- Your company has just identified a problem that needs to be solved, and you have been assigned to the team that has been tasked with finding a solution. Once you and your team members are certain you understand the exact problem, then the purpose of the investigation will be to solve that problem, and a purpose statement will evolve. As with any business project or problem, a structured planning method needs to be established. Creating a SWOT analysis can be a beneficial first step in identifying a company's strengths, weaknesses, opportunities, and threats.
Albert Humphrey of the Stanford Research Institute in the late 1960s, recognized the importance of looking at a company's internal and external environments to help solve business problems. The SWOT analysis was born. The internal factors are a company's strengths and weaknesses, the first two parts of the SWOT, and the OT, the opportunities and threats, are the external factors. This SWOT analysis can help the team look at the big picture as it begins on its task of developing a detailed recommendation action plan.
First, look at the company's strengths. For example, where has it been successful? In what areas does the company have advantages over competitors? What does it do well? What makes customers repeat customers? Next, look at the company's weaknesses. What recent failures have occurred? Why do customers not return? What is the company's turnover rate? Have marketing techniques not changed in the last five years? After the internal factors have been examined, then look at the external environment, the last two parts of the SWOT analysis, those opportunities and threats.
For the opportunities quadrant, analyze areas that have been only minimally explored or completely untapped. Are expansion opportunities available? Can the brand be improved? Could more innovative advertising channels be used? Are opportunities for cause marketing available? Then finally, the external threats need to be analyzed. Are more competitors on the horizon? Are business tax breaks being eliminated? Will the stagnant economy continue? In what areas are competitors doing better with niche marketing? As the four areas are developed, probing questions need to be asked.
The answers will help generate ideas as the team focuses on finding a solution for its problem. The SWOT preparers may find that a factor may be both a strength and a weakness. For example, not afraid to take risks could be listed as a strength. On the other hand, taking risks could also be seen as a weakness. It should be listed in both categories. Preparing a SWOT is just one step, although an important step, in helping the report writers develop a strategic recommendation plan for the problem being investigated.
Seeing a company's strengths, weaknesses, opportunities, and threats identified in this tangible form can help identify and clarify what changes can be or should be implemented. Some preliminary research may need to be done concurrently, to help identify, for example, what competitors are planning to do, how shopping patterns of various demographics are predicted to change, and upcoming government business changes. As potential solutions begin to emerge from the SWOT analysis, more in depth research will continue.
Not only should the report project have a pre-SWOT analysis, a post-SWOT can also be a useful tool to help support the report's recommendations. If your recommendations are implemented, what additional strengths will the company have? Which of the weaknesses will be eliminated? Will new weaknesses result? What opportunities did you exploit? Will the recommendations change any of the threats or create new ones? Threats is probably the area that you will see the least change, because what competitors and the economy do are usually beyond your company's control.
Both the pre- and post-SWOTs should be included in the report's appendix for the reader's review. The SWOT can be prepared in a variety of formats. Use your company's template, if one is available. If not, multiple examples are available online. Here are the pre- and post-SWOTs for our sample recommendation report.
- Differentiate between formal and informal reports.
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