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Clayton Wehner
Clayton Wehner

What is a SWOT analysis?

Posted on July 17, 2016May 22, 2020 by Clayton Wehner

I’ve just finished watching the latest series of Silicon Valley (series 3) on Foxtel.  It’s an extremely funny comedy about a tech startup company in Silicon Valley and I recommend that you take a look.

In Season 2, the earnest and often-disrespected Jared Dunn proposes that the team undertake a SWOT analysis to help evaluate an important decision. Despite being roundly derided for his suggestion, Jared does a good job of explaining SWOT to the team – take a look here in this YouTube video. He must have made an impression because the team is seen using his SWOT method at a later juncture in the show (main picture above)

SWOT is a fairly simple, but powerful, business tool – it’s an acronym that stands for Strengths, Weaknesses, Opportunities and Threats.  A SWOT is typically used to help assess the viability of a new project or business venture.

Strengths and Weaknesses are internal to the organisation and represent the organisation’s organic capabilities to successfully implement the proposed project or business venture.

Opportunities and Threats are external to the organisation and are prevalent in the environment in which the proposed project or business venture must operate and compete.

A SWOT analysis is best developed in a group setting. A SWOT is great as a team brainstorming activity because it helps capture the widest range of possible views and it provides all staff with an opportunity to participate in the strategy formulation process. In this regard, a SWOT helps achieve ‘buy in’ from staff for a new initiative or direction.

A typical way to use SWOT in a group setting is as follows:

  1. The facilitator explains the SWOT acronym to the group using a diagram on a white board (often the board is divided into the four quadrants – S-W-O-T)
  2. The facilitator runs a quick example SWOT with the group (perhaps from an unrelated industry)
  3. The facilitator breaks the group into small teams and, in a designated timeframe, each team is asked to produce a SWOT for the project or business venture in question.
  4. When time is up, each team contributes their points verbally to the facilitator, who writes each on the white board.
  5. The group discusses the various weaknesses and threats, and identifies countervailing strengths and weaknesses.

So next time you need to weigh up the pros and cons of a decision, as Jared would say: ‘Well, you can! Because now you have the tools.’

Although you may have noticed in the video that Jared incorrectly categorises a ‘strength’ at the end of the video: ‘People love condors’. Being a factor external to his organisation, this should have been categorised as an ‘opportunity’. Ultimately, though, it’s about getting everything out on the table!

  • business
  • swot
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