SWOTs have a second part

When the democratization of a concept sometimes leads to the misuse of a methodology.

by | Feb 1, 2021

Now that we are at the beginning of a new year, it is the moment in which many companies decide to think about where their future should be directed the following year. Everyone who has been familiar with the ST strategy project over the past few months knows that there are certain concepts that we consider to have been distorted. This fact is because some terms or methodologies become popular and begin to be used in a lighter way or, at least, with less rigor. Don’t misunderstand us, there is no problem that some concepts reach more people and that everyone can use them. The problem comes when, because of this fact, the concept loses value and ceases to mean an idea to mean another, usually of lesser value.

We believe that one of the terms that has increasingly entered into this bag is SWOT. Moreover, not because people don’t do SWOTs, but because people forget the objective of SWOTs and don’t remember that there is a second part to work on. SWOTs are a classic in many business environments, and not because they are “mainstream”, they are no longer useful. In fact, it is a tool that can be applied to many types of companies, even at a personal level, and that allows you to repeat it several times (once a year, for example) to make different analyses.

Perhaps it has happened to you in the past to be in a room where it is proposed to create the matrix with the Strengths, Weaknesses, Opportunities, and Threats. You dedicate an important part of your time to do this exercise and once you have filled in the whole chart, you read it aloud and proceed to do another task.

Why do we do the SWOT? It is a tool for analyzing the company’s situation, a snapshot of the current situation that should be used to make strategic decisions in the future. What is the point of filling out the matrix if no decision is made afterwards?

A SWOT without a subsequent analysis is synonymous with a waste of time. It is like preparing an event and not inviting anyone.

The second part of the SWOT (which we would like to highlight today) is known by the acronym CAME.

What is it?

The CAME analysis arises from the need to create a SWOT. As we have already mentioned, by filling in the table, we have a picture of the company in its current state, but to get the most out of it, it is necessary to relate the different concepts well. In this way, we will be able to draw up a strategy for the future thanks to the CAME analysis. In fact, this analysis was born precisely because of the need to obtain more information from SWOTs, which had already been done since the 1970s.

Therefore, the CAME analysis opens the door to seek ways to exploit the strengths of our company (Strengths and Opportunities) and to study ways to minimize or eliminate the weaknesses (Weaknesses and Threats).

What we should also know is that by combining the different concepts we can generate different strategies that will make more or less sense depending on the company’s current situation. Specifically, we can outline the following:

– Defensive strategy (Threats and Strengths). In this case, we look at how we can use the company’s existing strengths to face the threats that we have detected will arrive in the future. How can we use our strengths to anticipate the difficulties that the market will present us with?

– Offensive strategy (Strengths and Opportunities). How can we take advantage of the opportunities presented by the sector to further reinforce the company’s strengths? Is it possible to generate new strengths by anticipating the opportunities we have analyzed?

– Reorientation strategy (Weaknesses and Opportunities). In this case, we study the ways to use the opportunities of the sector to eliminate weaknesses that we know our company has. Not everything is to reinforce the strong points, it is also important to know the weak points of the company and know how to minimize them.

– Survival Strategy (Weaknesses and Threats). This type of strategy focuses on seeing how we can minimize the effects of the threats that we know will come and that can have an even greater impact on the current weaknesses we have. How do we face a heavy investment in technology when we have liquidity problems? We need to find a way to make it viable 

This second part is the one that, as we can see, generates different strategies for the company, thanks to the information extracted from the SWOT. The second part cannot be done without the first part and the first part does not generate value without the second one. And in the end, what we are looking for is to work with tools and methodologies that are valid for our company and that end up reporting, in some way, value to the company and impacting its future.

As mentioned above, this process is not only valid for the business environment. Unlike other methods, this methodology is also applicable in an NGO or non-profit environment.

To conclude, we would like to make two observations:

– To achieve a good analysis following the SWOT method – CAME, it is important to carry out a good preliminary study exercise and allow people from different profiles within the organization to participate in it. Aspects that are very obvious to us may not be obvious to other people in the company or vice versa. In this type of exercise, it is very important to have different opinions (the vision of the clients is also important), in order to know how to correctly identify the concepts that should go to each point of the matrix.

– SWOT-CAME is a very effective method to validate a specific moment of the company’s present. Is a very good starting point and incredibly useful when you do not have many resources, but to make a complete strategy of the company, it is necessary to enter into many other details that are beyond the scope of this method. We must keep in mind that there are other methodologies that help to provide value, make the future strategy more solid and minimize risks.

We hope that by making this second part of the SWOTs more widely known, it will be used more and more and that companies will not only focus on filling out a table, but also on drawing conclusions and possible strategies that will mark the future of the companies.