SWOT Analysis
A key function of leadership is to position the company such that it continues to meet stakeholder needs into the future. Strategic and tactical planning should therefore occur in the context of good information about:
- The existing capabilities of the organisation – its current strengths and weaknesses, and
- The external environment, and the opportunities and threats that it brings to the business.
This is what a SWOT (Strengths-Weaknesses-Opportunities-Threats) analysis is about. SWOT Analysis involves researching and analysing the internal and external factors affecting current and future success, and using this to make better decisions.
In terms of the external environment, this analysis should consider and anticipate:
- The industry life cycle and how this affects profitability.
- Trends and uncertainties in economic drivers of performance.
- Changes in customer needs and preferences.
- New business or partnering opportunities.
- Changes to workforce availability, skill requirements, and demographics.
- Technology developments.
- Changes affecting supply and demand for your product or service.
- Risk of business disruption.
- Changes in regulatory requirements
- Changes in social or community expectations.
- Competitor actions.
From an internal perspective, the process should consider:
- Key revenue & cost drivers in the business.
- Current and future capabilities of processes and people.
- Internal risks to business continuity or profitability.