Can SWOT Analysis Help for Performing Risk Management?
The answer is YES.
At NPro Consult, we recognise the 4-box SWOT analysis as the most widely used and effective technique for distinguishing risks before taking further strategic steps in an organization. It is adept for confirming opportunities (POSITIVE risks) and identifying threats (NEGATIVE risks).
In the following lines, we share an easy, 3-phase-process to instantly and easily distinguish the risks involved in your project or business, based on SWOT analysis.
Phase 1: Carefully identify the 4 SWOT factors
In this initial, vital stage, make sure to outline Strengths, Weaknesses, Opportunities, Threats. We share some questions to help you in this process of identifying.
1) Strengths (focus internally): what are the competitive advantages that put your business ahead of the key competitors?
2) Weaknesses (focus internally): what are the traits that can be considered as disadvantages for your business/project?
3) Opportunities (focus externally): What elements in the environment your business/project can employ to its advantage?
4) Threats (focus externally): What elements in the environment can cause trouble for your business/project?
Phase 2: Dissect the results
Being here, we consider you’ve already done the initial work of identification.
Now, couple the similar items and discard the irrelevant ideas you’ve probably collected during the brainstorming. Also, arrange all factors in rank order.
Phase 3: Distinguish risk based on the 4 SWOT factors
As a final step you should add in your risk list:
- Positive risks: which Opportunities can you have because of your Strengths?
- Negative risks: which Threats can you have because of your Weaknesses?
Also, it is necessary to learn that for each new risk identify you should establish strategies where you can use the Strengths and Opportunities to reduce Weaknesses and prevent Threats.
And have you used SWOT in your risk management? Share your thoughts!
