What is the current state of your business? SWOT Analysis is the most popular and widespread strategic tool to help businesses look at their current situation from all sides. This is also referred to as situational analysis. One of the reasons the SWOT Analysis has been so popular is that it achieves three things incredibly well:
It focuses on internal and controllable factors with strengths and weaknesses
It forces you to look at external factors that are typically out of your control to understand what additional opportunities might present themselves or threats that must be mitigated
Lastly, it is easy for everyone to perform a SWOT Analysis leveraging the simple 4x4 matrix design and the built in questions around strengths, weaknesses, opportunities, and threats.
Every leadership team should perform a “State of Our Business” SWOT Analysis at least annually and ideally quarterly as part of the quarterly planning process. This will keep your team on track and focused on the top priorities and objectives that align with maximizing “opportunities” and mitigating “threats”.
5 steps on how to perform a “State of Our Business” SWOT Analysis
Identify your primary business objective? Essentially what do you want to achieve and why? This sets the context for the business SWOT Analysis and should be the basis for considering your strengths, weaknesses, opportunities, and threats.
Based on your business objective, what are your key business strengths? Where do you have an advantage over the competition - features, price, people, patents, etc? What is driving your business forward today?
Based on your business objective, what are they key factors that are holding you back that you can control. What doesn’t your product do that it should do - feature gaps for example? What processes or policies are leading to friction and inefficiencies? What people issues are setting you back?
Based on your business objective and looking at external factors such as new laws, new technologies, new trends in behavior, pricing changes, competitive changes - where do you have an opportunity to expand, grow, accel? How could you leverage a current strength and turn this into a new opportunity for the business? How can you look at an untapped area in the market and recognize a new opportunity?
Based on your business objective, what external factors such as changes to social norms, new technologies, political changes, economic changes, as well as, competitive changes must you be focused on overcoming in order to protect your business. A Threat could be a killer feature a competitor is leveraging to win your customers or a new pricing model that is undercutting your value proposition. A new technology that might change the way businesses use or need your product. A new law that could impact where you can do business.
As you can see in the exercise above, requiring your team to perform a quarterly, semi-annual, or annual SWOT Analysis will be critical to understanding your current situation, or state of your business, and what you must do to protect it and improve it, and where you have opportunities to create significant and focused growth. It breaks you out of your current one dimensional thinking that can drive quarterly OKRs and strategic plans and forces a four dimensional approach to having complete awareness of your situation.
We recommend performing a business SWOT Analysis in the first week of the third month of each quarter. This then provides time for leaders to incorporate their SWOT Analysis business analysis into smart quarterly goals or OKRs that the entire team can execute against to grow the business and stay ahead of the competition.