Instructions for the Advanced SWOT Analysis Template
This page provides the instructions for using the Advanced SWOT Analysis Template.
Before you use this template on an actual strategic planning project, we carefully review all the steps in order to become familiar with the analysis process.
If you haven’t downloaded the template yet, you can do that here.
The Concept of Strategic Competencies
First of all, this advanced SWOT analysis does not use the basic “strengths”. Instead, it is more meaningful to think in terms of strategic competencies to define what the firm is really good at relative to the competition.
What is a strategic competency?
- A combination of skills, knowledge, proprietary processes, tools, experience, know-how, etc.
- Something that’s valuable to the customer
- It differentiates the company from the competition
- Something that’s difficult for the competition to acquire or copy
- It can be applied to more than one market
Define The Building Blocks of The Strategic Competencies
Remember, a strategic competency is a combination of skills, experience, processes, knowledge, tools, etc. This means that to define the strategic competencies, these elements need to be identified first. These are the building blocks of the strategic competencies.
Think of everything that your company does, how it’s done, and break it down into its individual activities, processes, knowledge, experience, etc. For example, CAD skills, engineering skills, material processing experience, access to a key supplier, a state-of-the-art inventory control system, an experienced marketing team.
Next, rate these elements on a 3, 5, or 10 point scale. The higher the rating, the more important an activity is to your firm’s performance. These ratings help to select the most important elements that will be used in the next step: formulating the strategic competencies.
Combine The Building Blocks to Create Strategic Competencies
Now that core skills, processes, proprietary tools, knowledge, etc., have been identified, we can combine these elements to define the strategic competencies.
Think about how those elements go together, creating synergy, to create an activity or process that’s directly related to what and how you deliver your products and services to your customers.
Next, rate each of the core activities on how and to what extent they contribute to a particular strategy competency. The higher the rating, the more a particular strategic competency is supported by that element. Keep in mind that not every element plays a role in each and every strategic competency.
Evaluate The Strategic Competencies
Next, we need to find out how significant these strategic competencies actually are by evaluating them based on the definition of strategic competencies. By using a 3, 5, or 10 point scale, rate how well each strategic competency satisfies each of the criteria.
This exercise helps you to identify the most significant strategic competencies of your firm. These are the “strengths” to leverage in the marketplace.
Define and Rate The External Opportunities
Next, write down the external opportunities in the marketplace that look interesting for the future growth of your business.
Keep in mind only to list external opportunities, such as new markets, joint ventures, new technology, etc. Any internal initiatives for growth should not be included.
Rate these opportunities on their anticipated upside potential, taking into consideration the resources required to pursue them. You can use a 3, 5, or 10 point scale. The higher the rating, the strong the opportunity.
Next, record the internal weaknesses of your organization. These are those areas that have a negative impact on performance and how well the firm functions. You don’t have to list all the internal weaknesses, just the ones that are most significant.
You can use a 3, 5, or 10 point rating. The higher the rating, the stronger the negative impact of that weakness.
For a first evaluation you can use a 3 point scale, similar to a Low-Medium-High rating. Later on, if you need more nuance in the analysis, you can switch to a 5 or 10 point scale.
You should always anticipate key events or developments in the near- and mid-term that threaten the survival and growth of your business. These are the external threats to the business.
These threats could include an economic downturn, new technology, new legislation, competitor activity, to name a few.
Define and rate these external threats using a 3, 5, or 10 point scale. The higher the rating, the more significant the threat is to your firm’s survival and growth.
Match Up Strategic Competencies & Opportunities
So far, defining internal and external factors in the blank SWOT analysis template has been pretty similar to the traditional SWOT.
On the next worksheet, you’ll start connecting the dots between the 4 elements of the SWOT. This is where the benefits of the advanced SWOT analysis template start becoming clear.
This worksheet is used to define and rate the relationships between Strategic Competencies and External Opportunities. Essentially, it helps you figure out how each strategic competency improves the firm’s ability to pursue a particular opportunity.
Keep in mind that not every competency will play a role in pursuing each opportunity. Be thoughtful in matching up only those strategic competencies and external opportunities that go together.
Rate the relevance of a strategic competency for the pursuit of a particular opportunity on a 3, 5, or 10 point scale. The higher the number, the higher its relevance.
The worksheet provides insight into your most significant and powerful strategic competencies as well as how your ability to go after new growth opportunities relies on some or all of your firm’s strategic competencies.
You’ll get more insight into which opportunities are within reach and which ones could be beyond your capabilities.
Strategic Competencies & Threats
On this worksheet we’ll look at the relationship between strategic competencies and the threats your firm may be facing.
On a 3, 5, or 10 point scale, rate the seriousness of each threat relative to the protection provided by a strategic competency. In other words, the higher the number, the weaker the strategic competency protects against or mitigates a particular threat.
Weaknesses & Opportunities
Similar to the previous worksheet, but now you’re looking at the relationships between internal weaknesses and opportunities.
Using a 3, 5, or 10 point scale, rate how each weakness jeopardizes your firm’s ability to successfully pursue an opportunity. The higher the number, the more serious the impact of the weakness on your ability to pursue a particular opportunity.
Weaknesses & Threats
Here you look at how each company’s weakness leaves you exposed to the external threats defined earlier.
Use a 3, 5, or 10 point scale to indicate the seriousness of the company’s weakness. The higher the number, the more serious the weakness.
Connecting the dots between strengths, weaknesses, opportunities, and threats provides considerably more insight than the traditional SWOT matrix. However, you have to put in the effort.
The best way to learn about this SWOT template is to start using it. Hopefully, the explanation provided here helps you to get started.
If you have any questions about the template, need help with the SWOT template, or if you have suggestions for improving the template, please contact us.