Directors’ Briefing Strategy
SWOT analysis looks at your strengths and • Many businesses find a consultant most
weaknesses, and the opportunities and useful for their first SWOT analysis. See
threats your business faces. Using a consultant.
By focusing on the key factors affecting your 1.2 Brainstorm the issues. Ask everyone
business, now and in the future, a SWOT to identify any strengths or weaknesses
analysis provides a clear basis for examining they feel the business has, and any
your business performance and prospects. opportunities or threats they think the
This briefing outlines:
• Encourage participants to make
• Typical strengths, weaknesses, suggestions without trying to judge how
opportunities and threats, and how to important the issue is.
identify them. • Concentrate especially on identifying
• How to use SWOT analysis to drive your weaknesses and threats.
business forward. • Be aware that lack of honesty is a common
For example, most people find it easier
1 Self-analysis to identify strengths and opportunities,
particularly if the performance of key
Use SWOT analysis as part of a regular process
of reviewing your business performance.
You may also want to carry out a SWOT
analysis in preparation for raising finance or
before bringing in consultants to review your
1.1 Decide who to involve.
• Key participants are likely to include
the managing director and heads of
Involving others will give a fuller picture
and help to gain their commitment to the
Find out what customers think using a
customer satisfaction survey.
• Consider bringing in sympathetic outsiders
who know your business and market (eg
customers and suppliers).
England Updated 01/07/06
Directors’ Briefing 2
people (including yourself) is one of the There is no point holding regular
weaknesses. SWOT analyses if they do not result in
• You may want to use checklists to prompt action.
further suggestions (see 2, 3, 4 and 5). • Set out what will be done to address
• Organise related ideas into groups. weaknesses, capitalise on opportunities
Recording suggestions on Post-it notes and deal with threats (see 6).
or cards that can be moved around and This includes the steps to be taken,
rearranged makes this easy. the personnel who will be involved, the Listing strengths,
timeframes and the budget. weaknesses,
1.3 Evaluate the significance of the issues that • Involve key personnel in drawing up the opportunities
have been identified. action plan to get their commitment. and threats is
To help you, use relevant data from your only a first step.
own and similar businesses (see box). 1.5 Keep the SWOT analysis and action The real value of
plan to hand for review before important SWOT analysis
• Update your conclusions from any previous decisions. comes from
SWOT analysis. thinking through
For example, a strength may no longer • For example, as a reminder of what you
exist (eg if last year’s cutting edge product should be looking for when recruiting a new of what you have
is now obsolete). employee. uncovered.
• Assess whether your strengths (or Jim McLaughlin,
weaknesses) give your business a Optima
significant competitive advantage 2 Strengths
For example, your strong research and Your strengths are usually easy to identify,
development programme is useless unless through your continuing dialogue with
you have the resources to exploit the customers and suppliers. Your records (eg
results. sales) will also help to indicate areas where
Do not be surprised if certain factors crop you are particularly strong (eg rising sales for a
up as both a strength and a weakness. particular product).
1.4 Create a simple, clear action plan. For most businesses, strengths will fall into four
Putting it in context 2.1 Sound finances may give you advantages
over your competitors.
Too often, a SWOT analysis is based on Important factors might include:
unrealistic and unfounded assumptions. To
maximise the effectiveness of the process, • Positive cashflow.
find out as much about your market as • Growing turnover and profitability.
possible and justify conclusions with relevant • Skilled financial management, good credit
data. control and few bad debts.
• A strong balance sheet. A regular SWOT
A Get in-house information from your • Access to extensive credit, a strong credit analysis by different
business records and personnel. rating, and a good relationship with the members of the
bank and other sources of finance. management team
• For example, ask sales people what allows all the key
they know about market facts and 2.2 Marketing may be the key to your issues to be kept
figures. success. under review, and
For example, your business may enjoy: produces different
B Get data on your competitors. perspectives on the
• Market leadership in a profitable niche. business.
• Read company reports, trade • A good reputation and a strong brand Rob Collinson,
magazines and industry research carried name. Allery Scotts
out by relevant trade organisations. • An established customer base.
• A strong product range.
C Do your own market research. See • Effective research and development, use of
Research for your marketing. design and innovation.
• A skilled salesforce.
D Consider using specialist consultants • Thorough after sales service.
to supply comparative data on • Protected intellectual property (eg
businesses similar to your own. registered designs, patented products).
Directors’ Briefing 3
2.3 Management and personnel skills and • Failure to delegate and train successors. ➨ Compare both
systems may provide equally important • Expertise and control locked up in a few strengths and
underpinnings for success. key personnel. weaknesses by
These may include factors such as: • Inability to take outside advice. benchmarking key
• High staff turnover. areas with those in
• Management strength in depth. other businesses.
• The ability to make quick decisions. 3.4 Inefficient production, premises and plant See
• Skilled employees, successful recruitment, can undermine any business, however hard Benchmarking.
and effective training and development. people work.
• Good motivation and morale. Typical problems include:
• Efficient administration.
• Poor location and shabby premises.
2.4 Strengths in production may include the • Outdated equipment, high cost production
right premises and plant, and good sources and low productivity.
of materials or sub-assemblies. • Long leases tying the business to
You may benefit from: unsuitable premises or equipment.
• Inefficient processes.
• Modern, low-cost production facilities.
• Spare production capacity.
• A good location. 4 Opportunities Run in
• Effective purchasing and good relationships tandem with
with suppliers. External changes provide opportunities that SWOT analyses,
well managed businesses can turn to their benchmarking is
Be aware that strengths are not always what advantage. an excellent way
they seem. Strengths may imply weaknesses of getting objective
(for example, market leaders are often 4.1 Changes involving organisations and
evidence of your
complacent and bureaucratic) and often imply individuals which directly affect your own strengths and
threats (for example, your star salesman may business may open up completely new weaknesses.
be a strength — until he resigns). possibilities. For example: Derek Burn,
• Deterioration in a competitor’s performance, Consulting Group
3 Weaknesses or the insolvency of a competitor.
• Improved access to potential new
Your weaknesses are often known but ignored. customers and markets (eg overseas).
A SWOT analysis should be the starting point • Increased sales to existing customers, or
for tackling underperformance in your business new leads gained through them.
(see 6.2). • The development of new distribution
channels (eg the Internet).
3.1 Poor financial management may result in • Improved supply arrangements, such as
situations where: just-in-time supply or outsourcing non-core
• Insufficient funds are available for • The opportunity to recruit a key employee
investment in new plant or product from a competitor.
development. • The introduction of financial backers who You can do
• All available security, including personal are keen to fund expansion. a SWOT on
assets and guarantees, is already pledged each product or
for existing borrowings. 4.2 The broader business environment may service, on each
• Poor credit control leads to unpredictable shift in your favour. This may be caused by: market, on your
cashflow. management team
• Political, legislative or regulatory change. or on a proposed
3.2 Lack of marketing focus may lead to: For example, a change in legislation that partnership. It’s a
requires customers to purchase a product. versatile tool that
• Unresponsive attitudes to customer • Economic trends.
requirements. For example, falling interest rates reducing analysis on any
• A limited or outdated product range. the cost of capital. point of focus.
• Complacency and a failure to innovate. • Social developments. Jim McLaughlin,
• Over-reliance on a few customers. For example, demographic changes or Optima
changing consumer requirements leading to
3.3 Management and personnel weaknesses an increase in demand for your products.
are often hard to recognise, except with • New technology.
hindsight. Familiar examples are: For example, new materials, processes and