Two important Strategic Analysis Tools

When developing strategy for a business there are many different ways to go about it. Strategic analysis tools help a company ensure that they are staying on the right track and that they have a clear path moving forward to reach their company goals and objectives. There is no specific one way to accomplish this and there are a multitude of different analysis programs to choose from. The use of SWOT analysis and RCCA in my company aid us in understanding our strength and help us work on our weaknesses.

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SWOT (Strength, Weaknesses, Opportunity, and Threats) this analysis platform is designed to “help organizations develop a full awareness of all the factors involved in a decision” (Fallon, 2019) This analysis is designed to compare your internal weaknesses against your external threats. By working on one area or even both areas the company would be able to improve their stance on particular problems. The first step would be to analyze the internal factors and they could range from Finance, Physical, Human, or Processes. The external factors would be along the line of market trends, Economic trends, funding, environment regulations, or problems with supplier or venders. A good example of a SWOT analysis would be where a problem with an external weakness for the company is that the vendors are not delivering on time. So, to conduct this analysis you would create a table with four areas to write out in regard to this problem the company’s strength in box one, Weakness in box two, Opportunities in box three and threats in box four. So, by taking the time to look at all four areas you will start to understand the problem and possibilities on how to move forward and start to address the problem. So, we would look at the threats in that the suppliers are not delivering on time which creates the opportunity for our company to not be able to delivery our products on time. The weakness would show that although we always pay our vendors, we very rarely pay them on time exceeding our 30 days net that we agreed to. This in turn opens the door for us to potentially turn this weakness into a strength by just ensuring that we pay our vendors on time so that we become more of a priority for them. Like any process there are always pros and cons to them. When looking at the SWOT analysis some of the pro’s would be that you can gain a better perspective of the problem when you break it down to the four different areas to analyze. Another advantage would be “SWOT analysis requires neither technical skills nor training. Instead, it can be performed by anyone with knowledge about the business in question and the industry in which it operates. The process involves a facilitated brainstorming session during which the four dimensions of the SWOT analysis are discussed.” (Nordmeyer, 2018) The cons would be that there is no way to weigh each of the four factors to determine if any are more important than another. Another issue is that with this process it a statement can only be one or the other for example not paying the vendor can only be a strength or it can be a weakness. It can’t be both and in real world application it might be both.

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Another strategic analysis would be the use of RCCA (Root Cause and Corrective Action). RCCA is another way to look at the problem and figure out what is the real cause of the problem and determine a way to move forward by creating steps in the analytical process to determine the true cause of the problem and then creating a new process or corrective action to ensure the problem doesn’t happen again.  In order to begin the process, it must first have a few questions asked and answered such as who, what, where, when, how many and how was. These five questions will set the stage for the analysis to begin. The next part of this analysis is to gather as much information as possible for the team to analyze. After that has been completed then all the information is compiled into a diagram that the company deems fit to use. There are many different types of diagram such as Is/ Is Not, Fishbone Diagram, 5 Whys, FMEA and Action plan. All of these different tools are good to use and a company can choose to use more than one in their RCCA. From here, the company would fill out the diagram such as the 5 why’s and this would narrow down the true root cause as to why this particular problem happened. Simple stated “The 5 why method is simply asking the question “Why” enough times until you get through all the symptoms of a problem and down to the root cause. The 5 Whys is often used during the problem solving activities”. (Quality-One International, 2015) For example, if a manufacturing company had a problem where a certain production line had made a bunch of scrap then they would be issued a non-conformance from quality and a RCCA would be kicked off to solve the problem. The team would meet and all the information would be gathered such as info on the material and the reason on why it was rejected from the quality department. Then the 5 whys would begin, so the question of why would be the counter point after each of the statement answers would be stated. Meaning “Why was this rejected?” the answer would be “because it was machined incorrectly” so then you would question that with “Why” and then so on until you have asked the question of why 5 times. In some cases, it might not reach the full 5 whys and in some cases, it might reach more than the 5 whys. It might require a 6 or 7 why to reach the true root cause of the problem. So then, after the root cause has been analyzed then it would be onto the corrective action part of the process. At this stage you would take the root cause and brain storm on what the corrective action would be. For example, if the root cause ended up be that the scrapped parts were scrapped due to negligence due to an employee’s lack of attention. Then the corrective action could be a simple as re-training the employee or a formal disciplinary action for the employee. When looking at the pros and cons for the RCA method the pros for this process is that it is relatively easy to apply to a problem that has surfaced. One of the cons would be that this process assumes that the problem might be a direct response to an event that has happened but the true root cause may not be directly responsible or there might be more than just one root cause.

Companies today have any resources available to them in order to be able to combat the problems that their company is facing at any given time. The use of the tools both SWOT and RCA analysis can be useful at any given time. One thing to remember about them both is that they are not perfect and they will not be perfect for every scenario. One way might work great to solve a problem but when the next problem arises it might not be the best system to figure out the root cause for that problem. In my opinion, it would be best to have multiple tools available and to fit the problem with the tools that works best to determine the best possible root cause. This should ensure that any company could solve their problems through team work and the tools to understand the problem and its entirety.

References

Fallon, N. (2019). Business News Daily. Retrieved from SWOT Analysis: What iit is and When to Use it: https://www.businessnewsdaily.com/4245-swot-analysis.html

Nordmeyer, B. (2018, 06 27). Monday. Retrieved from Advantages and Disadvantages of SWOT: https://smallbusiness.chron.com/advantages-amp-disadvantages-swot-analysis-41398.html

Quality-One International. (2015). Retrieved from RCA: https://quality-one.com/rca/

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Daniel Fortune

Daniel Fortune is a successful business professional, entrepreneur, father, and lover of travel.

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