SWOT vs SOAR Analysis: Planning for Your Next Big Win
Business leaders and owners are always searching for the best possible results through strategic planning tools that can provide a competitive advantage. One such tool that we – Mahmood and Jo – really like is the SOAR analysis template.
Traditionally, SWOT analysis has been a go-to strategy tool in the business world. However, an alternative framework, the SOAR model, offers a positive change with its action-oriented approach. Let’s delve into these strategy tools and explore how they can help you and your company to plan for business success and achieve your next big win.
What is SWOT Analysis?
The first step in any strategic planning process is understanding your present situation. Here, SWOT analysis plays a vital role. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. It offers a balanced scorecard style view of your company’s strengths and weaknesses (internal factors), alongside the potential threats and business opportunities (external factors).
Although some experts debate this, invention of the SWOT approach is usually attributed to former Stanford strategy professor, Albert Humphrey, in the 1960s and 1970s.
The SWOT Template
During a business strategy workshop or brainstorming session, your team members from different departments and key stakeholders work to identify your business’ Strengths, Weaknesses, Opportunities and Threats.
The top row of the SWOT template (below) is dedicated to internal factors – Strengths on the left, Weaknesses on the right.
The bottom row – Opportunities and Threats – focuses on the external environment. These elements provide you and your team with different perspectives on the current situation and the external business environment.
Examples of Strengths and Weaknesses
Some examples of Strengths and Weaknesses for your SWOT are:
- People / team
- Production or operations
- IT systems
- Internal processes
- Client relationships
Examples of Opportunities and Threats
Some examples of Opportunities and Threats for your SWOT are:
- Economic climate
- Product / part availability
- Changes in customer behaviors
- Legal / regulation changes
- Technology developments
- Political environment
- Increased customer and societal expectations
You could use a ‘PESTLE’ analysis first to inform your SWOT. This means scanning trends and changes to forecast potential Political, Environmental, Social, Technological, Legal and Economic shifts that could impact your business.
Benefits and Disadvantages of SWOT Analysis
Doing a SWOT can help you and your team to understand your business’ unique selling point, recognize internal weaknesses, such as cost improvements and business capacity, as well as external opportunities and current threats.
SWOT analysis is a versatile tool used across a broad spectrum of businesses, from startups focusing on a single domestic market to companies such as large-scale global airlines operating in multiple international markets. However, one main disadvantage of a SWOT analysis is its rear view mirror approach. It focuses more on the recent past and current situation, and less on the future state of your business. It also lacks focus on measurable results.
Another issue with SWOT is that an opportunity could be a threat, and vice versa, depending on how you choose to look at it. We’ve been participants in lots of sessions in the past where people have said that an item – such as the economy (whether it’s healthy or not) – could be either an opportunity or a threat. It’s contingent on how you frame the challenge, and on how entrepreneurial you are.
A Different Approach: What is SOAR Analysis?
SOAR stands for Strengths, Opportunities, Aspirations, and Results. It is a strategic planning framework that, unlike SWOT, encourages a positive approach. It’s from the field of Appreciative Inquiry. This is the principle that if you find out about and focus on what you are doing right, and do more of it, you can accelerate success. Your energy and action travel in the same direction as your attention.
This different approach was initially conceived by David Cooperrider, who taught at both Harvard and Stanford Research Institute. It was further developed by Stavros, Hinrichs, and others. Have a look at their Thin Book of SOAR if you’d like to explore all this further.
The SOAR framework offers an effective analysis tool if you’re looking to create a shared vision of your future next big win. Instead of focusing on weaknesses and threats, SOAR analysis encourages strategic thinking about the organization’s strengths and future aspirations, using a growth mindset. Each section of the SOAR analysis is dedicated to positive change and future-oriented thinking.
What does SOAR Stand For?
In SOAR analysis, each letter of the acronym stands for a specific aspect that businesses need to focus on during their strategic planning process. Here’s what each letter represents:
S – Strengths: This refers to the company’s current strengths. These are what the company excels at and differentiate it from competitors. As a business, you want to identify these strengths and leverage them to gain a competitive advantage.
O – Opportunities: Opportunities are favorable external circumstances that a business can take advantage of to progress towards its strategic goals. This could mean new markets, emerging trends, or partnerships that could help your company grow.
It also includes potential areas for internal improvement – the weaknesses in the SWOT model above. SOAR reframes these weaknesses as opportunities to perform better. Plus, the model encourages more entrepreneurial thinking, because you need to flip what you’d usually see as threats in a framework like SWOT into positives. The key is to be focused on opportunities, and prepared to act on them.
A – Aspirations: This is where you define your business’s future state or vision. What does your company aspire to achieve? What is its purpose? Where do you see your business in the next 5, 10, or 20 years? This step requires visionary thinking to set a clear direction for your company.
R – Results: Results refer to the specific, measurable outcomes your company wants to achieve. This involves setting SMART (Specific, Measurable, Achievable, Relevant, Time-bound) goals aligned with your company’s aspirations. This ensures that your business stays on track towards its vision.
Implementing SOAR Analysis
When it comes to planning your business’s next big win, using SOAR can be incredibly effective. Start by assessing your Strengths and Opportunities that exist in the business environment. This helps you understand your current position and potential avenues for growth. Then, with these in mind, articulate your Aspirations or what you aim to achieve, painting a clear picture of your future state. Finally, define the Results, the tangible goals that will lead you to your aspirations.
By using this approach, you can create a clear, positive, and action-oriented strategic plan that not only capitalizes on your current strengths and opportunities but also aligns your entire organization around a shared vision of the future.
Work with a Diverse Group
To implement SOAR analysis, you’ll need a diverse group of key stakeholders and colleagues. Larger groups (but not too large!) offer different perspectives and get better results. First establish your company’s strengths and then identify opportunities beyond real-time. This requires looking into the future situation, beyond just analysing the noise of the day-to-day business.
With the future state in mind, it’s time to determine aspirations – the specifics of your vision for your next big win. This vision should then be translated into an action plan with smart goal setting to achieve the best possible results. Use your SOAR analysis template and method to create a strategy map aligning your current strengths with future goals.
SOAR Analysis: Advantages and Disadvantages
The main advantages of a SOAR analysis lie in its positive outlook and action-oriented approach. It can yield powerful tool for strategic decision making, creating a more inclusive and positive approach to strategic planning. By focusing on aspirations and results, it makes necessary changes seem like opportunities rather than threats to or weaknesses of your company.
However, it’s important to also acknowledge the main disadvantages of a SOAR analysis. While its positive focus encourages engagement and innovation, it can sometimes overlook critical risks or challenges, especially if it’s not complemented by other strategy tools or business models.
SWOT vs SOAR: Which One is Right for Your Business?
If you’re going to pick one tool, our preferred option is SOAR, because it drives positive focus and action, and also has all the elements of a SWOT built in.
Both SWOT and SOAR are useful tools for strategic planning. The choice depends largely on your business needs. If you need a comprehensive overview of your current strengths and weaknesses along with external factors, SWOT might be the better fit. On the other hand, if you’re looking to inspire your team and focus on future aspirations, the SOAR approach might be more suitable.
A powerful way to harness the strengths of both models is to use them in tandem. Begin with a SWOT analysis to understand the current situation, and then use the A (Aspirations) and R (Results) of the SOAR model to create a forward-thinking, aspirational strategy. This way, you’ll be covering all bases, from internal strengths and weaknesses to external opportunities and future goals.
Remember, strategic planning is not about choosing one tool over the other. It’s about using the most suitable tools and frameworks to gain a competitive advantage, inspire your team, and lead your business to the next big win. By combining SWOT and SOAR, you can ensure a robust and comprehensive strategic planning process that delivers meaningful, achievable results.
Also, have a look at blue ocean strategy tools here as a next step, once you’ve completed your SWOT or SOAR.