The SWOT analysis is one of the most common tools used by a product manager to audit the strengths, weaknesses, opportunities, and threats facing their product. While a SWOT analysis may lack the depth of other tools, it can become a crucial first step in linking together a product strategy to real market conditions. The shorter period of time needed to complete the analysis and its collaborative nature also make it a great practice for teams seeking a common understanding.
Elements of SWOT
Not very surprisingly, SWOT is an acronym for strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are intended to be internally-focused sections of the analysis, while opportunities and threats are more external and market focused.
- Strengths: These refer to internal abilities, both tangible and intangible, that provide a distinct benefit in the marketplace. Strengths can be found all areas of the organization, e.g. marketing, finance, customer support.
- Weaknesses: On the other hand, organizational or product traits that hold back your success can be listed here. This is not a location to list personal complaints, but rather to highlight areas that can be addressed.
- Opportunities: This list highlights environmental factors that a firm can benefit from if acted upon within a selected timeframe. Some examples of this could be a changing demographic or regulatory change that an existing product line is well-positioned to take advantage of.
- Threats: These are changes to the external environment that hold the potential to cause harm to a firm or product line. These factors are typically not directly controllable and must be managed as risks.
Typically, the final results of a SWOT analysis is presented as a single square with four quadrants or as four columns. See below for an example of the four quadrants.
Things to Remember
While arguments can be made for focusing on internal factors first, it’s recommend to start with the external portions of a SWOT analysis. This will force the product manager to first identify and define market conditions before attempting to isolate relevant strengths and weaknesses.
A SWOT is not meant to be a long list of every item uncovered during the analysis. To minimize list bloat, it’s useful to focus on observations that repeatedly arise during the investigation. It can also help to shorten the time frame to be as close to the present as possible so as to minimize over-stating threats far in the future versus those that are more immediate.
If possible, use a small team to do the analysis. SWOTs can become extremely subjective if done by only one person. Input from other functional areas will help to offset biases, as well as highlight areas that may be missed by some team members.
Don’t make one pass through the investigation and call it complete. It helps to go through each section multiple times as new information is discovered. A strength could easily highlight a new opportunity and vice-versa.
The results of a SWOT is not the end of the process. A traditional SWOT will not define relative priority of each item within a quadrant, nor the relative importance of items across quadrants. Similarly, it can also be difficult to convey differences between existing opportunities and threats versus future ones. It’s important then to use the results as a staging ground for further study.
Learning More
Beginning an analysis using a simple SWOT can be an effective method for starting the right conversations on the future of firms and product lines. If you’d like to learn more about SWOT and how Box Parker can help, please contact us for a free consultation.
