Success of a business depends on coordinating many attributes, both internal and external for business process improvements. You can not hope to rely on just your science or intellectual property to maintain a successful business. You must also monitor factors that you can not control such as regulations or consumer demand.
What is a SWOT Analysis?
SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats) is a brainstorming tool that can be used in the strategic planning process. Completing a SWOT Analysis is essentially taking a long, hard look at how your idea could become a company. However, a SWOT Analysis could be done at any phase in the development or maintenance of an organization. A SWOT will assess internal and external factors, as well as current and future potential for a small of medium-sized business.
SWOT is a simple, visual tool that does not require a high level of technical knowledge, algorithm, or mastery. To complete a SWOT chart, all you need to know how to do is identify and categorize. Refer to the chart below for the basic layout.
The 2 categories are:
- Internal versus external
- Helpful versus harmful
Factors to Populate SWOT
A SWOT should be done in a group setting with a diverse group of stakeholders. The stakeholders with diversity of opinions and backgrounds will then use facts and data to drive their answers for the SWOT matrix. Having a group with many different views and experiences will help eliminate bias. The point of a SWOT is to look at your business objectives in a data-driven format, not in an emotional way.
If you are a new company, a deep dive into your company or market is essential. Individuals in your organization that take on assignments which give them insight and previous knowledge on the subject should be selected. Gathering people who are already educated can be more helpful than training someone specifically for a SWOT. These group members also need to prepare and do some research before completing a SWOT Analysis. In order to get the best results, it should not be a "spur of the moment" task. The group should set aside a reasonable amount of time such as a 4-hour time block.
Now that we have an idea of what a SWOT is, we can look at the 4 categories and what they mean. Below you can also get a good idea of the types of questions that would be best for each.
The strengths of a company are internal and positive in nature. Strengths typically de-risk a company. In the case of biotech companies, many times they are either very successful or end up with little to show for their hard work. The more strengths a company has, the less risk it will bring. Seems obvious right?
Here are a few questions that could help shape a SWOT discussion about a company’s strengths:
- What are the qualities that could separate you from competitors?
- What types of tangible assets do you have? Intellectual property, capital equipment, proprietary technology, etc.
- What type of internal assets do you have? Knowledgeable staff, IT infrastructure, library access, etc.
- What sources of capital do you have access to? Grants, investors, etc.
- What the potential partnerships or exits?
The weaknesses of a company are internal and negative. As an investment vehicle, biotechnology companies are inherently very risky. Weaknesses inside of your company will increase that risk. Identifying weaknesses early is critical so you are able to course correct.
Below are some questions to ask a SWOT group relating to a company’s weaknesses:
- Are there resource limitations like limited laboratory space?
- Do you have an unclear or basic selling proposition?
- Is the market already crowded?
- Are there things that your competition does better than you?
- Does your company lack anything? (i.e. staff with business acumen)
Opportunities are external and positive. Companies are able to take advantage of opportunities despite the fact that they can not control their timing. Successful organizations will actively look for opportunities instead of waiting for them. If you can take advantage of your opportunities, you can reduce your company’s risks in the long run.
Some questions that you can ask about your company’s possible opportunities are below:
- Is there an emerging need for your product?
- Are there few competitors in the field?
- Has there been an innovation in a related field that can help with the demand for your product?
- Does your competitor have a toxic culture that makes you more attractive for potential talent?
Threats are external factors that are generally negative. Threats will always increase the risk of your venture being unsuccessful despite the fact that you can not control them.
Here are some things to ask yourself when assessing your company’s threats:
- Are there any actions a competitor could take against us that would be considered a treat? (i.e. could they copy your product)
- Have you lost any talent or are you unable to acquire new talent?
- Are there any potential new competitors entering your market?
- Do you need approvals or licenses that could limit your access to certain places?
- Could your trade secrets be leaked to competitors?
- Are there threats that will make us critically vulnerable?
Advantages of a SWOT Analysis
- is data driven, which is a sweet spot for scientists.
- Completing a SWOT Analysis requires you to evaluate your market, your workplace culture, your specific product, and much more.
- Reevaluating and processing this information without bias will make your company better in the long run.
- A SWOT Analysis stimulates critical thinking.
- Not only will you need to gather the data, but you need to analyze what it really means to your company.
- Start thinking as an entrepreneur and an academic.
- A SWOT Analysis won’t cost you anything.
- It costs nothing, but time.
- You can hold it in-house with your current employees or partners.
- A SWOT Analysis is an iterative process.
- SWOT can be used at many points in a company’s lifetime for a number of different products and services.
- SWOT reconciles the vision and the reality for a product.
Steps to Complete a SWOT for a New Business
- Decide on the objective
- Many times, a SWOT is used to decide whether or not something is worth the cost it incurs. This could be cutting ties from a university, putting out a first product, etc.
- The best way to create a useful SWOT is to first research and understand your potential competitors and the industry in general. Only then can you understand how your proposed idea will fit in.
- Who you decide to have in your SWOT group is up to you. But, as outlined earlier, they should be knowledgeable on the product, issue, and diverse in opinions.
- You need to focus on the internal factors first, as you have control over those.
- As markets change and new ideas come about, you should be ready to perform more SWOTs. Reevaluating and adjusting plans is normal for a start-up (or a large company).
- A doctor analogy is appropriate here. When something serious emerges, you can go ahead and address that. But, it is important to have check ups when something seems a little bit off as well. Performing a SWOT shouldn’t be only for emergencies.
A Biotech Example
If this is your first time hearing about SWOT, it may seem confusing to complicated. In order to solidify your understanding, check out the graphic below for a great example. Here is an example for a biotech SWOT. The analysis was performed in order for the company to decide whether or not it should make a peptide viral vaccine for coronavirus.
For this example, the group started with strengths. As you can see, the group outlined all of their anticipated strengths. The keyword is anticipated. They might not know and can not predict everything that will happen when developing a new vaccine. Therefore, you need to reassess your SWOT as you go, for strengths and the other 3 categories. Even if you are not in the field of creating vaccines, you can use this example to understand how a company could complete a SWOT for a general biotechnology company.
SWOTing and Plotting
The simple truth is that you can not just complete a SWOT analysis. They can be incredibly simple and straightforward. In order to garner positive change and be useful, you need to take your SWOT and create a plan of action.
One of the popular methods of turning your SWOT into a plan of action is called ‘matching’. Matching comes from connecting two of the categories. Matching strengths to opportunities shows you areas where you can be aggressive and take action. Matching weaknesses to threats will expose areas you need to work on or things to avoid.
Below is a Confrontation Matrix, which is used to further analyze the output of a SWOT analysis. In this matrix, you can combine each category and realize the importance/relevance of each combination. Listing each category by importance can be helpful when looking for the most pertinent strengths or weaknesses.
A second popular strategy to convert your SWOT into a plan is converting. Now that you have data on the negatives (weaknesses and threats) you can start to convert them into positives. For example, if your staffing is limited, start finding ways to add additional personnel like volunteers or interns. You can also seek partnerships or seek an accelerator to convert threats/weaknesses into opportunities/strengths.
A SWOT analysis is not exclusively reserved for a growing business or new idea. You can also complete one for your personal life when entering a new phase of life or facing a tough decision. Personal SWOTs work best when you can focus on a single goal or problem that you want to address. However, it is important that you have a clear understanding of what you want before you begin. Otherwise, you might end up wasting your own time by not setting clear boundaries and expectations. Below is a matrix of some personal SWOT questions.
Because you will have singular control over personal SWOTs, the best option is to convert your negatives into positives. This could mean growing a skill set or finding creative ways to turn your weaknesses into strengths. For instance, if you are very outgoing, you should know not to confine yourself to an isolated work environment.
Personal SWOTs are powerful because they allow you to uncover opportunities that you might not have otherwise spotted. By understanding and accepting your weaknesses, you can manage to eliminate threats that might otherwise hurt your ability to move forward.
Just One Tool
SWOT is a simple, yet useful framework for analyzing your organization’s strengths, weaknesses, opportunities, and threats. It helps you build on what you do well, to address what you are lacking, to minimize risks, and to take the greatest possible advantage of chances for success.
But, it is not the only tool. Performing a valuable SWOT requires insight into what questions you need to ask and doing research to support the answers you need.
This information comes from a talk with Dr. John Bilello, ScienceDocs consultant, in partnership with University Lab Partners. Dr. Bilello has a PhD in Molecular Biology and was the former Director of Technology Development at GlaxoSmithKline. In addition to an established track record of innovative basic and clinical research, Dr. Bilello has experience in both project and organizational management.
If you want to learn more about business planning, check out this article from ULP about Creating an Effective Business Continuity Plan.
This post was last revised August 28, 2020.