Many people do not know how to properly do a SWOT analysis. Unfortunately, that is why this relatively basic tool is often overlooked, even in the business world. There are even CEOs that thought badly of it, but came around and now swear by it after reevaluating and realizing they were using it wrong! In this post, we want to help you make an effective SWOT analysis for your EIC proposal. Making the most out of this simple tool, so that your business may grow and succeed, as well as your proposal be successful, if you’re submitting one.
A SWOT analysis is one of the most well-known tools for business and strategic planning. It focuses on internal and external factors of a business, divided between positive and negative aspects. Positive aspects are categorized as Strengths and Opportunities, while negative aspects include Weaknesses and Threats. Strengths and Weakness are internal aspects, while Opportunities and Threats are external aspects, hence the SWOT acronym.
It’s a popular business analysis but often misunderstood. People often see Opportunities as future projects instead of current improvements.
Filling a SWOT Matrix
While there are only four quadrants, you can fill out an effective SWOT analysis in various ways. The most usual way fills the quadrants in the order the acronym presents them: Strengths, Weaknesses, Opportunities and Threats. This order leads people to think of internal aspects of the project first. Filling the SWOT matrix in this way, however, has garnered growing criticism, mainly from specialists that defend that thinking of the internal aspects of the project first can lead to shortsightedness and an inability to see the bigger picture.
These critics defend that the matrix should be instead filled starting with aspects external to the project, mattering not if Opportunities or Threats are done first, to foster seeing the bigger picture and then focusing on the internal aspects. That way, the project views its surroundings first, enabling the observation of its specific characteristics. However, filling out the SWOT matrix depends on personal preference.
It is also important to try and be specific when filling out a SWOT matrix. Avoid one- or two-word descriptions, as they are too vague and not appropriate for a proper analysis. For instance, the word “price” could be put into every quadrant, each with a different meaning, but bringing no clarity to the analysis. “Price” as a Strength could be a low product sales price, as a Threat it could be competitors’ prices or their ability to leverage their prices to undercut your company and so on. Concise, descriptive bullet points play a crucial role in a lean yet effective SWOT analysis that can be expanded later.
Strength
As already mentioned, Strengths are internal positives aspects of your project. Meaning they are your projects strong points, even if you don’t take the eco-system into consideration. They can be things like high-quality products, skilled staff, proprietary technologies, a strong brand, among others.
Strengths are within your control and give you an advantage. Examples include economic processes with patented safety, a reputable CEO, and low production costs.
Weaknesses
Weaknesses are internal issues that hinder or lag behind competitors. Tackling them can be challenging, but it drives improvement.
Weaknesses may include high turnover, poor internal communication, resource constraints, product vulnerabilities, and more. In both Strengths and Weaknesses, control is vital. For instance, “Our product is exclusive to one retail chain, while competitors offer it in three or more.” Another example: “Our video platform lacks space for short-form content, a growing market segment. Our slim profit margin might impact price competitiveness.”
Opportunities
They are positive external factors to your project/company, that could allow it to grow, expand or otherwise make its position stronger. They are not possible projects, but instead are more like beneficial circumstances. For instance, if new legislation mandates an environmental certification, an opportunity arises by already possessing that certification, providing a first-mover advantage in the market segment.
Opportunities include market gaps, emerging markets, positive media, and partnerships. Examples: “Pie tins used as flying disks,” “partnerships with local colleges,” “environmental concern boosts electric car manufacturing.”
Threats
External factors, such as regulatory changes, negative media coverage, supply chain disruptions, natural disasters, and emerging competition, can negatively impact a project or company. For instance, lithium shortages may hinder the production of EV batteries. Growing environmental concerns could force the discontinuation of plastic products, especially straws, bags, and bottles. Location in Japan makes a nuclear power plant highly vulnerable to earthquakes and tsunamis. Additionally, initial customer excitement about a virtual reality segment may wane, potentially lowering the company’s stock value.
Cross-analyzing Quadrant Data
For an effective SWOT analysis, this is it. However, for a EIC proposal, you will need to do additional analyses by cross-analyzing different quadrants of the SWOT analysis on Phase 2. These analyses consist of four questions, each connecting an internal and an external aspect. Of course, it might not be feasible to relate all bullet points of a quadrant to all aspects of a different quadrant. In that case, matching or relating them whenever possible is advisable.
The four questions that will guide the analyses are:
To which extent your Strengths will enable you to seize these Opportunities?
To which extent your Strengths will enable you to resist to these Threats?
To which extent your Weaknesses will impede you to seize these Opportunities?
To which extent your Weaknesses will exacerbate the consequences of these Threats?
Some possible answers to individual cases are:
“Our award-winning marketing team(Strength) will enable us to quickly develop and release marketing campaigns on our app’s short video capabilities, reaching this market segment while it is still emerging (Opportunity) and taking full advantage of the low competition environment before other competitors can join the market.”
“Our highly effective and patent-protected processes(Strength) will help us resist emerging competition in our market segment (Threat), as the processes they develop will not be effective without much previous R&D.”
“Our high turnover rate is a weakness. It could hinder us from capitalizing on the expected market segment growth (Opportunity). This is because much time would be spent on training and onboarding, diverting focus from our core product.”
“Our need for highly qualified experts is a weakness. It can lead to problems when new, well-funded competitors enter the market. Employee poaching is a threat. The extensive training required for our experts could be wasted if they are poached, harming our market performance.”
SWOT Takeaways
It is fundamental to note that a SWOT analysis’ quality will improve according to the intimacy of the one who performs it with the business/project. Ideally, a team of key staff should be employed to perform at least the brainstorming that precedes the SWOT analysis. It is a very versatile tool, that can be very useful if used right and lends itself to other variations, like analyzing Opportunities and Threats in relation to competitors Strengths and Weaknesses.
While knowing how to use it properly could be a challenge, we hope this guide can clarify its use for our readers. If you followed us this far, your effective SWOT analysis and follow-up questions for the EIC proposal should be ready to go, however if you want help with you EIC grant proposal, do an evaluation!
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