Strategic Planning and SWOT Analysis

hello and thank you for joining this collaborative dynamics mini lecture on strategic planning using SWAT so in this mini lecture I'm going to cover a few different things with you I'm going to talk about the importance of strategy and planning within organizations particularly from a management perspective I'm going to identify the components that make up a SWOT analysis and then finally discuss the importance of SWOT in the strategic planning process so if we think about the role of managers within an organization the role of a manager is to take resources all of the resources that they're responsible for and turn that into performance for the organization and those resources aren't simply human resources such as the people that report to them but can also consist of financial resources so it could be in the form of a budget that you have to manage it could be in the form of revenue that's coming into the organization additionally you may also be responsible for some physical resources such as a building a plan some form of property that you have to manage in order to be successful in order to manage your business effectively additionally we have technology resources such as information technology data on the physical computers themselves the hardware that exists that runs your IT infrastructure could also be resources that you're responsible for and then finally various forms of equipment that are needed in order for your organization to function if you're in manufacturing this could be forklifts if you're in an office this could be desks and photo copiers and Printers and things along those lines so all of those different resources have to come together and we have to plan and align those resources correctly in order to achieve the results that we want for the organization and this could be in the form of revenue it could be in the form of shareholder value or really any other measure man that the organization has for determining performance or measuring the performance of the organization so as it relates to strategic planning the role of the strategic planning as it relates to management is to define what the path is what's the roadmap in order to make that happen what are some of the initiatives that we have to take up as an organization what are the different things that we should stop doing should we enter new markets should we pull out of different markets should we change our marketing strategy all of these things come out of strategic planning and helps to define how we need to align those resources in order to achieve the organizational performance and SWOT analysis is just one form of analysis that's used within the strategic planning process the SWOT consists of four different things each of which is really taking a look at your organization from a little bit of a different perspective so what we're doing with the SWOT analysis is we're analyzing our organization or even a piece of our organization and determining what the strengths are the weaknesses the opportunities in the threats that exist for our organization by doing this this helps us understand what are we doing well what are we not doing so well what's going on in the industry are within our larger environment that we need to pay attention to that may provide opportunities for us to be more effective or that may threaten our ability to be as effective so all of this provides a comprehensive look at how your organization is performing and maybe some insights into what you can be doing well or what you should continue to do in the future strengths let's think about what some of the questions that you can ask as a manager in order to assess what your strengths are so as a manager you can simply ask what does the organization do well what you do well as an organization that really adds significant value for you if you're a company like Zappos for instance you may be very very good at delivering excellent customer service so that's something that you really really do well in a core strength of yours an organization if you're a company like Toyota for instance then your strengths may very well be manufacturing a quality product very efficiently just Toyota is known for high quality they're known for efficiency we think about lean and Six Sigma a lot of those things that were developed in part by Toyota that's something that they do very very well so think about what is it that you do really really well as an organization and add those to your strengths what types of unique experience or knowledge does the organization possess do you have some very specific knowledge assets within the organization this could be in the form of people you may have the absolute best trained people to do the work that your organization does if you are a research organization you may have the best scientists in the world working on your products if you're a company like GE they're a global research division probably adds this as a strength of theirs that they have this very very broad and deep knowledge in so many different subjects that that's really a core strength of theirs this could all be out to be in the form of information technology especially as we think about organizations today and the amount of information technology that they collect from individuals and their customers and prospective customers really the more we know about our customers and about our environment the more of a strength that is for us so if an organization has significant information resources or information knowledge that can be a huge strength for them as an organization what geographic advantages does the organization possess for instance if you are a very large national organization do you have a lot of locations across across the country if you think McDonald's for instance McDonald's the strength of theirs is they have this huge global presence they have thousands of restaurants all over the world that's a huge geographic advantage for them and would be very difficult for another competitor to be able to replicate very easily what's the organization's reputation or ratings in the industry so not only what do you do well what do other people as doing well so for instance if you're a large organization do you have JD Power and Associates Awards are there other industry awards that exist if you're a reseller of some type of a product or service do are you a gold member or a diamond member or whatnot that sort of demonstrates your reputation we're rating within the industry so it's important to list those things out to help identify really what are your core strengths but also what are people recognizing you for as your core strengths and then finally are there any unique characteristics about your organization and this could be in the form of your product so do you have a very very unique product that nobody offers do you have sort of a very distinctive niche within the or within the industry that nobody else has been able to replicate even do you have a lot of patents that might prevent other companies from being able to enter your market and become one of your competitors could also be in the form of your culture some organizations have very very distinctive cultures such as the give company like Google or Apple has very very distinctive cultures within their organization that is really a strength of theirs that they can leverage from a strategic planning perspective so next if we think about our weaknesses so kind of the the opposite of what our strengths are we can ask ourselves some questions as managers to determine what some of those weaknesses are so what does the organization need to improve upon if you look at your financials if you look at your key metrics that you track as an organization if you look at your standing within the industry where do you need to improve do you have issues with quality do you have issues with customer satisfaction do you have issues with a new organization of turnover so do you have an issue of being able to retain the talent that you're hiring as an organization so think about all of those things and have a very honest look at it's very easy to talk about our strengths but let's be very honest about what our weaknesses are as an organization and make sure that we're identifying those things that we need to improve upon are there financial challenges that exist within the organization because those very often are weaknesses for us are we too highly leveraged meaning do we do we have too much debt as an organization that we're taking on do we not have enough shareholders invested in the organization that can create financial challenges and being able to raise capital for the organization in order to expand are you going through a bankruptcy is there a pending lawsuit that's going on very large lawsuit that's going to create financial challenges for you so thinking about from a financial standpoint take a look at your financial statements and and whatnot to try to figure out where some of those issues might lie does he is does the organization have a bad reputation so is there a bad press that's been going out about your organization in the news are there other types of things that are causing you to maybe not have a very good reputation again if you have very high turnover then that might translate into customer satisfaction and your overall reputation as a business so be very honest about what your reputation is within the organization and define is that a strength of yours or is it a weakness are there any gaps in geography that will create a limitation or an issue for you so for instance if we look at McDonald's as an example again McDonald's is a very large global organization which is a strength for them that they're very very large but there are geographical gaps that exist that limp that will limit their ability to expand into other areas of particularly emerging markets so there may be gaps in geography that might exist and the same is true potentially for a very small franchise organization that's trying to grow they don't have maybe the geographical dispersity that a company like McDonald's or Burger King or Subway might have and being able to compete so we should think about what some of those some of those geographical gaps that exist and not just nationally but also internationally you think about where you want to grow as an organization or where you need to grow as an organization are their geographical gaps and being able to have a presence in emerging markets such as India or China or in Europe or in Africa or South America so think a little bit beyond the United States and really look at where some of those gee graphic gaps might exist are the right people in the right job so do you have the right employees particularly the right leaders doing the right jobs that'll help drive the organization forward it's not the nuts a weakness for you how strong is your management team do you have a management team that are leaders that are able to drive change or are they really more managers that are just kind of keeping the work going and what do you need is an organization do you have the right mix of people doing the right jobs the right capacity of leadership within your organization in order to achieve what you want to achieve and then are your employees engaged or motivated if you have very low employee engagement or high turnover or motivational types of issues within your organization that's going to translate into a weakness for you and you should be again very honest about that next let's think about the opportunities that exist for us as an organization and let's take a look at some of the questions that we can ask as a manager are there opportunities for partnerships or alliances maybe some type of a joint venture with another organization that might help strengthen our ability to do what we want to do as an organization this could be in the form of not just creating a new business but you may just partner with another business it could be a charity it could be another for-profit organization in order to help further your organization's mission and vision what are the industry trends that you could take advantage of is there something coming along in the industry that you can pick up on and that you could implement that will help create an opportunity for you and add a strength for you as an organization what new products are in development that you could create that you can take advantage of so if we think about product development and releasing new products you know are you able to put a product in the market or is there a new product that you should be putting into the market that will create an opportunity for you for additional growth additional market share and whatnot how can you work to reduce cost so what opportunities exist to become more efficient as an organization whether it's driving down labor costs whether it's reducing waste or reducing or improving quality within your organization what are some of those opportunities that exist to improve the efficiency of your organization and reduce costs how can you become more nimble and flexible as an organization so can you reduce some of the bureaucracy are there processes that don't make sense or processes that maybe make it more difficult for you to service your customers effectively or do work as effectively so how can you reduce some of that in order to become a more flexible organization an organization that's able to change more effectively as we all know business has changed constantly and the success of an organization in part will be determined upon how well you're able to change how able you are to adapt to changes in the industry and then are there any other new markets that you could enter if we look at emerging markets which a lot of organizations are moving into what types of markets are you able to move into in order to help you grow as an organization and then finally let's take a look at threats so questions we can ask to determine or identify what our threats are as an organization maybe seasonality so is there a seasonality of our organization that may cause a threat for us so how do we create an opportunity for that as well right so if we think of the inverse how do we take that threat and create an opportunity can we build a product that helps smooth out our revenue so that we're not as affected by the seasonality of our business companies that make most of their money for instance in the wintertime or around Christmastime are very very affected by the economy and people being able to spend money on Christmas if I'm if I'm a landscaper and I snow a snow plow driveways in the wintertime it's very seasonal in my ability to make money is going to be dependent upon it snowing so if it isn't snow then I'm not going to make as much money so that's how seasonality can impact our businesses do certain major customers contribute a large percentage of our revenue so if we look at our customers are there certain customers that could be threats to us or our competitors could be threats because if we lose those customers then that could make up a significant portion of our business and if we lose that business and that's a big loss for us as an organization so do you have those major customers that contribute to a large percentage of revenue what is the forecast of your cost are your raw material cost or transportation costs all the costs that you incur as an organization in order to manufacture your product where are those trending are they going up are they going down if energy costs are projected to go up then that creates a threat for you as an organization that you then need to address how is technology changing and are you able to keep up with the pace of that technology that's changing if you are not able to do that then that creates a threat for you as an organization because you may not be as efficient you may not be able to do some of the things that an organization or a competitor that has adopted that technology is able to do and then how strong are your competitors if you take a look at your competitors within the market what do they look like are they are they really emerging you have a lot of larger competitors than you are you a number two or number three within your market take a look at those competitors and even do a SWOT analysis on them and see how they compare to you and then finally what what is changing within the environment so if we think about environmental changes think about the economy think about other forces that exist political forces regulatory forces that exist how are all of those different environmental factors changing and what threat does that create to me as an organization if I'm trying to expand my business into say emerging markets but we know that some of those emerging markets there may be some geopolitical issues going on that may be a threat for me as an organization if I'm trying to expand into Russia for instance and their sanctions being placed on Russia what does that do to my business and what type of a threat does that pose so it's important to understand not just what's going on within your organization your competitors but also a little bit broader and think about some of those larger environmental issues as the economy and politics and regulations and determine what at what of those types of issues creates threats for you as an organization so what do we know so now we know that strategic planning is important for organizations to make decisions on how to utilize their resources in order to achieve their organizational goals so they're really creating that path of that roadmap to achieving their organizational goals and SWOT analysis is a strategic planning tool that organizations can use to identify their strengths their weaknesses opportunities and threats and this is really just one tool that managers can use alongside other tools such as Porter's five forces analysis there's PESTEL analysis Workforce Planning financial planning all of these different tools can be used and can come together in order to help the organization develop a comprehensive strategic plan which is ultimately the goal here ultimately the goal of strategic planning is creating that roadmap of how we're going to take our resources and turn them into performance for the organization so all of these different tools are important and sois is just one of those tools that we can use so I want to thank you for taking the time to review this collaborative dynamics mini-lecture you can stay in touch with me online at collaborative dynamics org you can find me Mike ashram on LinkedIn or you can send me an email @ MP trauma gmail.com so thanks everybody for listening to this collaborative dynamics mini lecture we're together we're getting things done

Channel: Collaborative Dynamics

Views: 158,258

Rating: 4.8406639 out of 5

Keywords: SWOT, Collaborative Dynamics, Bishop House, Management, Leadership, Strategic Planning, Strategy, Planning

Id: VTH_WsyoEeM

Length: 19min 10sec (1150 seconds)

Published: Tue Jan 13 2015