Tag Archives for SWOT

It has been my observation that businesses can be classified into three broad types. The first and the most exciting of these is the type of business that brings to market a very unique and revolutionary product that nobody had dreamed of before and establishes a completely new market segment. Names that jump to mind are Google, Apple & Facebook.

The second category is made of companies that take an existing idea or product and adapt it to a different market or situation thereby creating value. Think of Alibaba, which took the business model of Amazon and adapted it to the Chinese market and has become hugely successful in the process.

The last category is made up of companies that are formed with a “me-too” product or service addressing the same market, but become successful by excelling in one aspect of the product. An example is Budget of the car rental industry, a company that competes with more established rivals such as Avis purely on price.

It is also my observation that most businesses in the world fall into the second and third categories. It is phenomenally hard to come up with something that can create an entirely new market segment! My own company MecSoft, that develops computer-aided manufacturing software, falls into the second category. We took an established technology and adapted it to the personal computer thereby allowing us to serve a large market segment that was previously not being served by established players.

Given the fact that most companies in the world have precursors or have businesses that have something in common, it would behoove entrepreneurs to be aware of that what their competitors are doing (or have done) and can use that knowledge to be more innovative, unique, better, faster or cheaper.

Here are some of the competitive areas I commonly examine on my road as an entrepreneur.

Think of Competition as Education

One of the most fundamental requirements of being an entrepreneur is to understand what you’re up against. Your business plan likely outlines who your competitors are and why they are your competitors. In order to place your business in a good place to outperform them, you should be educating yourself on the processes they use to be successful.

Learning about things like how they market their services, their pricing model, their value-adds, their media presence, and what makes them different will give you some great perspective. When you know everything about your company and everything about the companies of your competitors, you’ll be more clearly able to identify opportunities for market share and growth.

Find out what People Don’t Like about Your Competitors

This is one area where your research will help you separate your business from your competition. If your competitors have been around for a while you should be able to go online to see what kinds of complaints their customers have about them. You can peruse social media, forum sites, and review sites like Yelp or Google Reviews for comments about their products or services.

For example, when we started MecSoft we took a look at some of the common complaints that our end-users had when using competitive products. What we found was that other CAD/CAM software companies made customers sacrifice cost for quality and provided either great products that were really expensive or mediocre products that were inexpensive. This led us, in part, to create a company that provided affordable yet powerful software solutions and we haven’t looked back since.

Note: Back then we didn’t have as much access to social media and review sites but we certainly had a pulse on what people in the industry were saying about our competitors and continue to monitor these mentions now.

Find out what People Do Like about You Competition

On the other side of the review coin is learning about what people do like about your competition. If they are doing something right you have to give them credit for their success and use that information to cater to customers.

This does not mean you copy what they have done but rather combine your knowledge of what people are saying they don’t like and what they do like to determine if there is an opportunity there to create something better, faster or cheaper than your competition.

Use the “SWOT” Analysis to Compare Yourself

In the SWOT analysis you take a side-by-side comparison to your competition in the areas of:

• Strengths
• Weaknesses
• Opportunities
• Threats

If you are really honest about the things your competitors do better than you, avoiding the mindset that you are simply the best at everything, you can identify shortcomings. No business, and especially smaller start-ups, has it all. They understand that they have specific strengths and weaknesses that they will need to cater to and focus on.

Using the SWOT model you can plan for the short-term and long-term so that you can improve revenues now or invest in a business model that has a bigger payout down the road. For example, if you identify that your competitor is strong in the area of marketing but is weak in the area of innovation, you may decide that your niche is better-suited in the innovation arena than it is trying to go head-to-head with their marketing department.

When thinking about threats consider things that can hinder their, and your, sustainability and ability to grow. For example, would a supply chain mishap put them, or you, in a really bad spot? Would the increase in price of a certain resource threaten the success of either of your companies? Are there safeguards you can put in place to alleviate yourself from potential threats? If you can identify threats to your competitors do you have a plan in place to capitalize on them if that time ever comes?

You are Never Done Learning

Whether you appoint someone to constantly perform competitive analyses or do them yourself, the idea is to always be paying attention. The more people on your team that study the competition – processes, systems, hardware, software, technology, relationships, etc. – the better.

While you will always be focused on making your own products or services better, you should always be aware of what other options your customers have and why they might decide to go with the other guy. In the end, you’ll always anticipate changes in the market and put yourself in a better place to capitalize on opportunities.

Joe Anand, President and CEO of MecSoft Corporation, a worldwide leader in providing computer-aided manufacturing (CAM) software products for the small to mid-market segments earned his MS degree, in Mechanical Engineering from Clemson University in 1984, performing research on robot path planning and simulation. Joe is a proven expert in Software Development, Mechanical Engineering, Entrepreneurship and project management and sales.

 

When it comes to analyzing the feasibility of a project SWOT is up there with the best of them. Its powerful enough to diagnose a business and simple enough to be used by an individual. However if not done properly it can give you misleading results and cost you time and money. Listed below are some common SWOT analysis mistakes and what you can do to avoid them.

Adding Long Lists

Listing down too many things is probably the most common SWOT analysis mistake. This usually happens when there is no clear goal or if the scope is not well defined. In an organization, many people are involved in creating the SWOT analysis and long lists make it harder to figure out what’s critical and what’s not critical.

How to Fix: Clearly explain why you’re doing the SWOT analysis and what you’re trying to achieve by doing it. Stick to 3-5 important points for each section.

Overestimating Strengths

Let’s face it, most of us are guilty of doing this. Every software company thinks they have the best developers and every hotel thing they have the best chefs. But it usually isn’t the case.

Strengths are usually the first to be added to the SWOT when everyone is fresh and eager to contribute. So it’s very easy to go overboard with strengths. Point 1 helps a bit here. Because you’re forced to limit it to 3-5 points you think a bit more about what to include. Still its easy to overestimate your strengths and that can be very damaging when you actually implement your project.

How to Fix: Properly analyze your strengths. Get unbiased opinions from outsiders if necessary. If its a product or a service put yourself in a customers shoes. Will they actually consider it a strength compared to your competitors?

Generalizing Factors

A less obvious but a very dangerous SWOT analysis mistake. For example, if you’re running a software company a weakness could be “long release cycle”. It’s obviously a weakness but its hard to create an actionable strategy by looking at that factor. It could be delayed for a number of reasons.

But if you added that factor as “insufficient QA resources” then anyone looking at the diagram can instantly identify the problem and take action to rectify the problem.

How to Fix: Don’t generalize factors and try to add cause/reason as a factor. Also whenever possible make sure to add quantitative values.

Brushing Over Weaknesses

Almost everyone is reluctant to admit weaknesses. It is even harder during a SWOT analysis because you’re on a high now after identifying your most important strengths. It is even harder in a business environment because nobody wants to show a weakness in front of their superiors.

However, underestimating your weaknesses can be more dangerous than overestimating strengths.

How to Fix: Be critical of your weaknesses. Encourage people to come up with weaknesses and assure them that it won’t be held against them. If many are participating you can ask each person to list down weaknesses separately and then pick the most important ones from them.

Ignoring PEST Analysis

Opportunities and threats present a different challenge. Strengths and weaknesses are internal factors so it is somewhat easy to figure and list them out. Not so easy with opportunities and threats because they are external factors.

PESTLE analysis provides businesses with a standard and structured way to assess those external factors. Unfortunately, people often confuse SWOT analysis and PEST analysis. And businesses that ignore it might miss out on great opportunities or might start to see opportunities when they don’t exist.

How to Fix: Do a proper PESTLE analysis and pick your opportunities and threats from that analysis.

Know More SWOT Analysis Mistakes?

I think I’ve covered most of the common SWOT analysis mistakes. SWOT analysis is a very effective way to analyze your business, but if you make the above mistakes you’ll end up with a faulty SWOT diagram that can actually harm your business.

Know any more common mistakes? We love to hear from you, so feel free to share them in the comments section. Confident enough to create your first diagram? Get started with our SWOT analysis templates.

We all have strengths. A personal SWOT analysis helps you identify your strengths and make the most of them by aligning them with available opportunities. We all have weaknesses too. Identifying and managing those weaknesses allows you to avoid the potential threats that arise from those weaknesses. A personal SWOT makes the processes simple, visual and actionable and we will show you how to create your own one.

How to do a personal SWOT analysis?

List down the “strengths”

The first step is to list down your strengths. Knowing these will help you to be more confident in an interview or when looking for a job promotion. Because you have listed down things beforehand you’ll have an easier time recalling things as well. Here are few questions to ask yourself when filling this part.

• What are the professional qualifications/certifications you have that make you stand out from the rest?
• Can your expertise in some areas make a difference to the organization?
• What projects/campaigns have you completed successfully?
• Do you have powerful industry contacts? Especially useful in areas like advertising, marketing, and insurance.
• What other skills make you stand out from the rest? For examples things like leadership and dedication to work.
• What do others think as your strengths?

Important: The “stand out from the rest” part is very important in SWOT. For example in a software company having a degree in software engineering is not a strength, because everyone else has one. Masters in mathematics might be a different story.

Know your “weaknesses”

The second step is to identify your weaknesses. As I mentioned before SWOT is used by individuals to assess and improved themselves. Identifying weaknesses is the best way to improve them.

This also helps you to be prepared to answer or counter them if they come up during an interview or performance review. Ask yourself these questions when filling this.

• Do you have the necessary skills/qualifications to be successful in your current or future roles?
• Do you have bad habits? For example, frequently getting late, poor communication skills, bad time reporting, etc.
• What other traits can you improve to be more efficient?
• What do others think as your weaknesses? Even if you don’t consider it a weakness.

Important: Be honest and realistic when answering the questions. After all, it’s a self-assessment which only you will see. Use it as a stepping stone for future improvements.

Find matching “opportunities”

We often miss opportunity because it’s dressed in overalls and looks like work – Thomas A. Edison

Opportunities come in different shapes and forms. Sometimes opportunities pass by you without you even noticing them. So here are a few things to be on the lookout for.

• Are there any significant changes/advancements in your industry that you can take advantage of?
• Has new technology or industry trend emerged that you can make use of future?
• Is a new position advertised in your company that matches your skillset? Or did a position become vacant?
• Is there a new project in your organization that you can join which will benefit your career
• Can acquiring new skills give you a competitive advantage? For example in the airline industry knowing another language to your mother tongue is an advantage.

The list of questions can go on and on. The most important thing is to be on the lookout for opportunities.

Important: It’s great if an opportunity matches your strengths. But sometimes great opportunities arise in areas that don’t match your skillset. Do consider the pros and cons before disregarding them.

Be aware of “threats”

When doing a personal SWOT analysis you need to think of yourself as a company or a product and assess yourself against others. This way it makes it easy for you to identify threats. So here’s how to identify threats.

• Is one of your peers doing a better job than you in a similar role? Are both of you fighting for the same promotion?
• Is the popularity of new technologies or the demise of old technologies threatening your career? For example, it is common for software engineers careers to become stale because they didn’t spend the time to learn the latest technologies.
• Are your personal traits hurting your career advancements?
• What are the obstacles that prevent you from achieving your targets? Could be at work or in your personal lives.

Identify the threats and try to eliminate the ones you can.

Here is a quick video showing how you can perform a SWOT analysis with Creately.

What is a SWOT analysis?

If you’re familiar with SWOT you can skip this section, but if you’re unfamiliar with it SWOT stands for

• Strengths
• Weaknesses
• Opportunities
• Threats

You can use it to assess yourself, compare yourself to your peers/competitors and also use it to find career growth opportunities. Check out SWOT Analysis: What, Why and How for a detailed overview.

Blank Personal SWOT Analysis Template

Now you know how to do it, it’s time to create your own personal SWOT analysis diagram. If you prefer to create it online ( so you can access it anytime, anywhere ) just click on the following blank SWOT template. It will open in a new window inside our diagram editor.

If you prefer to print it out and then do the analysis you can download it as a ready-to-print PDF as well.

Editable Templates ( PDF ) of Personal SWOT

Or you can make use of our professionally designed SWOT analysis templates.

When to do a personal SWOT analysis?

It is a self-assessment, so anytime is a good time. But there are a few specific instances where it can really benefit you.

• When going to an interview – So you can focus on your strengths and talk about them more. It will help in preparing the CV as well. If you have a very good idea about the job requirements beforehand you can modify the CV to match them as well. Remember that recruiters spend on average 6 seconds to decide whether you fit in or not.
• When applying for a promotion – helps you to assess yourself against other candidates. You’ll have a good understanding of your strengths against your competitors so you can focus on them rather than your general strengths.
• Before a career switch – helps you to figure out whether your skills match the opportunities in your new career or whether they are much suited for your current job.

Using a personal SWOT analysis for a career switch

I’ll take myself as an example. Before I moved to marketing I worked as a software engineer for 7 years. I didn’t hate the job, but I wasn’t in love with it either. And I was doing more and more online marketing stuff during my free time. After a while, I assessed my skills, realized I had enough skills to succeed in marketing, and moved to a full-time marketing role. Here’s what the SWOT would look like during that time.

In my case, the differences were somewhat obvious because I was switching to a completely different field. But in some cases, the pros and cons are not that obvious.

For example, if you’re a senior software engineer in a software company you might have to make a decision about taking the management path or the technical path.  Do you want that coveted tech lead positions that everyone is competing for or do you want a managerial position with all its responsibilities? Listing things down and doing a detailed SWOT analysis will help you make a better decision.

I hope I’ve addressed all your concerns regarding a personal SWOT analysis. If you have any questions or suggestions don’t hesitate to mention them in the comments. Your feedback is what keeps us going :-). And keep us in mind whenever you need a SWOT analysis tool.

More Example Templates

• Grab Taxi SWOT Analysis
• Anytime Fitness SWOT Analysis
• SWOT Analysis of ESPN
• Etsy SWOT Analysis
• SWOT Analysis – No Child Left Behind
• New SWOT Analysis of a Session Musician

SWOT analysis is used across industries to measure Strengths, Weaknesses, Opportunities and Threats 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.

Why Use SWOT Analysis?

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 Humphrey 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.

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.

How to Use SWOT Analysis Technique Effectively

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

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 templates.

You can modify any of those templates online using our SWOT analysis software. 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 Political, Economic, Social and Technological factors. Sometimes it’s referred as PESTLE analysis with Legal and Environmental 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.

Who Needs/Creates SWOT Diagrams

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.

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.

Different Uses of SWOT Diagrams

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.

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 make better decisions. As always if you have any question feel free to ask them in the comments.

When planning a project it is important to learn about the internal and external factors that can affect the project. There are some excellent strategic planning methods that you can use analyze all these factors. SWOT analysis and PEST analysis are two of the most frequently used planning methods. Below is a brief introduction to both methods and a comparison of SWOT analysis and PEST analysis.

What is SWOT Analysis?

SWOT, when broken down simply means analyzing the:

• Strengths – The advantages you have over the competition concerning this project.
• Weaknesses – The disadvantages you have internally compared with your competitors.
• Opportunities – Current external trends which are waiting to be taken advantage of.
• Threats – External movements which may cause a problem and have a negative impact on your business.

Sometimes SWOT is referred to as SLOT, where weaknesses are names as liabilities. By working through each of these points it is possible to identify any internal disadvantages or advantages which could benefit or hinder the outcome of a planned project. In addition to evaluating the state internally, this method is also able to identify the external factors which could also make a difference to the success or failure of a project.

You can easily create SWOT diagrams using our diagramming tool. Or you can use our SWOT analysis templates to get started instantly.

Click here for more SWOT analysis templates by Creately >>

Using the Information

By knowing this information it can be possible to plan a successful project that is ready to work around certain problems effectively and to avoid failure. It is a good idea and excellent practice to work through the SWOT Analysis with your team in the early stages of project planning. Brainstorming is a great way of introducing all the relevant internal and external factors for each section of the analysis.

What is PEST Analysis?

PEST stands for the analysis of the external factors which are beneficial when conducting research before beginning a new project or to help conduct market research. These factors are:

• Political – Laws, global issues, legislation and regulations which may have an effect on your business either immediately or in the future.
• Economic – Taxes, interest rates, inflation, the stock markets and consumer confidence all need to be taken into account.
• Social – The changes in lifestyle and buying trends, media, major events, ethics, advertising and publicity factors.
• Technological – Innovations, access to technology, licensing and patents, manufacturing, research funding, global communications.

Pest can also be known as PESTLE which includes other factors such as:

• Legal – Legislation which has been proposed and may come into effect and any passed legislations.
• Environmental – Environmental issues either locally or globally and their social and political factors.

Unlike SWOT this strategy is more directly aimed at the external macro environmental factors that might be affecting the position of your business, the reasons behind growth or decline in the market and also identify new directions for the business as a whole. Creately has some excellent PEST analysis templates for you to get started instantly. Best of all you can use our PEST Analysis Tool to draw them.

Related Reading: SWOT analysis vs GAP analysis

Comparing SWOT Analysis Vs PEST Analysis

Directly comparing SWOT vs PEST is probably the wrong thing to do. They are both planning methods that give tremendous insights for you to successfully execute projects.

The disadvantage of PESTLE analysis is it doesn’t consider the internal factors of your organization. It deeply analyzed the external factors that might affect your project or organization. So if you plan your projects based only on the PEST analysis you will not have a chance to match your strengths to a current need.

SWOT analysis considers both the internal and external factors. It captures the external factors in the opportunities and threats section. However, when creating a SWOT diagram a deep analysis of external factors are not performed. At least not as extensively as a PEST analysis. So you might miss out on external factors that can benefit your project.

So a better approach would be to perform an extensive PEST analysis and use that finding in the opportunities and threats section in the SWOT analysis.

Working as a Team for the Benefit of a Project

When teams are not in the same building it can be difficult to get together and brainstorm effectively about a project. This could lead to vital information getting neglected, thus damaging the project. You can easily avoid this issue by using the collaboration facilities provided by Creately. The project manager can start drawing the SWOT and PEST analysis and invite another team member to contribute to the diagram. This makes it easier for all relevant departments and team members to contribute. It reduces the possibility of important information being missed.

The results which have been recorded on your Creately SWOT template can then be used to plan a project carefully and overcoming problems which could cause significant issues to the positive outcome of the project. Being prepared for all eventualities is vital in business, which is why SWOT and PEST analysis is so important.

Remember it is never enough to simply have the information to hand, what is vital is the way that the analysis is used in order to boost profits, make sure a project is successful and to identify areas of opportunity which could transform the business for the better.

References

Pestle and Swot Analysis [Accessed 23/02/12]