There are a number of approaches to this - simple and more complex. My favourite is one that is based on that described by Philip Kotler in his book on Marketing Management, Analysis, Planning, Implementation and Control. For this, make a list of ALL aspects of the company you want to look at:

• Finances (broken down by liquidity, productivity, strength, etc.);
• Marketing (price, promotion, planning, distribution, sales activity, product quality, new product development, etc.);
• Operations;
• Personnel

and so on - all broken down into components.

For each aspect, rank the items against performance prior year, against your industry and against your own company. Give a rank for 5 for much better, 4 for better, 3 for the same, 2 for worse and 1 for much worse. Ignore all aspects with a 3 rating. This is neither a strength nor weakness. Examine all the 5 ratings - these are major strengths - and 1 ratings, which are major weaknesses.

If you are comparing against your company, a 1 in a competitor means that you have a major opportunity to use your strength against the competitor. A rating of 5 means the competitor is MUCH better than you. You need to focus on improving - but this area will be difficult to attack as the competitor should view this as key strength and protect himself. So until you can improve - you can't attack here. The 4 ratings however can be attacked - especially as it should be easier to improve your performance.

Similarly, compare yourself or competitor to the industry as a whole. Strong weaknesses can be attacked but strong strengths lead to industry leadership. So these are areas where you need to improve. Looking at the relative position for prior years gives an indication of strategy as it may show where the competitor has prioritised.

This is a very brief answer. We've also prepared a more in-depth white paper on SWOT analysis (and gave workshops on this topic at the SCIP 2003 conference in Los Angeles and the SCIP Europe 2003 conference in London) and also given additional information in question 24 which looks at both SWOT and PEST analysis. Contact us for more information on how we can help you with SWOT and business environmental analyses.