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Six Steps to a Strategic Situation Analysis with SWOT

Creating a Company Strategy: The Challenge

Jack, a new senior vice president, had been tasked with preparing a situation analysis report that senior management would use to help form company strategy. Since Jack had never contributed to company strategy before, he reviewed his predecessor’s analysis. He discovered that the previous year’s report did not capture the information that senior management would need, nor did it include a way to present that information in a manner that management could use to create a clear strategy. Additionally, the analysis did not reflect his team’s capabilities or ideas.

It became apparent to Jack that his predecessor hadn’t used the situation analysis report as an opportunity to create a collaborative exercise that involved all the team members. This explained something else he had observed when he had taken over: his team didn’t know anything about the previous situation analysis and had no idea how it had contributed to the company’s strategy. Not surprisingly, his team felt disconnected from the company’s current strategy and goals.

Assessing the Situation

Jack realized the necessity of acquiring tools to elicit and articulate his team’s contributions and also present them effectively to management, otherwise it was unlikely that his input would be incorporated into the company’s strategic plans. Without that input, Jack’s team would lack the focus, commitment and buy-in essential to the success of any strategic overhaul. And, if the process didn’t motivate and energize his subordinates, involvement in preparing the report would be viewed as one more task imposed on them that would negatively impact their day-to-day responsibilities.

The Solution: The Six-Step SWOT Analysis

The team adopted the SWOT Analysis framework as part of a series of collaborative work sessions that would effectively prepare their current situation analysis report. SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities and Threats involved in a project or business venture, indicating where opportunities and risk should be pursued, where certain threats or risks should be avoided, and if resources are allocated properly. With my help, Jack implemented the following six-step process:

Step 1. Organize Teams of Four to Six Individuals

Once the teams are divided, designate a facilitation team that will be responsible for orchestrating the multiple meetings of the other teams, including coordinating the logistics (meeting rooms, pens, flip charts, etc.) for the meetings.

Step 2. Provide Pre-work to Prepare the Participants

Create detailed event information and send the package to meeting participants in advance. Include listings of all the meetings, agendas for each of those meetings, and the purpose and objectives of the process. Recommend document sources that staff can use to augment their individual thoughts on internal and external factors influencing the business (e.g., analyst observations on industry environment, reports on macroeconomic conditions, market segmentation data, internal performance metrics). Ask participants to group key factors under categories that you provide (e.g., resources, competencies, managerial deficiencies, inadequately skilled resources). This prompts the participants to identify broader categories that specific factors fall into.

Step 3. Conduct Round-robin Meetings to Collect Input on Internal Factors

A facilitator for each team will ask each participant to provide a list of internal factors. Write the internal factors on individual sticky notes or 3×5 cards and place them so they are displayed clearly. Group the factors that enhance the company’s situation under Strengths and those that weaken the situation and competitive position under Weaknesses. Facilitate a discussion that generates more factors, deepens understandings of the factors and uncovers relationships between them. Record the results of these discussions on the related notes or cards.

Step 4. Conduct Round-robin Meetings to Collect Ideas on External Factors

Have the teams repeat the round-robin exercise looking at external factors. Group these under the headings of Threats and Opportunities. Threats are those factors that are possibly detrimental to the organization’s competitive position in the marketplace; opportunities are factors that enhance the company’s position. Make it clear that some factors can appear on more than one list. For example, an opportunity can also be interpreted as a threat (if, for example, the opportunity is seized by a competitor).

Step 5. Vote on Top Strengths, Weaknesses, Threats and Opportunities

Collate the lists from the individual teams and put them in a central location where all of the teams can review them. Schedule a time for participants to vote on the top three strengths, weaknesses, opportunities and threats.

Step 6. Prioritize Strategic Alternatives

Have the teams brainstorm, using the “top three” lists created in the previous steps. For each opportunity, have participants identify the company’s relevant strengths and weaknesses. Repeat the process for each threat, identifying the strengths that the company can use to defend itself from the threats and the weaknesses that leave the company exposed. When the company has corresponding strengths and few weaknesses, this opportunity should be pursued vigorously. On the other hand, the company should consider exiting those areas where it has many threats and many weaknesses (especially if the threats target the company’s weaknesses). Where it makes sense for the company to stay in threatened areas, the teams should recommend how existing strengths can be redeployed or acquired. Where there are opportunities worth pursuing, but the company lacks strengths, recommendations can be prepared that include partnering with other organizations or acquiring the necessary skills or resources through other means.

Final Assessment

Jack personally orchestrated the process, setting up a series of half-day work sessions that involved his direct reports and several members of the functional areas reporting to him. He had the groups use SWOT analysis as a key job aid in their work sessions, supported by facilitators who understood the process. Jack also brought in outside facilitators to elicit objective opinions and discussions.

The teams, which in previous years dreaded the paperwork demanded in creating a situation analysis, were now energized by the interactive work sessions. Furthermore, they left the meetings feeling their ideas would be used in the strategic plan that the corporation adopted and that any resulting strategy was going to be their strategy. They weren’t disappointed, either. Because the resulting report summarized key factors and tied them directly to strategic alternatives, the document had a significant impact on the development of the company’s strategic plan.

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Ramana Metlapalli is author of Learning Tree Course 252, “Strategic Planning for Organizational Success”. Ramana specializes in advising high-technology companies on their strategic initiatives. Learning Tree International is a world leader in hands-on training for Management and Technology Professionals. Since 1974, over two million course participants from over 65,000 organizations around the world have enhanced their skills through intensive hands-on exercises under the guidance of expert instructors with real-world experience. Visit us at