Lesson 2. Gathering Business Insights

Lesson 2 - Table of Contents

Learning Objectives

The first part of building an Action Oriented SWOT is to complete a SWOT analysis.   After completing this lesson, you will be able to do the following:

  • Generate a SWOT analysis based on your organizations strengths, weaknesses, opportunities, and threats
  • Cite 3 sources each of customer, market, and competitive insights
  • Distinguish between a Strength and an Opportunity
  • Distinguish between an Opportunity and a Threat

Steps for Performing a SWOT Analysis

The Action Oriented SWOT builds off of the traditional SWOT analysis.  So, it is essential to master the SWOT analysis first before advancing to the upgraded version.  The SWOT analysis framework has gained widespread acceptance because of its simplicity and power in assessing current state.  A SWOT analysis can be used to help you to accomplish the following (Olsen, 2021) – “Focus on your strengths. Shore up your weaknesses. Capitalize on your opportunities. Recognize your threats”.  Pitfalls commonly encountered when creating a SWOT analysis should be avoided.  View to the video below to learn more about common mistakes made when conducting a SWOT analysis.  Note:  Refer to Recommended Content section below first if you need to familiarize yourself with this tool. 

Video 2. Top 5 Mistakes Made While Doing a SWOT Analysis

Business Insights for a SWOT Analysis

Just like any planning tool, a SWOT analysis is only as good as the information that makes it up. Conducting a ‘clean’ analysis with clear results is critical. Research and accurate data is vital.   In this section, we will go more in-depth on how questions to ask yourself and means of finding those answers when generating business insights for the SWOT analysis. 

A SWOT analysis is a framework that consists of Strengths, Weaknesses, Opportunities, and Threats.  These are typically arranged in a matrix with the Internal Factors (Strengths and Weaknesses) in a row and External Factors (Opportunities and Threats) in the 2nd row as shown.  Click on each hotspot to learn more about each.

Figure 2. SWOT Framework with Hotspots

Internal Environment - Strengths & Weaknesses

Internal factors are strengths and weaknesses.  These factors are within a company’s ability to influence. Strengths and weaknesses may include:
  • Brand identity
  • Company culture
  • Staff
  • Geological locations
  • Packaging
  • Partnerships

External Environment - Opportunities and Threats

External factors in SWOT analysis are opportunities and threats.  These factors are out of a company’s control and require planning to address the repercussions. Opportunities and threats include:
  • Economy
  • Market size
  • Buying behaviors
  • Trends
  • Weather
  • Government regulations

Distinguishing SWOT Traits

Internal factors - customer/competitor considerations

The Internal Analysis of strengths and weaknesses focuses on internal factors that give an organization certain advantages and disadvantages over the competition in meeting the needs of its target market. Strengths are only meaningful when they assist the firm in meeting customer needs, so only those strengths that relate to satisfying a customer need should be considered true core competencies. Similarly, weaknesses should also be examined from a customer perspective because customers often perceive weaknesses that a company cannot see.  So, when assessing internal factors, we are considering what we do better than the competitions and its impact on the customer.

External factors - customer/competitor considerations

The External Analysis takes a look at the opportunities and threats existing in your organization’s environment.  An analysis of external factors affecting a company includes a customer, competitive, market, and environmental analysis.   So, just as internal factors consider customers and competitors, so does an external analysis of opportunities and threats.

Distinguishing between internal and external factors

So then, how do we distinguish between Strengths and Opportunities and Weakness and Threats? According to Olsen, 2021, the key to “differentiating between strengths/weaknesses and opportunities/threats is to ask this essential question: Would this be an issue if the organization didn’t exist? If yes, it is an issue that is external to the organization.” For example, let’s say that a competitor launches a successful new game-changing technology that is rapidly gaining in market share.  Does this represent a market threat?  Or does this competitive success reflect as a weakness in your company’s ability to quickly launch new products?    Consider your answer to this question and decide based on whether this represents an external market threat or an internal company weakness.

Complete Your SWOT

Read the table below for best practices for completing your SWOT analysis.

Finalize Your SWOT Analysis

  • Look at other examples. If you haven’t done so already, take a look at a few completed SWOT reports so you know what yours should look like. Here are a few SWOT examples you can look at.

  • Use bullet points. Everything listed in your analysis should be in a bulleted format. You don’t need complete sentences.

  • Boil down each point. Each bullet point should be short—a few words will do. If you need to, simplify your points.

  • Refine your information. If you came up with a healthy list for each of your strengths, weaknesses, opportunities, and threats, it’s time to refine the information. Check for redundancies, combine bullets where necessary, and eliminate any information that isn’t vital.

  • Prioritize your information. It’s time to go through each section and rank the information. Put the most important or pressing item on top of each square.

Recommended Content

What is a SWOT, what are the benefits, and how it used? 
How to (and how not to) conduct a SWOT analysis
Examples

Exercises

Exercise 2.1  SWOT Matching Quiz

Exercise 2.2  Generate a SWOT Analysis

Use answers to questions to populate a Traditional SWOT Analysis with strengths, weaknesses, opportunities, and threats.  Then comment on the following:
  • What did you learn about your organization as a result of this exercise?
  • What are your key takeaways regarding the SWOT analysis and its use for business strategies, projects, or key initiatives?

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Title: Lesson 2. Gathering Business Insights