SWOT Analysis Example and What to Do Next

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SWOT is a popular analysis technique in strategic planning, often characterized by the use of a 2×2 matrix to visualize the outcomes. SWOT, which stands for Strengths, Weaknesses, Opportunities and Threats, dates back to the 1960s.

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SWOT analysis example

The below is an example of a SWOT analysis 2×2 matrix, starring wooden toy company RedYabber as they prepare to embark upon a digital transformation journey.*

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With SWOT, it’s good practice to describe strengths and weaknesses from an internal perspective and opportunities and threats from an external perspective. In the above example, the internal strength and weaknesses are about the RedYabber culture, values, workforce and product. The external opportunities and threats are about the market and competitors.

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The pros and cons of SWOT

Good analysis of the strengths, weaknesses, opportunities and threats is useful input to the strategic planning process, but it should not represent the only perspective. It’s just one of many techniques that can provide input to the development of a strategic vision, strategic goals or plans.

SWOT is versatile and applicable to any situation – not just in strategic planning. It can be used to analyze a business, function, project, problem, or almost anything. However, there are limitations:

• It is a point-in-time view and cannot show how things change over time.
• The lists may not be complete, as they are typically derived from “brainstorming” sessions and there is no way to test for coverage.
• There is no indication of options and priorities.

The 2×2 matrix is useful for developing a quick view of the business or situational context, and RedYabber’s SWOT analysis example above does just this. It’s a good technique to help everyone gain a common understanding of the state of being.

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How to do a SWOT analysis

SWOT helps with your understanding – but so what?

When formulating a way forward, whether that is a strategic plan, project plan, change plan, product plan or problem resolution plan, you need more than just a point-in-time view of the strengths, weaknesses, opportunities and threats. You need to be able to translate it all into a way forward: a roadmap. This is a concept described clearly by Simon Wardley, the creator of Wardley Maps, in his book On Being Lost.

It’s not uncommon to see organizations analyzing their strengths, weaknesses, opportunities and threats for a situation and then, based on the output of this, start formulating and executing a set of initiatives they believe will address the situation. But what’s the best way to approach this?

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Integrating SWOT with your strategic planning process

So, how do you take your analysis to the next level and turn it into something actionable?

We mentioned above that you ultimately need a roadmap for your strategy, and SWOT is just one possible input to the development of such a roadmap. Over years of consulting work, the Jibility team has developed the most simple and effective methodology to translate your goals into a substantiated roadmap.

This methodology involves only six steps: Challenges, Objectives, Capabilities, Actions, Initiatives and Roadmap. The Challenges and Objectives steps help you understand the why; the Capabilities and Actions steps help you analyze the what; and the Initiatives and Roadmap steps enable you to visualize the how.

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We have a separate article that describes these six steps in more detail. For understanding where SWOT fits in, we’re only going to talk about the Challenges step here.

We define “challenges” as the set of problems or opportunities that must be addressed in order to achieve your strategic vision or goals. When it comes to building a roadmap, it’s essential that you have a clear understanding of the core challenges that you need to solve right at the beginning. This is so that you can be sure that your content and priorities in all of the following steps are aligned.

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How to interpret and use a SWOT analysis

An analysis of the strengths, weaknesses, opportunities and threats is a good technique for understanding your situational context, and the output from it is valuable to help with the formulation of your list of challenges.

Doing this is very straight forward. Weaknesses and threats are usually expressed as problems, and these should be added to your challenge list as-is. If a weakness or threat is not articulated as a problem, then consider describing it with words like “lack of”, “inadequate”, “poor” and so on.

Strengths and opportunities are not usually articulated as problems, but they could result in a problem if not addressed. Generally, the challenges are that you must “maintain” your strengths and “seize” or “target” your opportunities.

Looking at RedYabber’s SWOT analysis example, the strengths, weaknesses, opportunities and threats can be translated into the following challenges:

• Maintain a great company culture founded on solid values.
• Maintain a committed workforce.
• Maintain a very high-quality product.
• Business is not adaptive to change.
• Aging workforce: difficult to retain specialist knowledge and skills.
• Production is labour intensive, slow and costly.
• Children have lower attention spans and are easily bored with simple toys.
• Children have lots of options.
• Competitors can erode market share if product IP not protected and cannot innovate fast enough.
• Target parents looking for ways to engage their children away from mobile phones.
• Target sophisticated wooden toys with a blend of technology and tradition for a strong market differentiator.
• Target shift from local to a global market through digital marketing and online sales.

You may find that simply translating your SWOT items into a list of challenges will result in a long list, and it’s unrealistic that you can address everything. It’s good practice to prioritize your challenges – highest priority at the top – and draw the line at around seven.

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Taking our RedYabber challenges, this is what our top seven could look like:

1. Production is labour intensive, slow and costly.
2. Competitors can erode market share if product IP not protected and cannot innovate fast enough.
3. Target shift from local to global market through digital marketing and online sales.
4. Target sophisticated wooden toys with a blend of technology and tradition is a strong market differentiator.
5. Maintain a committed workforce.
6. Maintain a very high quality product.
7. Business is not adaptive to change.

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From here, you would follow the remaining five steps to translate your challenges into a substantiated set of initiatives and a roadmap delivering them. In this way, you’ve turned your SWOT analysis into something that will truly help you reach your strategic goals.

Follow RedYabber’s development of a strategic roadmap through all six steps (with a different set of challenges) in our digital transformation roadmap example.