shortage of experienced consultants available that they could hire when they want to scale. Another weakness was they were unable to handle too many different projects at a time because of the shortage of resources that had the expertise.

Some of the opportunities that were available to them are that they were well established, they had a well-established position with a well-defined niche so people came to them and that brought a lot of opportunities for growth for them.

It also identified a market for projects using traditional marketing. So where they went to look at other opportunities for growth because the digital marketing had some limitations, they went back and added the traditional marketing, which there are more resources out there with the expertise. So if they scaled and grew that, those were available.

Some of the threats were that there are a lot of larger agencies out there who use less experienced consultants. So they didn’t go for the high expertise. They went for the ones, maybe new into it, that they were training and teaching. And then another threat was there are more smaller agencies popping up all the time that were seeking to enter that market.

So, as you can see, by identifying the strengths, the weaknesses, opportunities, and threats, it not only gives you the means to plan and brainstorm growth, but it helps you in your next steps to really build out the strategies to avoid the limitations or avoid the threats and really leverage those opportunities.

So you can see the power of a SWOT analysis. And if you need additional resources on a SWOT analysis, then sign up for our software now at ProjectManager.

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Sandeep Kashyap

How to conduct an effective SWOT analysis for your project

Introduction 

“What do you eat when you get peckish?”

I have no idea what this means, but apparently, Edward de Bono did. Why? 

“To be creative and generate new ideas, we need to think outside of the box and look unusually at things, so we can come up with truly unique and novel ways to solve problems.” 

And even though this is true for developing new products and services, it is also a great way to help you structure the thinking behind the project you’re currently working on.

If you’ve never heard of a SWOT analysis, it’s nothing scary and sounds like something you do when you go away for the weekend.  

It stands for strengths, weaknesses, opportunities , and threats . 

When you’re running a project (big or small), you need to know what’s working for you, where there are weaknesses that need to be worked on and how to take advantage of opportunities best.

Well, it’s not an easy task.  

But this guide will give you some pointers on what to do and how to do it effectively.

What is SWOT Analysis?

A SWOT analysis is a strategic planning tool that helps determine the strengths, weaknesses, opportunities, and threats of a project or organization. 

It helps you identify the internal (strengths and weaknesses) and external (opportunities and threats) factors that could affect the outcome of a project and the ways to gain an advantage over competitors.

It is a powerful method used to generate ideas and formulate strategies that lead to success. 

This simple framework is the basis of many project plans in the PMBOK Guide (Project Management Book Of Knowledge). The framework helps draw attention to important facts, issues, strengths, weaknesses, and opportunities related to the project scope. 

In fact, it encourages brainstorming and focuses your attention on information gathering and organizing.

How to perform SWOT analysis for your project: 4 simple steps

You are the project or business unit coordinator, and the people report to you. They have a lot of questions you need to answer. You don’t want to appear unprepared, so you decide to organize a SWOT analysis for your project.

But you don’t truly understand what it is and how you conduct one?

Well, the goal of this analysis is not to predict the future but to understand it. 

It’s used to identify areas that need improvement to develop strategies to adapt to challenges or take advantage of opportunities. 

As previously said, the framework is relatively straightforward. 

Several SWOT templates and designs are available, but it ultimately boils down to setting up a 4-cell table with a quadrant dedicated to each element. 

The SWOT principles are displayed in these four squares. 

Each square represents aspects of the project. It’s ideal to do this as a group to ensure that everyone’s voice is heard.

Strengths (S) – What do we do well that others might not? 

These characteristics or features give your project an advantage over others in the industry, and they’re also what sets it apart from competing projects within your organization.

Weaknesses (W) – What don’t we do well that others might?

These are the characteristics or features that put you at a disadvantage relative to other projects in the industry or competitors in the market. 

Opportunities (O) – Where could our strengths lead us?

These are factors that could help you achieve success with this project or venture, such as new technologies, changes in market dynamics, or other developments in your industry.

Threats (T) – Where could our weaknesses lead us?

These are factors that could cause you to fail with this project or venture — for example, economic downturns, significant changes in customer needs, and so on.

Making The Right Decision With Your SWOT

Projects are unique, and they have their challenges and obstacles, and it can be overwhelming to see the potential issues you might come across while working.

After the initial project kickoff, the first checkpoint is conducting a SWOT. By analyzing these four factors, you’ll have a better picture of where your project is going and what could go wrong. 

This analysis can be conducted as an exercise with your team or independently. I recommend doing this with your team to get more perspectives and identify more factors. 

Make a matrix, define a few specific, valid questions, and see how it goes.

As a project manager, you’ll use this information to help you steer your team in the right direction and avoid roadblocks that may lead to a project failure.

To get started with your analysis, work with your team to brainstorm answers for each category below.

• Who are your competitors?
• What is the thing that separates you from your competition?
• What’s your motivation?
• How quickly can it be completed?

Take stock of all the internal elements that contribute to your success and failure as a team or organization. Write down all the strengths (what works well) and weaknesses (which could improve). Note: Strengths and weaknesses are internal factors within your control.

Look at all the external elements that may positively or negatively affect your team or organization. Write down all the opportunities (what works well) and threats (which could improve). Note: Opportunities and threats are external factors outside of your control.

How can ProofHub help you categorize your SWOT analysis data

SWOT analysis is a structured process used by an organization in developing a strategic plan for goal and mission accomplishment. It examines an organization’s strengths, weaknesses, opportunities, and threats in its business environment.

In the world of project management, many complicated things may hinder your progress. You may have heard about it, but you probably don’t know precisely what and how to use it. 

ProofHub is a top-rated, versatile team collaboration and project management software that can help you conduct an effective analysis of your projects. You can use various tools of ProofHub to categorize the data from your analysis into meaningful, actionable information.

It also allows you to create as many custom fields as you want. 

These custom fields can store the data collected during the analysis. You can also create various groups of custom fields and add different sets of custom fields to other groups. You can create different groups for each category in which you want to store the data. 

For example, if you are working on a web development project and want to conduct an analysis, you can create multiple groups, such as Strengths, Weaknesses, Opportunities, and Threats; and add all the custom fields you need for that project under these groups. 

If your project involves creating three websites, you can easily use these groups for all three websites or any other future projects. You can reuse these groups repeatedly without having to waste time creating new ones each time. 

This way, ProofHub will allow you to keep track of all the data you have collected during the process and help you keep it organized.

I’ll admit that SWOT is not typically my favorite thing to do; however, it is a valuable technique to help you focus on project-related issues. 

Oftentimes, too many cooks in the kitchen can cause more problems than they solve. 

It will help you avoid this pitfall and arrive at an optimal solution with the team’s full support. 

If you’ve never run a SWOT before, I hope this post has taught you the importance of using one as part of your project planning and showed you how easy it could be by providing a template to guide you through it.

Regarding any of your projects, make sure you take the time to conduct a proper analysis before proceeding; you’ll be glad that you did.

SWOT analysis is an acronym for?

SWOT analysis is an acronym for a deliberation between Strengths, Weaknesses, Opportunities, and Threats.

What is SWOT analysis used for?

SWOT analysis is a common technique used to understand the relative strengths and weaknesses of your business. It allows you to identify potential threats and opportunities in the marketplace.

How SWOT analysis helps in strategic planning?

Analysis is the first step to solving any problem you might have. This sample SWOT Analysis shows how you can use simple and easy steps to identify the strengths and weakness of a business or product, as well as its opportunities and threats.

What is Pestle analysis?

Pestle analysis is a framework for understanding the external macro-environment facing a business. The components of this framework are Political, Economic, Social, Technological, Legal, Environmental and Cultural.

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What is Problem Solving? (Steps, Techniques, Examples)

By Status.net Editorial Team on May 7, 2023 — 5 minutes to read

What Is Problem Solving?

Definition and importance.

Problem solving is the process of finding solutions to obstacles or challenges you encounter in your life or work. It is a crucial skill that allows you to tackle complex situations, adapt to changes, and overcome difficulties with ease. Mastering this ability will contribute to both your personal and professional growth, leading to more successful outcomes and better decision-making.

Problem-Solving Steps

The problem-solving process typically includes the following steps:

• Identify the issue : Recognize the problem that needs to be solved.
• Analyze the situation : Examine the issue in depth, gather all relevant information, and consider any limitations or constraints that may be present.
• Generate potential solutions : Brainstorm a list of possible solutions to the issue, without immediately judging or evaluating them.
• Evaluate options : Weigh the pros and cons of each potential solution, considering factors such as feasibility, effectiveness, and potential risks.
• Select the best solution : Choose the option that best addresses the problem and aligns with your objectives.
• Implement the solution : Put the selected solution into action and monitor the results to ensure it resolves the issue.
• Review and learn : Reflect on the problem-solving process, identify any improvements or adjustments that can be made, and apply these learnings to future situations.

Defining the Problem

To start tackling a problem, first, identify and understand it. Analyzing the issue thoroughly helps to clarify its scope and nature. Ask questions to gather information and consider the problem from various angles. Some strategies to define the problem include:

• Brainstorming with others
• Asking the 5 Ws and 1 H (Who, What, When, Where, Why, and How)
• Analyzing cause and effect
• Creating a problem statement

Generating Solutions

Once the problem is clearly understood, brainstorm possible solutions. Think creatively and keep an open mind, as well as considering lessons from past experiences. Consider:

• Creating a list of potential ideas to solve the problem
• Grouping and categorizing similar solutions
• Prioritizing potential solutions based on feasibility, cost, and resources required
• Involving others to share diverse opinions and inputs

Evaluating and Selecting Solutions

Evaluate each potential solution, weighing its pros and cons. To facilitate decision-making, use techniques such as:

• SWOT analysis (Strengths, Weaknesses, Opportunities, Threats)
• Decision-making matrices
• Pros and cons lists
• Risk assessments

After evaluating, choose the most suitable solution based on effectiveness, cost, and time constraints.

Implementing and Monitoring the Solution

Implement the chosen solution and monitor its progress. Key actions include:

• Communicating the solution to relevant parties
• Setting timelines and milestones
• Assigning tasks and responsibilities
• Monitoring the solution and making adjustments as necessary
• Evaluating the effectiveness of the solution after implementation

Utilize feedback from stakeholders and consider potential improvements. Remember that problem-solving is an ongoing process that can always be refined and enhanced.

Problem-Solving Techniques

During each step, you may find it helpful to utilize various problem-solving techniques, such as:

• Brainstorming : A free-flowing, open-minded session where ideas are generated and listed without judgment, to encourage creativity and innovative thinking.
• Root cause analysis : A method that explores the underlying causes of a problem to find the most effective solution rather than addressing superficial symptoms.
• SWOT analysis : A tool used to evaluate the strengths, weaknesses, opportunities, and threats related to a problem or decision, providing a comprehensive view of the situation.
• Mind mapping : A visual technique that uses diagrams to organize and connect ideas, helping to identify patterns, relationships, and possible solutions.

Brainstorming

When facing a problem, start by conducting a brainstorming session. Gather your team and encourage an open discussion where everyone contributes ideas, no matter how outlandish they may seem. This helps you:

• Generate a diverse range of solutions
• Encourage all team members to participate
• Foster creative thinking

When brainstorming, remember to:

• Reserve judgment until the session is over
• Encourage wild ideas
• Combine and improve upon ideas

Root Cause Analysis

For effective problem-solving, identifying the root cause of the issue at hand is crucial. Try these methods:

• 5 Whys : Ask “why” five times to get to the underlying cause.
• Fishbone Diagram : Create a diagram representing the problem and break it down into categories of potential causes.
• Pareto Analysis : Determine the few most significant causes underlying the majority of problems.

SWOT Analysis

SWOT analysis helps you examine the Strengths, Weaknesses, Opportunities, and Threats related to your problem. To perform a SWOT analysis:

• List your problem’s strengths, such as relevant resources or strong partnerships.
• Identify its weaknesses, such as knowledge gaps or limited resources.
• Explore opportunities, like trends or new technologies, that could help solve the problem.
• Recognize potential threats, like competition or regulatory barriers.

SWOT analysis aids in understanding the internal and external factors affecting the problem, which can help guide your solution.

Mind Mapping

A mind map is a visual representation of your problem and potential solutions. It enables you to organize information in a structured and intuitive manner. To create a mind map:

• Write the problem in the center of a blank page.
• Draw branches from the central problem to related sub-problems or contributing factors.
• Add more branches to represent potential solutions or further ideas.

Mind mapping allows you to visually see connections between ideas and promotes creativity in problem-solving.

Examples of Problem Solving in Various Contexts

In the business world, you might encounter problems related to finances, operations, or communication. Applying problem-solving skills in these situations could look like:

• Identifying areas of improvement in your company’s financial performance and implementing cost-saving measures
• Resolving internal conflicts among team members by listening and understanding different perspectives, then proposing and negotiating solutions
• Streamlining a process for better productivity by removing redundancies, automating tasks, or re-allocating resources

In educational contexts, problem-solving can be seen in various aspects, such as:

• Addressing a gap in students’ understanding by employing diverse teaching methods to cater to different learning styles
• Developing a strategy for successful time management to balance academic responsibilities and extracurricular activities
• Seeking resources and support to provide equal opportunities for learners with special needs or disabilities

Everyday life is full of challenges that require problem-solving skills. Some examples include:

• Overcoming a personal obstacle, such as improving your fitness level, by establishing achievable goals, measuring progress, and adjusting your approach accordingly
• Navigating a new environment or city by researching your surroundings, asking for directions, or using technology like GPS to guide you
• Dealing with a sudden change, like a change in your work schedule, by assessing the situation, identifying potential impacts, and adapting your plans to accommodate the change.
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Effective Problem-Solving Techniques in Business

January 20, 2023

Purdue Online

Problem solving is an increasingly important soft skill for those in business. The Future of Jobs Survey by the World Economic Forum drives this point home. According to this report, complex problem solving is identified as one of the top 15 skills that will be sought by employers in 2025, along with other soft skills such as analytical thinking, creativity and leadership.

Dr. Amy David , clinical associate professor of management for supply chain and operations management, spoke about business problem-solving methods and how the Purdue University Online MBA program prepares students to be business decision-makers.

Why Are Problem-Solving Skills Essential in Leadership Roles?

Every business will face challenges at some point. Those that are successful will have people in place who can identify and solve problems before the damage is done.

“The business world is constantly changing, and companies need to be able to adapt well in order to produce good results and meet the needs of their customers,” David says. “They also need to keep in mind the triple bottom line of ‘people, profit and planet.’ And these priorities are constantly evolving.”

To that end, David says people in management or leadership need to be able to handle new situations, something that may be outside the scope of their everyday work.

“The name of the game these days is change—and the speed of change—and that means solving new problems on a daily basis,” she says.

The pace of information and technology has also empowered the customer in a new way that provides challenges—or opportunities—for businesses to respond.

“Our customers have a lot more information and a lot more power,” she says. “If you think about somebody having an unhappy experience and tweeting about it, that’s very different from maybe 15 years ago. Back then, if you had a bad experience with a product, you might grumble about it to one or two people.”

David says that this reality changes how quickly organizations need to react and respond to their customers. And taking prompt and decisive action requires solid problem-solving skills.

What Are Some of the Most Effective Problem-Solving Methods?

David says there are a few things to consider when encountering a challenge in business.

“When faced with a problem, are we talking about something that is broad and affects a lot of people? Or is it something that affects a select few? Depending on the issue and situation, you’ll need to use different types of problem-solving strategies,” she says.

Using Techniques

There are a number of techniques that businesses use to problem solve. These can include:

• Five Whys : This approach is helpful when the problem at hand is clear but the underlying causes are less so. By asking “Why?” five times, the final answer should get at the potential root of the problem and perhaps yield a solution.
• Gap Analysis : Companies use gap analyses to compare current performance with expected or desired performance, which will help a company determine how to use its resources differently or adjust expectations.
• Gemba Walk : The name, which is derived from a Japanese word meaning “the real place,” refers to a commonly used technique that allows managers to see what works (and what doesn’t) from the ground up. This is an opportunity for managers to focus on the fundamental elements of the process, identify where the value stream is and determine areas that could use improvement.
• Porter’s Five Forces : Developed by Harvard Business School professor Michael E. Porter, applying the Five Forces is a way for companies to identify competitors for their business or services, and determine how the organization can adjust to stay ahead of the game.
• Six Thinking Hats : In his book of the same name, Dr. Edward de Bono details this method that encourages parallel thinking and attempting to solve a problem by trying on different “thinking hats.” Each color hat signifies a different approach that can be utilized in the problem-solving process, ranging from logic to feelings to creativity and beyond. This method allows organizations to view problems from different angles and perspectives.
• SWOT Analysis : This common strategic planning and management tool helps businesses identify strengths, weaknesses, opportunities and threats (SWOT).

“We have a lot of these different tools,” David says. “Which one to use when is going to be dependent on the problem itself, the level of the stakeholders, the number of different stakeholder groups and so on.”

Each of the techniques outlined above uses the same core steps of problem solving:

• Identify and define the problem
• Consider possible solutions
• Evaluate options
• Choose the best solution
• Implement the solution
• Evaluate the outcome

Data drives a lot of daily decisions in business and beyond. Analytics have also been deployed to problem solve.

“We have specific classes around storytelling with data and how you convince your audience to understand what the data is,” David says. “Your audience has to trust the data, and only then can you use it for real decision-making.”

Data can be a powerful tool for identifying larger trends and making informed decisions when it’s clearly understood and communicated. It’s also vital for performance monitoring and optimization.

How Is Problem Solving Prioritized in Purdue’s Online MBA?

The courses in the Purdue Online MBA program teach problem-solving methods to students, keeping them up to date with the latest techniques and allowing them to apply their knowledge to business-related scenarios.

“I can give you a model or a tool, but most of the time, a real-world situation is going to be a lot messier and more valuable than what we’ve seen in a textbook,” David says. “Asking students to take what they know and apply it to a case where there’s not one single correct answer is a big part of the learning experience.”

Make Your Own Decision to Further Your Career

An online MBA from Purdue University can help advance your career by teaching you problem-solving skills, decision-making strategies and more. Reach out today to learn more about earning an online MBA with Purdue University .

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