How to do a (good) SWOT analysis

I’m a fan of SWOT analysis. When I discovered how effective it was for deciding which path to take, I started doing a SWOT analysis for everything in my life. Although it's often disregarded and abandoned by many marketing departments and business planners, it has been and will continue to be one of the most important strategic tools.

SWOT analysis is a strategic tool that helps organizations identify their strengths, weaknesses, opportunities, and threats to make important business development and marketing decisions. Examples of companies using SWOT analysis:

Microsoft used SWOT analysis during its transition from being a software-centric company to a cloud-first, mobile-first business model.
Amazon applied a SWOT analysis to evaluate its dominance in e-commerce and potential market expansions.
Starbucks used SWOT analysis to assess its international expansion and brand loyalty strategies.
Apple used SWOT analysis to evaluate its product innovation and market competitiveness.

Steps to create a SWOT

Step 1: Define who will participate in creating the SWOT.

What works best for me is starting it myself and then modifying it with input from other people in the organization. This depends on the size of the company, but typically, you should include:

Strategic marketing management (the one leading it).
Product management.
Sales management (or, if unavailable, the person who sells similar products).
The management team (CEO), especially if it’s a small company.
An external consultant (to provide an objective perspective) who reviews the SWOT when it's complete.

You could include more people, depending on the specifics of the product or the company. And don't skimp on inviting them for a good coffee to get their attention and some of their time: it's worth it.

Step 2: Define the 4 key areas of the SWOT and organize them into 4 quadrants.

That is, talk to all those people to help you identify the following:

Strengths (S): List the internal strengths of the organization, the product, or whatever you’re trying to decide. For example, having a large client portfolio.
Opportunities (O): Identify the external opportunities the organization can leverage. For example, no competitors in the market.
Weaknesses (W): Analyze the internal areas that need improvement. For example, not having qualified staff.
Threats (T): Examine external factors that could pose challenges. For example, the classic, armed conflicts that could affect the business.

Once that's clear, we move on to work with the 4 variants in the form of SO, WO, ST, WT (explained below). The fundamental idea behind this matrix is to create strategies that identify internal and external conditions and combine these variables to produce practical actions. Each combination reflects a different type of strategy.

Step 3: Divide the paper into four quadrants and label each as SO, WO, ST, and WT.

SO (Strengths-Opportunities): Strategies that use strengths to exploit opportunities. Growth and leveraging strategies.
WO (Weaknesses-Opportunities): Strategies that overcome weaknesses by taking advantage of opportunities. Improvement and corrective strategies.
ST (Strengths-Threats): Strategies that use strengths to address threats. Protection and mitigation strategies.
WT (Weaknesses-Threats): Strategies that seek to minimize weaknesses and confront threats. Defensive strategies to minimize the impact of threats and weaknesses.

Here, we’ll have a list of strategies and areas for improvement that can help us decide whether to launch the new product or business with relative confidence or feasibility.

Step 4: Radar-style SWOT Analysis (you can skip this step, but it will look nice to your boss)

Draw a circle and divide it into 10 sections representing the scale of the Strengths, Opportunities, Weaknesses, and Threats.
Assign a value to each section on a scale from 1 to 10 to visualize the importance of each aspect.

Here, we can conduct both an optimistic and a pessimistic analysis.

Not clear? Download the real case, and you’ll see it more clearly.!

Step 5. Dynamic SWOT Analysis (ideally, but not always needed)

Dynamic SWOT Analysis allows us to continuously adjust and update an organization’s strategies according to internal and external changes, optimizing real-time decision-making. This is ideal, especially for tech companies with a strong focus on digital marketing, as we need to change products and marketing strategies relatively easily for them to be effective.

Conduct the analysis periodically (every 3 to 6 months) to adapt to changes in the business environment.
Adjust strategies according to the evolution of the organization and its environment.

Don't panic! Here, I explain how to do a dynamic SWOT analysis.

That's it! And remember my mantra: without a strategy, there won't be good execution. Take the time you need for that SWOT... slow marketing, my friend!