How To Use SWOT Analysis or SOAR Analysis

SWOT Analysis PowerPoint Templates

Introduction

The SWOT and the SOAR models are business management tools used as organizational frameworks to enhance business performance. In recent times, many organizations have used both methods while others have substituted one strategy with the other. SWOT Analysis is an acronym for Strengths, Weaknesses, Opportunities and Threats. SOAR Analysis, on the other hand, stands for Strengths, Opportunities, Aspirations and Results. These two will be juxtaposed in this article and we will show some examples of how to present them to your audience.

SWOT analysis in a nutshell

The SWOT analysis is a vital enterprise planning tool for any organization. It helps to understand the organization’s strengths, weaknesses and identifying the opportunities that are open. At the same time, the threats that the organization is likely to face are listed and analyzed providing an effective remedy. Its simplicity of execution and its collaborative nature allows enterprise planning teams to generate ideas and tactics around the organization’s competitive advantages as well as detecting gaps in their value proposition and market offering. In the human resources area, it is also very popular applied in an individual level; this strategy will help employees in developing their career in a way that best exploits their talents and abilities.

It’s outline

The SWOT analysis strategy is a powerful tool in the sense that it can help an organization uncover opportunities that would have otherwise been missed and exploit them with their strengths, taking care of the threats and weaknesses. This happens because of the focus it sets to the analysis team on forcing the advent of opportunities, looking at the external environment. Also, the weaknesses of the organization are well understood by the management and hence can be managed easily, protecting important market assets, customers and even employees. Focusing on the acronym, the first two (strengths and weaknesses) are usually internal factors of an organization while opportunities and threats in most cases will act as the external factors.

While carrying out your analysis using this technique, you should at least focus on the following:

  • The Strengths: An organization should be able to focus on what it is better in than its competitors. The advantages the organization has should also be listed. The management should also be able to come up with the unique selling proposition of the organization. That way, all the strengths will be listed from an internal view, an external view(client-view) and the market view (in relation to the competitors and the factors of production).
  • Weaknesses: On this pillar, the organization should keep the focus on the things that the external parties such as the clients and the competitors view as the weaknesses of the firm. The possible improvements should also be looked upon. You could also look at the things or factors that should be avoided in order to improve the profitability and propel the realization of the organizational objectives. On this pillar, it is worth noting that truthfulness is an important factor. It is better to face the reality and do the necessary amendments rather than turn a blind eye and suffer the consequences later.
  • Opportunities: The organization should aim at seizing ball the opportunities that are available. To that effect, keeping up with the trends in the organization’s field is vital as it will help in adjusting to the market. This will benefit your firm in terms of profitability. The changes in government policy and technological advancements should be at the fingertips. It would be ideal to focus on the strengths and weaknesses and see whether they present an opportunity to the organization.
  • Threats: These are the obstacle that you face while in operation or changes happening in the near future that can affect or disrupt your market position. They could be the factors that your competition engages in, cash problems or the changing technology.

A Real Life Example – Tesla SWOT

Let’s take a well-known company as Tesla (founded by the extraordinary entrepreneur Elon Musk). The first iteration of the SWOT Analysis consists on identifying each of the factors on the SWOT Matrix. The following PowerPoint Presentation outlines the major factors after the first run:

SWOT Analysis Presentation for Tesla Car Company

As you can see in the SWOT Analysis PowerPoint Template, the nine factors are listed, ready to be presented by the analysis team. With this 9 key phrases, a complete strategy can be outlined. Of course, a more grained definition of each factor needs to be developed. The analysis team can continue its iterations reaching more granular descriptions, as the following:

Opportunities for Tesla SWOT Analysis

You can check the full SWOT Analysis for Tesla in the following video:

 

Whereas SWOT analysis may seem like the perfect strategy, it would be the ideal ‘kick-off’ strategy formulation. However, when the organization stabilizes, it would be prudent to supplement it with other tools such as the SOAR strategy.

SOAR Analysis as a Maturity Step

Contrary to the focus on the weaknesses and the strengths of the organization, this strategy engages all levels and functional areas of an organization. The emphasis in this strategy is on the strengths of the organization. While conducting a SOAR analysis, these key points are essential and will facilitate its success:

  • Greatest Strengths: An organization should focus on its greatest achievement, the unique factors about the organization and the driving factors that guarantee the success of the firm. These are aimed at boosting the general morale of the staff and making sure that standards are upheld.
  • Opportunities: This SOAR pillar focuses on the new markets for the organization and generally the slightest chances for improvement of the firm. For instance, the challenges should be viewed as a perfect opportunity to reframe them into gains. The organization also views the various methods that it will differentiate itself and stand out from the competitors.
  • Aspirations: This is the tool that mainly dives the firm towards an attainment of its goals. The firm should focus on the initiatives and processes that are geared towards success. Most of the time, the strengths and opportunities will act as the aspirations as they will offer meditation and reflective moments.
  • Results: This is a vital pillar in this strategy as it focuses on giving indicative signals to the organization. It tells whether the organization is on the right track towards the achievement of the goals. The firm also focuses on how to transform the success vision into a reality. When the goals have been met, the organization is motivated and the same trend is maintained.

It is clear that SOAR is a more vigorous tool that can be integrated throughout the organization. Unlike SWOT Analysis, SOAR Analysis also mainly dwells on the possibilities of the firm and is, therefore, more forward-looking. The SWOT structure will focus on the competition and build the firm from scratch although larger organizations have also used it. SOAR could also be the perfect tool for the startups that are yet to identify their weakness or threats. It is also considered as an action-oriented approach. SWOT would be considered as a more of analytical approach and much time is invested if it is adopted. In that line, it would be ultimately correct to state that with the SOAR analysis approach, innovation and research are greatly motivated. On the other hand, SWOT analysis will mostly encourage incremental improvement.

Real Life Example (continuation)

As seen in the previous example, we listed the SWOT Analysis for TESLA. In the following example, you can see the SOAR Analysis for the same company. In this case, every characteristic is rated and sorted in order to keep the 4 more important and “related”. From left to right the analysis should bring to the table the appropriate approach to exploiting the company strengths over the existing opportunities, define the aspirations and finally decided the KPI’s to measure them over time. Clearly, the analysis is much richer and more strategically aligned.

PowerPoint SOAR Analysis Template

Conclusion

The two methods are tools that can greatly improve the outlook of an organization. In some instances, certain organizations have adopted both of them and use them at the various levels. They are able to deal with the external forces while at the same time ensuring that their objectives are well defined. Both have their advantages and disadvantages. I would be prudent to carefully choose the approach/strategy that suits your organization or better still have them both.

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