Every product manager has to do a SWOT analysis at some point in his or her career. The only trouble is that they’re often so few and far between that no one ever really gets very good at doing them. This is generally not a big deal, as a SWOT analysis is pretty easy to do, but doing a few simple things will make your SWOT documents a lot more effective.
SWOT =
Strengths
Weaknesses
Opportunities
Threats
First, on the SWOT elements: strengths and weaknesses should reflect internal characteristics. Opportunities and threats are external or environmental.
So, for example, a lack of customers is not a weakness, unless there are no customers buying any product like yours. “Lack of market” is a threat, “lack of market penetration” is a weakness. Try to focus on issues that are clearly internal or external in origin. Choosing “it’s nobody’s fault” types of issues doesn’t make for a compelling SWOT.
Once you have identified a few clear issues in each category you can begin the really important part of the SWOT analysis. Early in my career I just made a list in each category and left it at that. No conclusions, no recommendations. Not surprisingly, I didn’t see SWOT as having a lot of value. After doing numerous SWOT analyses in school I started to see the value of a more thorough job.
The real value comes when you make a matrix and compare your strengths and weaknesses against opportunities and threats:
So see how you can use your strengths to exploit opportunities and offset strengths. Look for areas to avoid by seeing where threats attack your weaknesses and see where you need to improve weaknesses to take advantage of opportunities.
It’s this second level of analysis that really brings out useful recommendations and an action plan from SWOT analysis.