SWOT analysis: Why you should perform one, especially during times of uncertainty

swot-analysis:-why-you-should-perform-one,-especially-during-times-of-uncertainty

Understanding what your company does and doesn’t do well is an important part of developing a long-term, sustainable business strategy.

Image: marekuliasz, Getty Images/iStockphoto

SWOT analysis is a technique that can help determine your company’s strengths and weaknesses, even during times of uncertainty. Knowing where your company stands is the best way to move it forward. 

SEE: Return to work: What the new normal will look like post-pandemic (free PDF) (TechRepublic)

 

During times of economic crisis, conducting a SWOT analysis might seem unimportant. But the opposite is true. It can help you weather storms with more confidence and clarity. No matter the situation, knowledge of your company and its position in the world is the best step toward success. 

What is a SWOT analysis?

A SWOT analysis is a technique that helps companies assess their Strengths, Weaknesses, Opportunities, and Threats (SWOT). During times of crisis, SWOT analysis can become one of your company’s greatest tools for survival. This common technique is used by companies across all industries to assess what they’re good at, where they need to improve, where their competitors have an advantage, and where opportunities may exist. Before identifying potential opportunities or threats, it’s always a good idea to know your areas of strength and weakness.

Evaluating strengths and weaknesses

Your company’s strengths or weaknesses can be tangible or intangible. Strengths and weaknesses can be anything from your company’s product features or service quality, pricing strategy, or customer service, to the availability of supplies, resources, or market share. It could be tied to your company’s reputation, its delivery methods and timing, or its leadership.

Identifying opportunities and threats

Potential opportunities or perceived threats could be internal or external. Opportunities might exist in innovative technologies or as a result of your internal talent. Threats or risks might surface due to increased competition or environmental factors that impede the production or delivery of products or services. 

SEE: How to perform a GAP analysis and why you should (TechRepublic)

Due to the ever-changing business climate and environmental factors, your company should conduct a SWOT analysis annually—at the very least. Today’s climate has given us a glaring example of why SWOT analysis is essential. As an example, during the COVID-19 pandemic, the food production and distribution industries have been drastically affected. This has created both threats and opportunities for many food-related wholesalers and retailers. It’s created opportunities for revenue growth among online food delivery platforms. This demand for online grocery platforms has, in turn, generated risks for food suppliers and restaurants unwilling or unable to develop an online presence. 

Why should your company perform a SWOT analysis during a crisis?

If your company is going to develop a sustainable advantage, it will need to first know where its strengths, weaknesses, opportunities, and threats exist. Without conducting a SWOT analysis, your company is flying blind and could be wasting precious resources and time on activities that propel it in the wrong direction.

Conducting a SWOT analysis is particularly important during times of crisis and uncertainty. Since the COVID-19 pandemic began, many companies and industries have had to revisit their SWOT analysis as a result of internal and external factors outside of their control. As a result of the pandemic impact, industries like travel and tourism, restaurants, entertainment, and many others have been forced to devise ways to address new risks and reevaluate new opportunities.

SEE: How to cultivate an inclusive workplace for LGBTQ employees (free PDF) (TechRepublic)

Conducting a SWOT analysis helps your leadership team gain a clear view of what your company is doing well compared with its competitors and where it needs to pull up its socks. It also helps shine a light on areas where potential opportunities exist and where risks may reside. 

Having a solid understanding of all of these areas identifies your current state and increases your company’s visibility into how to best allocate its budget, resources, time, and effort. Ultimately, SWOT analysis provides the insight needed to make the necessary changes that ensure everything and everyone is working toward the same desired goals—with minimal waste.

Conducting a SWOT analysis during uncertainty

A SWOT analysis takes time and can be tricky during times of concern—especially during temporary and unknown crisis situations like a global pandemic. Barry Pruitt, a consultant with Rhythm Systems, said on the company’s blog that using a crisis management tool like Crisis SWOT (cSWOT) is essential to ensuring “healthy decision-making capability and communication rhythm in your company during trying times.” He said it’s essential to apply the cSWOT approach to four distinct business scorecard (BSC) categories:

  • Customers
  • Employees
  • Revenue
  • Processes

Conduct a pandemic SWOT analysis at least once a week, and make sure to communicate the next steps to each of the applicable stakeholders. Uncertainty is no time to drop the ball. Conducting a cSWOT analysis increases the chance that your company will be able to get through a crisis and emerge stronger in the end.

Executive Briefing Newsletter

Discover the secrets to IT leadership success with these tips on project management, budgets, and dealing with day-to-day challenges.
Delivered Tuesdays and Thursdays



Sign up today

Also see

How to perform a GAP analysis and why you should

how-to-perform-a-gap-analysis-and-why-you-should

A GAP analysis can let you know where your company is struggling and help you move in the right direction.

Image: z_wei, Getty Images/iStockphoto

How can you know if your business is performing as expected? One reliable way is perform a GAP analysis.

If your company is looking for a way to evaluate its current processes and make improvements that help achieve desired business goals, performing a GAP Analysis may be the answer. 

SEE: Budget planning tool (TechRepublic Premium)

What is GAP analysis?

A GAP analysis is a method of comparing the actual business performance to a desired level of performance and can relate to business processes, policies, projects, or other metrics. GAP analysis helps your company identify whether its business needs are being met. GAP stands for Good, Average, Poor, or the possible outcomes of the analysis. 

Why is GAP analysis important?

Before your company can determine what needs to change, it has to develop a clear understanding of the current state of things. Without this understanding, your company can’t be certain that things have changed, where things have changed, or how any changes make a difference. 

3 reasons your company should perform a GAP analysis

GAP analysis gives your leadership team increased visibility into its entire operations and how well each area is working to meet objectives. Once initiated, it helps your company better meet its business goals by identifying areas like the following three, where deficiencies might exist.

1. Product or service gaps

Being able to identify potential areas for product or service improvements opens up opportunities that may not have existed before. These opportunities translate into increased profitability and help your company become more competitive. This is even more important during times of uncertainty. As an example, the personal safety or personal protective equipment (PPE) market is estimated at $6 billion and increasing in demand. During COVID-19, many businesses around the world like Flowfold, Eddie Bauer, Outdoor Ranch, DaleBoot, and others identified PPE gaps and seized upon opportunities to develop products for hospital and frontline workers. 

SEE: Video teleconferencing do’s and don’ts (free PDF) (TechRepublic)

2. Operational gaps

Gap analysis is well-known for helping companies improve performance in areas like finance, human resources, marketing, innovation, IT, sales, education, engineering, and more. Recently during the COVID-19 disruption, supply chain and logistics are areas that have also experienced significant operational gaps. Companies that performed gap analysis were more likely to survive the disruption while those that didn’t may have found themselves at risk of not surviving the pandemic. 

SEE: Inside UPS: The logistics company’s never-ending digital transformation (free PDF) (TechRepublic)

3. Talent gaps

Another challenge most companies, regardless of industry, faced during the pandemic was talent shortages. Performing a GAP analysis allows your company to identify where employees are needed the most. It ensures your hiring practices meet your demand and allows you to shift talent to the right areas. Without talent gap analysis, most companies are likely to struggle to deliver on their products or services. 

How to perform a GAP analysis 

Effective GAP analysis takes time and relies on closely following these steps.

Identify and document your company’s current state

To do this, your company will need to identify, gather, and document all relevant information about its current business processes. Key types of information might include procedures, resources used, participants, and current technologies. It’s a good idea to walk through each process to ensure nothing gets missed. Often there are many steps and many sources of information that just become intuitive, and some of the steps or materials can easily slip through the cracks.  

SEE: How to perform a qualitative risk analysis (TechRepublic) 

Determine your company’s desired state 

Whether it’s about improving your company’s processes, technologies, or policies, your company has to determine what its desired state should look like. This is about setting end goals that help your company achieve optimal results. 

Identify any gaps between your current and desired state

Determining where potential gaps exist relies on performing an analysis of the two states. This will involve mapping the two states and identifying where the gaps exist between the two. Gaps may be in the processes, your people or other resources, vendor capabilities, technologies that your company uses, or other areas. At the end of the analysis, the gaps are the areas where potential improvement opportunities exist. Once your company bridges these gaps, it will be able to achieve its desired goals.  

SEE: How to write a solid project management plan in 5 quick steps (TechRepublic)

Measure and monitor success

Making changes isn’t enough. As changes to your company’s internal and external environment take place, it’s also important to monitor performance. Some external changes might be tax, legal, regulatory, client, or vendor changes, while internal changes might involve your talent pool, management views, or policies. Your company will need to identify the right key performance indicators (KPIs) to measure performance. Depending on where the changes have been made, some metrics might focus on human resources, marketing, customer, financial, or other types of performance. As internal or external factors change, there will be a need to develop and implement corrective actions to ensure the current state still meets your company’s desired goals. 

Executive Briefing Newsletter

Discover the secrets to IT leadership success with these tips on project management, budgets, and dealing with day-to-day challenges.
Delivered Tuesdays and Thursdays



Sign up today

Also see