SWOT: what it is and what to do instead

The idea worth keeping

Not as boxes to fill, but as questions that fall out of the maths of the goal:

• Which number is heading the wrong way, and when does it break the business?
• Which of our assets could earn money another way?
• What could make the decline faster than we think?

Why reaching for it fails in an interview

• It is generic. Every company has strengths, weaknesses, opportunities and threats, so the grid is the same shape for all of them.
• It misses the driver that matters. For a newspaper, the deciding fact is when falling print revenue drops below the fixed cost of printing, which no box shows.
• It sounds rehearsed. A SWOT in a case interview reads as a school exercise.

What to do instead: a worked case

1. 1

   Pin the question

   Find when print stops paying for itself, and what to change before then.

2. 2

   Write the maths of the goal

   • Print profit = print revenue (copies x price + print advertising) minus printing and distribution cost
   • Print revenue in three years = 40 million x 0.9 x 0.9 x 0.9
3. 3

   Use what you know about the business

   • Printing and distribution cost is mostly fixed per edition: the press runs and the vans drive whether 10,000 or 20,000 copies sell.
   • Weekend editions carry much of the print advertising.
   • Loyal local readers are the base for digital subscriptions, which grow slowly.

   The structure that falls out of it

   • Print revenue
     • Copies sold
     • Print advertising by day of week
   • Print cost
     • Cost per edition
     • Editions per week
   • Digital revenue
     • Subscribers
     • Price
     • Digital advertising

   Hypothesis: Within a few years, print revenue will fall below its mostly fixed cost, so the paper must cut print days before then.

4. 4

   Find the facts that decide it

   • Print revenue is 40 million and print cost 30 million. In three years: 40 x 0.9 x 0.9 x 0.9 = 29.16 million, below the 30 million cost.
   • Printing three days a week instead of seven would cut print cost by 40%, to 18 million, while keeping 75% of print revenue, because weekend editions carry most advertising.
5. 5

   Say so what

   Cut to three print days, including the weekend, within two years: in three years print revenue (about 29 million) will fall below print cost (30 million), and fewer print days cut cost by 12 million while keeping three quarters of print revenue. Use the savings to grow digital subscriptions. The risk is losing older daily readers, so offer them a digital edition with help to switch.

Build the acumen behind it

The worked case used two things a list cannot give you: the five moves, and knowing how this kind of business makes money. These pages teach both.