1. What is our competitive advantage?
2. What resources do we have?
3. What products are performing well?
Companies may consider performing this step as a "white-boarding" or "sticky note" session. The idea is there is no right or wrong answer; all participants should be encouraged to share whatever thoughts they have. These ideas can later be discarded; in the meantime, the goal should be to come up with as many items as possible to invoke creativity and inspiration in others.
With the list of ideas within each category, it is now time to clean-up the ideas. By refining the thoughts that everyone had, a company can focus on only the best ideas or largest risks to the company. This stage may require substantial debate among analysis participants, including bringing in upper management to help rank priorities.
Armed with the ranked list of strengths, weaknesses, opportunities, and threats, it is time to convert the SWOT analysis into a strategic plan. Members of the analysis team take the bulleted list of items within each category and create a synthesized plan that provides guidance on the original objective.
For example, the company debating whether to release a new product may have identified that it is the market leader for its existing product and there is the opportunity to expand to new markets. However, increased material costs, strained distribution lines, the need for additional staff, and unpredictable product demand may outweigh the strengths and opportunities. The analysis team develops the strategy to revisit the decision in six months in hopes of costs declining and market demand becoming more transparent.
Use a SWOT analysis to identify challenges affecting your business and opportunities that can enhance it. However, note that it is one of many techniques, not a prescription.
When preparing a SWOT analysis, several common mistakes can undermine its effectiveness. Let's take a look at some ways your SWOT analysis may go awry.
One easy error to make when preparing a SWOT analysis is failing to be objective and honest in the assessment. Companies often tend to overemphasize their strengths while downplaying weaknesses, resulting in an overly optimistic and unrealistic analysis. This bias can lead to missed opportunities for improvement and leave the organization vulnerable to unforeseen threats. As difficult as it may be to be honest in your analysis, the validity of underlying assumptions is the cornerstone of how useful the SWOT analysis will be.
Another significant mistake is conducting the analysis in isolation, without input from diverse key stakeholders . You should try get to input from employees at various levels, customers, suppliers, and industry experts. Each may have a unique view of your company, and each may come up with different items to be listed in each quadrant based on how they specifically interact with the company.
Yet another common pitfall is neglecting to prioritize or weight the factors identified in the SWOT analysis. Not all strengths, weaknesses, opportunities, and threats are equally important or impactful. Failing to distinguish between major and minor factors can lead to misallocation of resources and misguided strategic decisions. It can be easy for the important items to be buried if too many non-material items are identified.
Another frequent error is treating the SWOT analysis as a one-time exercise. You should be prepared to do a SWOT analysis periodically, The business environment is constantly changing, and a SWOT analysis should be regularly updated to remain relevant. In addition, the analysis itself is just the beginning; its true value lies in using the findings to develop and implement strategic actions. You can then check future SWOT analysis to make sure the company is addressing the major points.
A SWOT analysis won't solve every major question a company has. However, there's a number of benefits to a SWOT analysis that make strategic decision-making easier.
Let's perform a SWOT analysis together by analyzing the strengths, weaknesses, opportunities, and threats of Tesla.
The four steps of SWOT analysis comprise the acronym SWOT: strengths, weaknesses, opportunities, and threats. These four aspects can be broken into two analytical steps. First, a company assesses its internal capabilities and determines its strengths and weaknesses. Then, a company looks outward and evaluates external factors that impact its business. These external factors may create opportunities or threaten existing operations.
Creating a SWOT analysis involves identifying and analyzing the strengths, weaknesses, opportunities, and threats of a company. It is recommended to first create a list of questions to answer for each element. The questions serve as a guide for completing the SWOT analysis and creating a balanced list. The SWOT framework can be constructed in list format, as free text, or, most commonly, as a 4-cell table, with quadrants dedicated to each element. Strengths and weaknesses are listed first, followed by opportunities and threats.
A SWOT analysis is used to strategically identify areas of improvement or competitive advantages for a company. In addition to analyzing thing that a company does well, SWOT analysis takes a look at more detrimental, negative elements of a business. Using this information, a company can make smarter decisions to preserve what it does well, capitalize on its strengths, mitigate risk regarding weaknesses, and plan for events that may adversely affect the company in the future.
While SWOT analysis is a powerful tool, it does have some limitations. It can sometimes oversimplify complex situations and is susceptible to the subjectivity and bias of participants. The analysis also doesn't provide specific guidance on how to address identified issues and can lead to analysis paralysis if not followed by concrete action.
A SWOT analysis is a great way to guide business-strategy meetings. It's powerful to have everyone in the room discuss the company's core strengths and weaknesses, define the opportunities and threats, and brainstorm ideas. Oftentimes, the SWOT analysis you envision before the session changes throughout to reflect factors you were unaware of and would never have captured if not for the group’s input.
A company can use a SWOT for overall business strategy sessions or for a specific segment such as marketing, production, or sales. This way, you can see how the overall strategy developed from the SWOT analysis will filter down to the segments below before committing to it. You can also work in reverse with a segment-specific SWOT analysis that feeds into an overall SWOT analysis.
Although a useful planning tool, SWOT has limitations. It is one of several business planning techniques to consider and should not be used alone. Also, each point listed within the categories is not prioritized the same. SWOT does not account for the differences in weight. Therefore, a deeper analysis is needed, using another planning technique.
Business News Daily. " SWOT Analysis: What It Is and When to Use It ."
Tesla. " Supercharger ."
Reuters. " Tesla Quarterly Deliveries Decline for the First Time in Nearly Four Years ."
Tesla. " Autopilot and Full Self-Driving Capability ."
A SWOT analysis helps you identify strengths, weaknesses, opportunities, and threats for a specific project or your overall business plan. It’s used for strategic planning and to stay ahead of market trends. Below, we describe each part of the SWOT framework and show you how to conduct your own.
Whether you’re looking for external opportunities or internal strengths, we’ll walk you through how to perform your own SWOT analysis, with helpful examples along the way.
Explore IDC's analysis of how effective work management can drive productivity and financial benefits for your organization.
A SWOT analysis is a technique used to identify strengths, weaknesses, opportunities, and threats for your business or even a specific project. It’s most widely used by organizations—from small businesses and non-profits to large enterprises—but a SWOT analysis can be used for personal purposes as well.
While simple, a SWOT analysis is a powerful tool for helping you identify competitive opportunities for improvement. It helps you improve your team and business while staying ahead of market trends.
SWOT is an acronym that stands for:
Opportunities
When analyzed together, the SWOT framework can paint a larger picture of where you are and how to get to the next step. Let’s dive a little deeper into each of these terms and how they can help identify areas of improvement.
Strengths in SWOT refer to internal initiatives that are performing well. Examining these areas helps you understand what’s already working. You can then use the techniques that you know work—your strengths—in other areas that might need additional support, like improving your team’s efficiency .
When looking into the strengths of your organization, ask yourself the following questions:
What do we do well? Or, even better: What do we do best?
What’s unique about our organization?
What does our target audience like about our organization?
Which categories or features beat out our competitors?
Customer service: Our world-class customer service has an NPS score of 90 as compared to our competitors, who average an NPS score of 70.
Weaknesses in SWOT refer to internal initiatives that are underperforming. It’s a good idea to analyze your strengths before your weaknesses in order to create a baseline for success and failure. Identifying internal weaknesses provides a starting point for improving those projects.
Identify the company’s weaknesses by asking:
Which initiatives are underperforming and why?
What can be improved?
What resources could improve our performance?
How do we rank against our competitors?
E-commerce visibility: Our website visibility is low because of a lack of marketing budget , leading to a decrease in mobile app transactions.
Opportunities in SWOT result from your existing strengths and weaknesses, along with any external initiatives that will put you in a stronger competitive position. These could be anything from weaknesses that you’d like to improve or areas that weren’t identified in the first two phases of your analysis.
Since there are multiple ways to come up with opportunities, it’s helpful to consider these questions before getting started:
What resources can we use to improve weaknesses?
Are there market gaps in our services?
What are our business goals for the year?
What do your competitors offer?
Marketing campaign: To improve brand visibility, we’ll run ad campaigns on YouTube, Facebook, and Instagram.
Threats in SWOT are areas with the potential to cause problems. Different from weaknesses, threats are external and out of your control. This can include anything from a global pandemic to a change in the competitive landscape.
Here are a few questions to ask yourself to identify external threats:
What changes in the industry are cause for concern?
What new market trends are on the horizon?
Where are our competitors outperforming us?
New competitor: With a new e-commerce competitor set to launch within the next month, we could see a decline in customers.
One of the most popular ways to create a SWOT analysis is through a SWOT matrix—a visual representation of strengths, weaknesses, opportunities, and threats. The matrix comprises four separate squares that create one larger square.
A SWOT matrix is great for collecting information and documenting the questions and decision-making process . Not only will it be handy to reference later on, but it’s also great for visualizing any patterns that arise.
Check out the SWOT matrix below for a simple example. As you can see, each of the quadrants lists out the company's strengths, weaknesses, opportunities, and threats.
When used correctly and effectively, your matrix can be a great toolkit for evaluating your organization’s strengths and weaknesses.
A SWOT analysis can be conducted in a variety of ways. Some teams like to meet and throw ideas on a whiteboard, while others prefer the structure of a SWOT matrix. However you choose to make your SWOT analysis, getting creative with your planning process allows new ideas to flow and results in more unique solutions.
There are a few ways to ensure that your SWOT analysis is thorough and done correctly. Let’s take a closer look at some tips to help you get started.
Often, strengths and weaknesses stem from internal processes. These tend to be easier to solve since you have more control over the outcome. When you come across internal factors, you can start implementing improvements in a couple of different ways.
Meet with department stakeholders to form a business plan around how to improve your current situation.
Research and implement new tools, such as a project management tool , that can help streamline these processes for you.
Take immediate action on anything that can be changed in 24 hours or less. If you don’t have the capacity, consider delegating these items to others with deadlines.
The way you go about solving internal factors will depend on the type of problem. If it’s more complex, you might need to use a combination of the above or a more thorough problem management process.
External factors stem from processes outside of your control. This includes competitors, market trends, and anything else that’s affecting your organization from the outside in.
External factors are trickier to solve, as you can’t directly control the outcome. What you can do is pivot your own processes in a way that mitigates negative external factors.
You can work to solve these issues by:
Competing with market trends
Forecasting market trends before they happen
Improving adaptability to improve your reaction time
Track competitors using reporting tools that automatically update you as soon as changes occur
While you won’t be able to control an external environment, you can control how your organization reacts to it.
Let’s say, for instance, that you’re looking to compete with a market trend. For example, a competitor introduced a new product to the market that’s outperforming your own. While you can’t take that product away, you can work to launch an even better product or marketing campaign to mitigate any decline in sales.
Brainstorming new and innovative ideas can help to spur creativity and inspire action. To host a high impact brainstorming session, you’ll want to:
Invite team members from various departments. That way, ideas from each part of the company are represented.
Be intentional about the number of team members you invite, since too many participants could lead to a lack of focus or participation. The sweet spot for a productive brainstorming session is around 10 teammates.
Use different brainstorming techniques that appeal to different work types.
Set a clear intention for the session.
In order to generate creative ideas, you have to first invite them. That means creating fun ways to come up with opportunities. Try randomly selecting anonymous ideas, talking through obviously bad examples, or playing team building games to psych up the team.
Now, rank the opportunities. This can be done as a team or with a smaller group of leaders. Talk through each idea and rank it on a scale of one through 10. Once you’ve agreed on your top ideas based on team capabilities, competencies, and overall impact, it’s easier to implement them.
It’s all too easy to feel finished at this stage —but the actual work is just beginning. After your SWOT analysis, you’ll have a list of prioritized opportunities. Now is the time to turn them into strengths. Use a structured system such as a business case , project plan, or implementation plan to outline what needs to get done—and how you plan to do it.
A SWOT analysis template is often presented in a grid format, divided into four quadrants. Each quadrant represents one of the four elements.
Use this free SWOT analysis template to jump-start your team’s strategic planning.
Identify the strengths that contribute to achieving your objectives. These are internal characteristics that give you an advantage. Some examples could be a strong brand reputation, an innovative culture, or an experienced management team.
Next, focus on weaknesses. These are internal factors that could serve as obstacles to achieving your objectives. Common examples might include a lack of financial resources, high operational costs, or outdated technology.
Move on to the opportunities. These are external conditions that could be helpful in achieving your goals. For example, you might be looking at emerging markets, increased demand, or favorable shifts in regulations.
Lastly, let's address threats. These are external conditions that could negatively impact your objectives. Examples include increased competition or potential economic downturns.
A SWOT analysis can help you improve processes and plan for growth. While similar to a competitive analysis , it differs because it evaluates both internal and external factors. Analyzing key areas around these opportunities and threats will equip you with the insights needed to set your team up for success.
A SWOT analysis isn’t only useful for organizations. With a personal SWOT analysis, you can examine areas of your life that could benefit from improvement, from your leadership style to your communication skills. These are the benefits of using a SWOT analysis in any scenario.
One of the biggest benefits of conducting an analysis is to determine opportunities for growth. It’s a great starting point for startups and teams that know they want to improve but aren’t exactly sure how to get started.
Opportunities can come from many different avenues, like external factors such as diversifying your products for competitive advantage or internal factors like improving your team’s workflow . Either way, capitalizing on opportunities is an excellent way to grow as a team.
Identifying weaknesses and threats during a SWOT analysis can pave the way for a better business strategy.
Ultimately, learning from your mistakes is the best way to excel. Once you find areas to streamline, you can work with team members to brainstorm an action plan . This will let you use what you already know works and build on your company’s strengths.
Whether you have a risk register in place or not, it’s always crucial to identify risks before they become a cause for concern. A SWOT analysis can help you stay on top of actionable items that may play a part in your risk decision-making process.
It may be beneficial to pair your SWOT analysis with a PEST analysis, which examines external solutions such as political, economic, social, and technological factors—all of which can help you identify and plan for project risks .
You won’t always need an in-depth SWOT analysis. It’s most useful for large, general overviews of situations, scenarios, or your business.
A SWOT analysis is most helpful:
Before you implement a large change—including as part of a larger change management plan
When you launch a new company initiative
If you’d like to identify opportunities for growth and improvement
Any time you want a full overview of your business performance
If you need to identify business performance from different perspectives
SWOT analyses are general for a reason—so they can be applied to almost any scenario, project, or business.
Although SWOT is a useful strategic planning tool for businesses and individuals alike, it does have limitations. Here’s what you can expect.
The simplicity of SWOT analysis makes it a go-to tool for many. Because it is simple, it takes the mystery out of strategic planning and lets people think critically about their situations without feeling overwhelmed.
For instance, a small bakery looking to expand its operations can use SWOT analysis to easily understand its current standing. Identifying strengths like a loyal customer base, weaknesses such as limited seating space, opportunities like a rising trend in artisanal baked goods, and threats from larger chain bakeries nearby can all be accomplished without any specialized knowledge or technical expertise.
Its versatile nature allows SWOT analysis to be used across various domains. Whether it’s a business strategizing for the future or an individual planning their career path, SWOT analysis lends itself well.
For example, a tech start-up in the competitive Silicon Valley landscape could employ SWOT to navigate its pathway to profitability. Strengths might include a highly skilled development team; weaknesses could be a lack of brand recognition; opportunities might lie in emerging markets; and threats could include established tech giants.
SWOT excels in identifying external factors that could impact performance. It nudges organizations to look beyond the present and anticipate potential future scenarios.
A retail company, for example, could use SWOT analysis to identify opportunities in e-commerce and threats from changing consumer behavior or new competitors entering the market. By doing so, the company can strategize on how to leverage online platforms to boost sales and counteract threats by enhancing the customer experience or adopting new technologies.
The subjective nature of SWOT analysis may lead to biases. It relies heavily on individual perceptions, which can sometimes overlook crucial data or misinterpret information, leading to skewed conclusions.
For example, a manufacturing company might undervalue the threat of new entrants in the market due to an overconfidence bias among the management. This subjectivity might lead to a lack of preparation for competitive pricing strategies, ultimately affecting the company's market share.
SWOT analysis lays out issues but falls short on prioritizing them. Organizations might struggle to identify which elements deserve immediate attention and resources.
For instance, a healthcare provider identifying numerous opportunities for expansion into new services may become overwhelmed with the choices. Without a clear way to rank these opportunities, resources could be spread too thinly or given to projects that do not have as much of an impact, leading to less-than-ideal outcomes.
Since SWOT analysis captures a snapshot at a particular moment, it may miss the evolving nature of challenges and opportunities, possibly leading to outdated strategies. An example could be a traditional retail business that performs a SWOT analysis and decides to focus on expanding physical stores, overlooking the growing trend of e-commerce. As online shopping continues to evolve and gain popularity, the static analysis might lead to investment in areas with diminishing returns while missing out on the booming e-commerce market trend.
What are the five elements of swot analysis.
Traditionally, SWOT stands for its four main elements: strengths, weaknesses, opportunities, and threats. However, a fifth essential element often overlooked is "actionable strategies." Originally developed by Albert Humphrey, SWOT is more than just a list—it's a planning tool designed to generate actionable strategies for making informed business decisions. This fifth element serves to tie the other four together, enabling departments like human resources and marketing to turn analysis into actionable plans.
A comprehensive SWOT analysis should focus on the internal and external factors that affect your organization. Internally, consider your strong brand and product line as your strengths, and maybe your supply chain weaknesses. Externally, you'll want to look at market share, partnerships, and new technologies that could either pose opportunities or threats. You should also account for demographics, as it helps in market targeting and segmentation.
Writing an effective SWOT analysis begins with research. Start by identifying your strengths, like a strong brand, and your weaknesses, like a small human resources department. Following that, look outward to find opportunities, possibly in technological advancement, and threats, like fluctuations in market share. Many businesses find it helpful to use a free SWOT analysis template to structure this information. A good SWOT analysis doesn't just list these elements; it integrates them to provide a clear roadmap for making business decisions.
New technologies: Rapid technological advancement can make your product or service obsolete.
Supply chain disruptions: Whether due to natural disasters or geopolitical tensions, an unstable supply chain can seriously jeopardize your operations.
Emerging competitors: New players entering the market can erode your market share and offer alternative solutions to your customer base.
Regulatory changes: New laws or regulations can add costs and complexity to your business, affecting your competitiveness.
Once you've completed a SWOT analysis, use the results as a decision-making aid. It can help prioritize actions, develop strategic plans that play to your strengths, improve weaknesses, seize opportunities, and counteract threats. It’s a useful tool for setting objectives and creating a roadmap for achieving them.
A SWOT analysis can be an effective technique for identifying key strengths, weaknesses, opportunities, and threats. Understanding where you are now can be the most impactful way to determine where you want to go next.
Don’t forget, a bit of creativity and collaboration can go a long way. Encourage your team to think outside of the box with 100+ team motivational quotes .
Updated: August 02, 2024
Published: August 01, 2024
“ Our business is absolutely flawless and we have nothing to improve upon ” — said no business owner ever. Instead, we business owners often think of all the ways we could potentially grow our businesses and guard against threats.
I often hear things like:
“Why are my customers not increasing?”
“If only there was a way to find out how to establish my business.”
“My competitors are doing so well, what am I doing wrong?”
The solution lies in one word: SWOT analysis. Well that’s two words, but you get my drift.
I recently conducted a SWOT analysis for my law firm marketing business and it changed everything. In this post, I’ll share my findings.
In this article:
Importance of a swot analysis, parts of a swot analysis, external and internal factors of a swot analysis, how do you write a good swot analysis.
How to act on a swot analysis, 6 swot analysis tips from real professionals, when to use a swot analysis.
5 Research and Planning Templates + a Free Guide on How to Use Them in Your Market Research
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A SWOT analysis is a strategic planning technique that puts your business in perspective using the following lenses: Strengths, Weaknesses, Opportunities, and Threats. Using a SWOT analysis helps you identify ways your business can improve and maximize opportunities, while simultaneously determining negative factors that might hinder your chances of success.
While it may seem simple on the surface, a SWOT analysis allows you to make unbiased evaluations on:
Practically anything that requires strategic planning, internal or external, can have the SWOT framework applied to it, helping you avoid unnecessary errors down the road from lack of insight.
You may have noticed by now that SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. The framework seems simple enough that you’d be tempted to forgo using it at all, relying instead on your intuition to take these things into account.
As a small business owner, I was tempted to forgo using it, thinking I knew everything about my business anyway. I was wrong. Doing a SWOT analysis is important. Here’s why.
A SWOT analysis is an important step in your strategic process because it gives you the opportunity to explore both the potential risks and the exciting possibilities that lie ahead. You’re giving yourself the space to dream, evaluate, and worry before taking action.
Your insights then turn into assets as you create the roadmap for your initiative.
For instance, making a SWOT analysis for my business allowed me to consider the weaknesses and threats that my business might face in the future, which in turn led me to address any concerns or challenges and strategize on how to mitigate those risks.
At the same time, I was able to identify strengths and opportunities which helped inspire innovative ideas and helped me dream big. Both are equally important.
Instead of diving head first into planning and execution, I had to first take inventory of all my assets and roadblocks. This process helped me develop strategies that leverage my strengths and opportunities while addressing and mitigating the impact of weaknesses and threats.
As a result, I gained a comprehensive understanding of my current situation and created a more specific and effective roadmap. Plus, a SWOT analysis is inherently proactive. This means I was better equipped to make informed decisions, allocate resources effectively, and set realistic goals.
As I continued to identify weaknesses and threats, I was better able to account for them in my roadmap, thereby improving my chances of success.
Also, accounting for mitigating factors allows me to allocate my resources wisely and make informed decisions that lead to sustainable growth. Using the SWOT analysis as a guide, I can confidently face challenges and seize opportunities.
As my organization grows and changes, I’ll be able to strike things off my old SWOTs and make additions. With this I can look back at where I came from and look ahead at what’s to come.
In other words, SWOT analyses serve as a tangible history of your progress and provide a reference point for future decision-making. With each update, your SWOT analysis becomes a living document that guides your strategic thinking and helps you stay agile and adaptable in an ever-changing business landscape.
By maintaining this written record, you foster a culture of continuous improvement and empower your team to make data-driven decisions and stay aligned with your long-term vision.
Conducting a SWOT analysis will help you strategize effectively, unlock valuable insights, and make informed decisions. But what exactly does a SWOT analysis include?
Let’s explore each component: Strengths, Weaknesses, Opportunities, and Threats.
SWOT strengths are the unique advantages and internal capabilities that give your company a competitive edge in the market. A strong brand reputation, innovative products or services, or exceptional customer service are just a few examples.
I have discovered that by identifying and capitalizing on your strengths, you can build a solid foundation for growth. You can also use those strengths in other areas that might need additional support, for instance, increasing customer satisfaction .
When asked how conducting a SWOT analysis on his business helped him, Rahul Vij , managing director of WebSpero Solutions replied that the analysis identified “a key strength in our customer service, which we then promoted more heavily in our marketing campaigns, resulting in a 20% increase in customer satisfaction scores.”
When I was looking into the strengths of my own business, here are some questions that I asked myself:
– Zeeshan Akhtar , head of marketing at Mailmodo
“It's easy to fall into a groupthink because usually, SWOT analysis is conducted by management. What we did differently in this case, given the issue we wanted to tackle, was involve an external consultant as well as internal employees to get more diverse perspectives and creative solutions.”
– Zach Dannett , cofounder at Tumble
“ During a SWOT analysis, delving deep into competitors' operations to uncover their vulnerabilities can be invaluable. For instance, discovering a key competitor struggling with customer service inefficiencies through reviews and market feedback can highlight an opportunity for differentiation.”
– Harrison Tang , CEO of Spokeo
“Set priorities and focus on the most impactful areas first. Allocate resources strategically, prioritizing initiatives that promise the greatest returns.”
Arham Khan , CEO of Pixated
“ In terms of leveraging the results, businesses need to be proactive. Don't just see it as a one-time report - use it as a roadmap. Whether reinforcing strengths, addressing weaknesses or pursuing opportunities, SWOT should influence strategic planning and product roadmaps. Revisit it annually too, as situations evolve. ”
– Kelly Indah , editor-in-chief at Increditools
Ultimately, a SWOT analysis can measure and tackle both big and small challenges, from deciding whether or not to launch a new product to refining your social media strategy.
When conducting your own SWOT analysis, you may face problems like data overload, differing opinions, and actionability. I certainly did. However in my experience, these problems can be solved by:
I will conclude this piece by saying don‘t underestimate the power of taking a step back from time to time to assess where you’ve been, where you‘re at, and where you’re going.
I firmly believe that regularly conducting a SWOT analysis is critical for any entrepreneur looking to grow.
Editor's note: This post was originally published in May 2018 and has been updated for comprehensiveness.
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Posted february 2, 2021 by noah parsons.
A SWOT analysis is an incredibly simple, yet powerful tool to help you develop your business strategy, whether you’re building a startup or guiding an existing company.
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.
Strengths and weaknesses are internal to your company—things that you have some control over and can change. Examples include who is on your team, your patents and intellectual property, and your location.
Opportunities and threats are external—things that are going on outside your company, in the larger market. You can take advantage of opportunities and protect against threats, but you can’t change them. Examples include competitors, prices of raw materials, and customer shopping trends.
A SWOT analysis organizes your top strengths, weaknesses, opportunities, and threats into an organized list and is usually presented in a simple two-by-two grid. Go ahead and download our free SWOT analysis template if you just want to dive right in and get started.
When you take the time to do a SWOT analysis, you’ll be armed with a solid strategy for prioritizing the work that you need to do to grow your business.
You may think that you already know everything that you need to do to succeed, but a SWOT analysis will force you to look at your business in new ways and from new directions. You’ll look at your strengths and weaknesses, and how you can leverage those to take advantage of the opportunities and threats that exist in your market.
For a SWOT analysis to be effective, company founders and leaders need to be deeply involved. This isn’t a task that can be delegated to others.
But, company leadership shouldn’t do the work on their own , either. For best results, you’ll want to gather a group of people who have different perspectives on the company. Select people who can represent different aspects of your company, from sales and customer service to marketing and product development. Everyone should have a seat at the table.
Innovative companies even look outside their own internal ranks when they perform a SWOT analysis and get input from customers to add their unique voice to the mix.
If you’re starting or running a business on your own, you can still do a SWOT analysis. Recruit additional points of view from friends who know a little about your business, your accountant, or even vendors and suppliers. The key is to have different points of view.
Existing businesses can use a SWOT analysis to assess their current situation and determine a strategy to move forward . But, remember that things are constantly changing and you’ll want to reassess your strategy, starting with a new SWOT analysis every six to 12 months.
For startups, a SWOT analysis is part of the business planning process. It’ll help codify a strategy so that you start off on the right foot and know the direction that you plan to go.
As I mentioned above, you want to gather a team of people together to work on a SWOT analysis. You don’t need an all-day retreat to get it done, though. One or two hours should be more than plenty.
Gather people from different parts of your company and make sure that you have representatives from every department and team. You’ll find that different groups within your company will have entirely different perspectives that will be critical to making your SWOT analysis successful.
Doing a SWOT analysis is similar to brainstorming meetings, and there are right and wrong ways to run them. I suggest giving everyone a pad of sticky-notes and have everyone quietly generate ideas on their own to start things off. This prevents groupthink and ensures that all voices are heard.
After five to 10 minutes of private brainstorming, put all the sticky-notes up on the wall and group similar ideas together. Allow anyone to add additional notes at this point if someone else’s idea sparks a new thought.
Once all of the ideas are organized, it’s time to rank the ideas. I like using a voting system where everyone gets five or ten “votes” that they can distribute in any way they like. Sticky dots in different colors are useful for this portion of the exercise.
Based on the voting exercise, you should have a prioritized list of ideas. Of course, the list is now up for discussion and debate, and someone in the room should be able to make the final call on the priority. This is usually the CEO, but it could be delegated to someone else in charge of business strategy.
You’ll want to follow this process of generating ideas for each of the four quadrants of your SWOT analysis: Strengths, Weaknesses, Opportunities, and Threats.
Here are a few questions that you can ask your team when you’re building your SWOT analysis. These questions can help explain each section and spark creative thinking.
Strengths are internal, positive attributes of your company. These are things that are within your control.
Weaknesses are negative factors that detract from your strengths. These are things that you might need to improve on to be competitive.
Opportunities are external factors in your business environment that are likely to contribute to your success.
Threats are external factors that you have no control over. You may want to consider putting in place contingency plans for dealing with them if they occur.
To help you get a better sense of what at SWOT example actually looks like, we’re going to look at UPer Crust Pies, a specialty meat and fruit pie cafe in Michigan’s Upper Peninsula. They sell hot, ready-to-go pies and frozen take-home options, as well as an assortment of fresh salads and beverages.
The company is planning to open its first location in downtown Yubetchatown and is very focused on developing a business model that will make it easy to expand quickly and that opens up the possibility of franchising. Here’s what their SWOT analysis might look like:
With your SWOT analysis complete, you’re ready to convert it into a real strategy. After all, the exercise is about producing a strategy that you can work on during the next few months.
The first step is to look at your strengths and figure out how you can use those strengths to take advantage of your opportunities. Then, look at how your strengths can combat the threats that are in the market. Use this analysis to produce a list of actions that you can take.
With your action list in hand, look at your company calendar and start placing goals (or milestones) on it. What do you want to accomplish in each calendar quarter (or month) moving forward?
You’ll also want to do this by analyzing how external opportunities might help you combat your own, internal weaknesses. Can you also minimize those weaknesses so you can avoid the threats that you identified?
Again, you’ll have an action list that you’ll want to prioritize and schedule.
Back to the UPer Crust Pies example: Based on their SWOT analysis, here are a few potential strategies for growth to help you think through how to translate your SWOT into actionable goals.
With your goals and actions in hand, you’ll be a long way toward completing a strategic plan for your business. I like to use the Lean Planning methodology for strategic plans as well as regular business planning. The actions that you generate from your SWOT analysis will fit right into the milestones portion of your Lean Plan and will give you a concrete foundation that you can grow your business from. You can download our free Lean Plan template to help you get started.
If you have additional ideas for how a SWOT analysis can help your business and how it fits into your regular business planning, I’d love to hear from you. You can find me on Twitter @noahparsons .
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Swot analysis: how to strengthen your business plan.
Every business, big or small needs a solid plan to succeed. A well-constructed business plan takes into account the strengths and weaknesses of a company and the opportunities and threats present in the marketplace. One of the most useful tools for assessing these factors is the SWOT analysis as it provides a comprehensive overview of a company's current situation and potential for growth. In this article, we will discuss what a SWOT analysis is, why it is important for businesses, who should conduct it, and how to conduct it effectively.
Have you ever wondered how businesses manage to evaluate all the internal and external factors that could affect their success? Welcome to the SWOT analysis. It's a strategic planning tool that helps businesses identify their Strengths, Weaknesses, Opportunities, and Threats.
Strengths refer to internal factors that give a company an edge over its competitors. Think of a strong brand, loyal customer base, experienced employees, or efficient operations. Weaknesses, on the other hand, are internal factors that put a company at a disadvantage. These could be a weak brand, lack of funding, inexperienced employees, or outdated technology .
But what about external factors that could impact a business's success? That's where Opportunities and Threats come in. Opportunities are external factors that could help a company grow and succeed. This could include a growing market, new trends, technological advancements, or changes in regulations. Threats, on the other hand, are external factors that could harm a company's growth and success. Examples of threats could be economic downturns, increased competition, changes in consumer behavior, or natural disasters.
By conducting a SWOT analysis, businesses can make informed decisions about their strategic initiatives. By focusing their resources on areas with the greatest potential for growth and competitive advantage, businesses can increase their profitability, market share, and long-term success. So, whether you're a business strategist, executive, manager, or consultant, SWOT analysis can provide a fresh perspective on your company's current situation and potential for growth .
A SWOT analysis is essential for developing a business plan that maximizes a company's strengths, minimizes its weaknesses, and takes advantage of opportunities while mitigating threats.
Here are some of the reasons why a SWOT analysis is important for businesses:
Now that we know what a SWOT analysis is and why it is important for businesses, let's discuss how to conduct a SWOT analysis effectively. Here are the steps involved:
Once the SWOT analysis is complete, the next step is to use the information to develop a strategic plan that maximizes the strengths of the business, minimizes its weaknesses, takes advantage of opportunities, and mitigates threats.
A SWOT analysis can be conducted by anyone involved in the strategic planning process of a business. This can include business strategists , executives, managers, and consultants. Here are some of the benefits of conducting a SWOT analysis:
This information helps businesses to prioritize their key strategic initiatives, focus their resources on areas with the greatest potential for growth and competitive advantage, and develop a strategic plan that aligns with their goals and objectives. Ultimately, a SWOT analysis helps businesses to make more effective strategic decisions that can lead to increased profitability, market share, and long-term success.
To help illustrate the SWOT analysis process, let's take a look at an example of a SWOT analysis for a company in the fashion industry:
Using this SWOT analysis, the company could focus on expanding its distribution channels and international presence, reducing production costs, and investing in sustainable and diverse product offerings.
Q: Is a SWOT analysis only for large businesses? A: No, a SWOT analysis is beneficial for businesses of all sizes, including small businesses.
Q: Can a SWOT analysis be conducted for a specific project or product? A: Yes, a SWOT analysis can be conducted for a specific project or product to evaluate its strengths, weaknesses, opportunities, and threats.
Q: How often should a SWOT analysis be conducted? A: It is recommended to conduct a SWOT analysis at least once a year or whenever there are significant changes in the industry, competition, or business environment.
Q: What should I do with the information gathered from a SWOT analysis? A: The information gathered from a SWOT analysis should be used to develop a strategic plan that maximizes strengths, minimizes weaknesses, takes advantage of opportunities, and mitigates threats.
In conclusion, a SWOT analysis is an important tool that can help businesses of all sizes and industries to identify their strengths, weaknesses, opportunities, and threats. By conducting a SWOT analysis, businesses can gain a better understanding of their current situation and potential growth opportunities, enabling them to make informed business decisions and develop effective business strategies. As a strategic leader or business strategist, it is important to conduct a SWOT analysis regularly to stay up-to-date with changes in the industry and competition, and ensure that your business plan is relevant and effective in achieving your business goals.
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6 min. read
Updated October 27, 2023
Conducting a SWOT analysis of your business is a lot more fun than it sounds. It won’t take much time, and doing it forces you to think about your business in a whole new way.
The point of a SWOT analysis is to help you develop a strong business strategy by making sure you’ve considered all of your business’s strengths and weaknesses, as well as the opportunities and threats it faces in the marketplace.
S.W.O.T. is an acronym that stands for Strengths, Weaknesses, Opportunities, and Threats. A SWOT analysis is an organized list of your business’s greatest strengths, weaknesses, opportunities, and threats.
Strengths and weaknesses are internal to the company (think: reputation, patents, location). You can change them over time but not without some work. Opportunities and threats are external (think: suppliers, competitors, prices)—they are out there in the market, happening whether you like it or not. You can’t change them.
Existing businesses can use a SWOT analysis, at any time, to assess a changing environment and respond proactively. In fact, I recommend conducting a strategy review meeting at least once a year that begins with a SWOT analysis.
New businesses should use a SWOT analysis as a part of their planning process. There is no “one size fits all” plan for your business, and thinking about your new business in terms of its unique “SWOTs” will put you on the right track right away, and save you from a lot of headaches later on.
Looking to get started right away? Download our free SWOT Analysis template.
To get the most complete, objective results, a SWOT analysis is best conducted by a group of people with different perspectives and stakes in your company. Management, sales, customer service, and even customers can all contribute valid insight. Moreover, the SWOT analysis process is an opportunity to bring your team together and encourage their participation in and adherence to your company’s resulting strategy.
A SWOT analysis is typically conducted using a four-square SWOT analysis template, but you could also just make lists for each category. Use the method that makes it easiest for you to organize and understand the results.
I recommend holding a brainstorming session to identify the factors in each of the four categories. Alternatively, you could ask team members to individually complete our free SWOT analysis template, and then meet to discuss and compile the results. As you work through each category, don’t be too concerned about elaborating at first; bullet points may be the best way to begin. Just capture the factors you believe are relevant in each of the four areas.
Once you are finished brainstorming, create a final, prioritized version of your SWOT analysis, listing the factors in each category in order of highest priority at the top to lowest priority at the bottom.
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I’ve compiled some questions below to help you develop each section of your SWOT analysis. There are certainly other questions you could ask; these are just meant to get you started.
Strengths describe the positive attributes, tangible and intangible, internal to your organization. They are within your control.
Weaknesses are aspects of your business that detract from the value you offer or place you at a competitive disadvantage. You need to enhance these areas in order to compete with your best competitor.
Opportunities are external attractive factors that represent reasons your business is likely to prosper.
Threats include external factors beyond your control that could place your strategy, or the business itself, at risk. You have no control over these, but you may benefit by having contingency plans to address them if they should occur.
For illustration, here’s a brief SWOT example from a hypothetical, medium-sized computer store in the United States:
See our SWOT analysis examples article for in-depth examples of SWOT analyses for several different industries and business types or download our free SWOT analysis template .
Once you have identified and prioritized your SWOT results, you can use them to develop short-term and long-term strategies for your business. After all, the true value of this exercise is in using the results to maximize the positive influences on your business and minimize the negative ones.
But how do you turn your SWOT results into strategies? One way to do this is to consider how your company’s strengths, weaknesses, opportunities, and threats overlap with each other. This is sometimes called a TOWS analysis.
For example, look at the strengths you identified, and then come up with ways to use those strengths to maximize the opportunities (these are strength-opportunity strategies). Then, look at how those same strengths can be used to minimize the threats you identified (these are strength-threats strategies).
Continuing this process, use the opportunities you identified to develop strategies that will minimize the weaknesses (weakness-opportunity strategies) or avoid the threats (weakness-threats strategies).
The following table might help you organize the strategies in each area:
Once you’ve developed strategies and included them in your strategic plan, be sure to schedule regular review meetings. Use these meetings to talk about why the results of your strategies are different from what you’d planned (because they always will be) and decide what your team will do going forward.
Tim Berry is the founder and chairman of Palo Alto Software , a co-founder of Borland International, and a recognized expert in business planning. He has an MBA from Stanford and degrees with honors from the University of Oregon and the University of Notre Dame. Today, Tim dedicates most of his time to blogging, teaching and evangelizing for business planning.
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Historically, corporate planning has always been difficult. Many organizations have failed at trying to get everyone on the same page and agree to the details of a plan—more often than not, their efforts proved to be both ineffective and time consuming. Something had to be done.
Albert Humphrey of the Stanford Research Institute determined in the 1960s to identify why corporate planning consistently failed. Thus the origination of the SWOT analysis. Today, the SWOT analysis is one of the most important concepts in the business world and is widely used by all types of organizations to help build a strategic plan.
So, what is a SWOT analysis, how do you create one, and what do you do with it? In this article, we’ll explain it all (and share some SWOT analysis examples to boot) from start to finish.
A SWOT analysis is a high-level strategic planning model that helps organizations identify where they’re doing well and where they can improve, both from an internal and an external perspective. SWOT is an acronym for “Strengths, Weaknesses, Opportunities, and Threats.
SWOT works because it helps you evaluate your business by considering multiple factors:
Organizations use SWOT to plot out a future course that plays on their strengths and minimizes risks. Taking the time to look at your organization from different perspectives and honestly assess your future prospects is a worthwhile activity; the insights you glean as a result you should then use constructively as part of the strategic planning process.
How to do a swot analysis.
To help you get started, we’ve created this step-by-step SWOT analysis template. The examples below are specific to the airline industry (since that’s the example we use in our grid), but the SWOT analysis exercise is applicable to all businesses.
You’ll notice we divided our hypothetical examples for strengths, weaknesses, opportunities, and threats based on the four Balanced Scorecard perspectives. You don’t have to use the Balanced Scorecard to be successful with your SWOT analysis, but this method does provide a strong framework for your discussion.
Not using the Balanced Scorecard? Look to the guiding principles of whatever strategic management framework you are using for ways to think about your business. For example, the VRIO framework emphasizes value, rarity, imitability, and organization; you can conduct a SWOT analysis through the lens of these criteria instead.
This is the grid-like matrix that will house the information you gather. As you can see in the SWOT analysis template below, each quadrant features one of the four elements you’ll be focusing on—strengths, weaknesses, opportunities, and threats. Using a matrix helps present your findings in a clear, easy-to-understand way.
Pull people from all departments to participate in the analysis. Your entire leadership team should be involved because they can provide a broad view of the organization and offer insight into the competitive landscape.
But having lots of different perspectives is beneficial, and that means including leaders from every department—and anyone else you think might have valuable input. The more diverse the group, the better insights you’ll generate.
Not all ideas will make it to the final list, but it’s important to consider them all.
3. list your strengths.
Ask the group: What are we good at? How are we better than our competitors? These are broad questions, but in the beginning stages of your discussion, you should accept all answers.
Examine these questions in relation to the Balanced Scorecard perspectives. For the fictional company Upward Airlines, the discussion might look like this:
Having considered these questions for your own organization, you might come up with multiple responses in some categories. Below is a sample of the strengths portion of the SWOT analysis for Upward Airlines:
TIP: As mentioned above, you can use ClearPoint to simplify this and the remaining information-gathering steps. Rather than asking everyone to brainstorm simultaneously in a conference room, give people time to review relevant data (also housed in ClearPoint) that would help identify strengths and weaknesses, as well as potential opportunities. Participants can then input their thoughts into ClearPoint, link to key supporting metrics, and even add contextual information surrounding their thought process.
Doing your analysis within a single tool not only makes it easier to collect the information but also gives you the visibility to see how the various components that make up your SWOT might be linked. Further, ClearPoint has a discussion feature that allows users to @ mention other users, and thus facilitates conversations about your strengths and weaknesses.
4. list your weaknesses.
Ask the group: What are we not good at? Where can we grow? What are we lacking? The Upward Airlines discussion might look like this:
Ask the group: Where do we see big (and small) possibilities for our organization? What do we see happening in the future?
The Upward Airlines group might discuss the following:
Upward Airlines’ opportunities for the foreseeable future might be:
6. identify your potential threats.
Ask the group: What do we see as a threat? What obstacles do we anticipate? What is changing that could hurt us? As a travel-related company in a tough economy, Upward Airlines might uncover a number of potential threats:
The external threats deemed most imminent for Upward Airlines might be:
In looking at your SWOT matrix, do some of your strengths naturally support the identified opportunities? If you eliminate weaknesses, would that present additional opportunities?
At this point, we recommend running a “brown paper exercise”—print your SWOT matrix in large size, and ask employees to add post-it notes in any or all of the matrix’s four boxes if they feel the leadership team missed something. (You can also ask employees to add their names next to their suggestions so leadership can follow up with them.) Not only is this exercise great for inter-office discussion, but it also gives leaders the chance to consider opinions from staff in the field.
Done correctly, the SWOT analysis is another valuable tool in your toolbox for improving business performance and minimizing threats and weaknesses going forward. It can also prompt organizations to be more innovative with their strategy—new ideas may emerge that leadership would not normally have considered without such a thorough examination of the business from all angles.
Complement your swot with a pest analysis.
A SWOT analysis is a way of understanding and evaluating all facets of your company so you’re in a better position to make decisions about the future. But there are also external factors that will impact your company’s future; these things are beyond your control but still require consideration as you map out your strategy.
That’s why many organizations choose to complement a SWOT analysis with a PEST analysis—together, they provide a complete picture of your business environment for effective strategic planning.
PEST stands for political, economic, social, and technological—the four key areas outside your business that are likely to impact it. These factors tend to play out over long time frames. An economic slowdown, for instance, could take years to resolve, but you can take action to address staff training issues fairly quickly.
Thus, a PEST analysis is more valuable than SWOT when it comes to formulating longer-term plans and business strategies. Our recommendation is to do a SWOT analysis first, followed by a PEST analysis, to get a complete picture of the business landscape.
Congratulations! Hopefully, you understand your business a little better after completing your SWOT analysis; now it’s time to put those insights to good use. Your ideas on how to use your strengths and overcome your weaknesses should inform your strategy.
Developing a strategy is in and of itself a big step. It involves defining objectives for your company to move toward, creating priority initiatives (projects) to help make them a reality, and identifying measures to make sure the strategy is unfolding the way it should.
Our Upward Airlines SWOT analysis example, for instance, lists four weaknesses:
Some of these weaknesses are easier to address than others, such as improving employee satisfaction and your project management practices. Others, like the lack of direct travel routes, may be difficult to address in a time when airlines are still recovering from the COVID-19 fallout and profits are low. Similarly, you want to continue supporting your current strengths.
While you shouldn’t let your excellent training program lapse, it needn’t be a focus if you expect the number of new hires over the next year to be low. However, improving your virtual communication practices will most likely prove to be beneficial moving forward.
Therefore, the Upward Airlines SWOT analysis above might drive strategy in the following ways:
Make sure there is a clear and strong link between your SWOT analysis and your strategy map. For example, if you’re a for-profit organization, your financial perspective will be the top priority—build your analysis into your map in a manner that drives those finances in the right direction.
Maybe your SWOT analysis foretold an opportunity to hit a new line of business or forecast that a line of business would dry up. Your strategy needs to reflect that information.
If you’re using ClearPoint for strategy execution, you can make sure the projects you initiate as a result of your SWOT will actually have an impact by a) creating links within the software to show clear connections between projects and objectives, and b) tracking progress on your goals and initiatives over time.
That way, you’ll be able to see if, for example, your revised capacity plan positively impacted revenue in any substantial way—or if it had a negative effect on the bottom line. If you’re continuously monitoring progress, you’ll be able to adjust your course of action in a timely manner if needed.
Those insights will also be useful for your next SWOT analysis.
Real-world swot analysis examples.
Still uncertain as to how your team can use the information produced by a SWOT analysis? We reached out to the business community to ask about their experiences with SWOT.
Their answers, listed below, show that SWOT can be applied to any number of business activities, from developing a long-term overall strategy to launching campaigns, new products, and more.
"We focus on the opportunity aspect of SWOT. We are always looking to find new ways of growing our company, and we use this analysis to show us areas where our business might thrive. A SWOT analysis showed us how important it would be for us to partner with over 15 different insurance companies, so that we can freely match each client with whichever one is best for them. Most companies like ours only work with one or two companies, but we have seized the opportunity, and we are growing because of it."
—Anthony Martin of Choice Mutual
"We took action to understand that it's not enough to simply have a great product; we need to make sure our customers know how it can help them. By servicing the market, we found ways to add value for our customers and build relationships with them by providing helpful resources on our website and offering free trials. This has helped us to focus on creating and providing value to our customers, rather than just trying to get them to buy our product. As a result, we've created a much more sustainable and successful business."
—Diana Stepanova of Monitask
"One of the most important things that came out of our SWOT analysis was identifying untapped opportunities. After changing the game with our magnetic lashes, we saw a gap in the acrylic nail market. Through a SWOT analysis, we have realized our strength in reimagining highly used beauty products and making them better for the consumer. That has opened up even more opportunities to revolutionize the billion-dollar beauty industry."
—Ann McFerran of Glamnetic
"Our SWOT analysis revealed that we could create additional revenue streams by white-labeling our writing service and marketing it to other agencies. We offered interested parties discounts on our already-competitive rates, which made working with us very attractive and profitable for both sides. This allowed us to effectively double the size of our market. Most of the work we do now is for our agency partners, which means we can spend less time chasing sales and instead focus on ensuring quality in our service."
—Milo Cruz of Freelance Writing Jobs
“The best insight I gained from performing a SWOT analysis of my organization is that we are very good at what we do and have a lot of growth potential. One action that we took because of this insight was to expand our product line. We now offer various [photo] backdrops, including some specifically designed for events. We have also started marketing to new customers, which has helped us grow our business.At first, we didn't think that expanding our product line would help us much, but it has been one of the best things we've done for our business. It's enabled us to attract new customers and grow our sales. Marketing to new customers has also been helpful in terms of growing our business. These actions have made us a more prosperous and well-rounded company. "
—Kate Zhang of Kate Backdrop
"The SWOT analysis helped us identify potential opportunities that were unique to us in terms of reach. This allowed us to focus on key areas and strategies that would allow us to be the go-to choice of a specific market."Knowing where your company stands in relation to its competitors is crucial for developing strategies that will give you a competitive advantage. It also gives you insight into your unique opportunities that your competitors may not have. This is the kind of information that can help you make decisions that will take your company to the next level."
—Linda Shaffer of Checkr
"There are many roofing contractors competing for business, and it can be difficult for customers to understand what sets us apart from the rest. In order to address this issue, we have revamped our marketing materials to better communicate our unique selling points.As a result, potential customers can now see that our company is the best choice for quality roofing services, and we have experienced a significant increase in sales."
—Marty Ford of BulletpRoof Roof Systems Ltd.
“Owners of startups and small businesses need, but cannot find, a system to start, market, operate, or finance a business. Through our SWOT analysis, we noticed that our competitors left important questions and needs unanswered. For example, a competitor might help you set up a corporation, but have nothing for you after that.You started the business, but now need marketing, operational, or finance help. We strive to be the entrepreneur's best friend by giving you the needed tools."
—James Chittenden of One Click Advisor
"SWOT analysis was incredibly helpful when it came to understanding the strengths of my business. I was then able to play to those strengths and build on them.One strength was integrity—my business is always honest—and I’ve built that honesty into our brand."
—Keith Terrell of Backpacks Global
"Overcoming our weaknesses doesn't mean we are not keeping an eye on our existing strengths. If there's one thing SWOT analysis has taught us, it’s that we should treasure the things that keep our company strong by being innovative. Our positive attributes can become a weakness if we refuse to adapt to changes. Consistently monitoring our strengths has allowed us to hit all our targets and go beyond our goals. As a result, we have outperformed our competitors by always bringing something new to the table."
—Adam Garcia of The Stock Dork
"Two of the issues we identified were the great resignation and the recession. Knowing them in advance gave us plenty of time to make the necessary changes (like retaining your best employees by offering new benefits—remote work, PTO, and unlimited growth opportunities). We also changed our inventory strategy and made sure we had enough to counter the price increases, shortages, and demand.These strategy changes helped us limit the adverse effects of the recession, optimize our stocks, and make sure all our orders were fulfilled on time. The changes were also able to help us retain our best employees; thus, we never even had any problems throughout the great resignation."
—Michael Perry of Fitness Fixed Gear
"In our SWOT analysis, we were able to pinpoint areas where our employees may be lacking the skills they needed to succeed in our company. We decided to offer free online learning to our workers to help them add to their skill set.This has helped us not only improve the skill sets of our employees, but it has also increased employee retention. Employees want to stay loyal to a company that helps them grow."
—Mark Daoust of Quiet Light
"Prior to the SWOT analysis, I had always approached marketing from a product-centric perspective; however, the SWOT analysis made me realize that we needed to focus more on customer-centric marketing. We needed to connect with our target audience and build relationships with them.As a result, we've made some changes to our marketing approach, and I believe that these changes will help us to be more successful in the long run."
—Jacob Villa of Authority
"We have always prided ourselves on having good client relationships, but this exercise showed us that we needed to have strong client relationships. We have studied our weakness (why we have monthly policy cancellations or non-renewals) and the results showed that we need to focus on building and maintaining client relationships. After doing that, we have seen a significant increase in the average tenure of our clients and customer satisfaction scores."
—Loran Marmes of Medicare Solutions Team
"One threat we encountered in our business was the sudden and huge dip in our customer satisfaction score, which has never happened in the past five years. To resolve this issue and ensure we eliminate the threat that's harming our relationship with customers, we allocated time to engage with our employees and immediately gave them intensive customer service training.Our urgent action to eradicate this threat has helped our business bounce back and we’ve regained the trust of our customers. It has also taught us to listen to customer feedback seriously and do our best to live up to their expectations."
—Jake Smith of Absolute Reg LTD
"A successful SWOT analysis encourages discussion from employees of different levels, from operational, to managerial, to administrative level. By doing this, everyone contributes their thoughts on the status and standing of the company—it’s not just about how one person sees it. This way, all aspects of the business are considered and addressed from all levels."
—Corey Morgan of Kind Home Painting
Swot analysis best practices.
To create the most accurate and effective SWOT analysis, we recommend the following best practices:
If you need some guidance with this process, download our free strategic planning booklet. It includes eight of the most popular templates to build strategic plans, including a SWOT analysis template.
The strategic plan you develop from your SWOT analysis is powerful, so once you’ve created it, don’t let it sit! Use strategy execution software like ClearPoint to track your progress over time.
Undertaking a SWOT analysis requires planning and organization; it can also be a lengthy process. For those reasons, we recommend treating it like a project. If you already have project management (PM) software, by all means use it.
If you don’t have software (or if you’re considering making a change), we encourage you to take a look at ClearPoint. It’s ideal for keeping individual projects on track, but it also does much more than that— it shows you how important projects impact your organization’s overall strategy. Are your projects moving the needle when it comes to your larger goals? That’s an important aspect of project management you can’t get with any other PM tool.
Viewing your SWOT analysis as a project within ClearPoint has multiple benefits:
Another benefit of treating your SWOT analysis as a project in ClearPoint: You won’t have to reinvent the wheel every time you repeat the process. You can just duplicate the framework, make any necessary adjustments, and then repeat the process as before, even comparing your newest SWOT to the previous analysis if necessary.
Below is a screenshot of what it might look like to set up a SWOT analysis as a project within ClearPoint, with some sample milestones shown.
Ready to streamline your SWOT analysis and take your strategic planning to the next level? ClearPoint Strategy is here to guide you. Our comprehensive software solution simplifies the SWOT analysis process, ensuring you gain valuable insights and effectively integrate them into your strategic plan.
Book a personalized demo with our experts and see how our software can help you efficiently conduct SWOT analyses, track progress, and achieve your strategic goals.
What are the 4 dimensions of swot analysis.
The four dimensions areL strengths, weaknesses, opportunities, and threats.
You need a few uninterrupted hours to conduct a strong SWOT analysis. You should conduct a SWOT analysis around the same time of your strategy refresh. Include key leaders within the company to get comprehensive insights on the current state of your business.
Use your SWOT analysis to influence your strategic plan! Don't let the insights from your SWOT analysis just sit in a shelf. Learn how to utilize your strengths to achieve your long-term goals, and make plans to strengthen your weaknesses.
A SWOT analysis offers many benefits for your organization. It allows you to better understand your business. By taking the time to identify where your company succeeds, and where they struggle, you can create plans to leverage your strengths and mitigate risks in your weaknesses.
A SWOT analysis is conducted to assess internal factors that affect your business. A PESTEL analysis focuses solely on external factors .
The benefits of using SWOT analysis include:
SWOT analysis can help your business by:
Common mistakes to avoid when conducting a SWOT analysis include:
You should conduct a SWOT analysis:
Tips for getting the most out of a SWOT analysis include:
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A SWOT analysis can help a small business owner or business assess a company’s position to determine the most optimal strategy going forward. This business practice can help you identify what you’re doing well, what you want to do better, and what kinds of obstacles you might encounter along the way.
This guide will walk you through everything you need to know about a SWOT analysis: what it is, how it works, and how to do it. We’ll also include an example and a template to help guide you as you perform your own SWOT analysis.
A SWOT analysis is a strategic planning technique that outlines an organization’s strengths, weaknesses, opportunities, and threats. Assessing business competition in this way can help an organization plan strategically and execute more effectively.
Your business’s strengths SWOT section should include anything that your business does differently or better than competitors. Think about your unique value proposition, trends you’ve noticed in positive customer feedback, operational strengths, and company culture. This section is the perfect place to name and celebrate anything you’re already doing well.
Don’t be afraid to toot your own horn (while also remaining objective). Clearly identifying your business’s strengths not only helps you keep your spirits balanced as you address your weaknesses, it will also give you a sense of where to concentrate your resources. It’s easier to build a successful business when you’re working towards something, rather than acting in opposition.
Questions to help you determine your strengths:
Your weaknesses are the areas in which the business has room for improvement. You should include structural weaknesses in this section—those that relate to your systems, procedures, resources, and personnel. This is a great place to look at common feedback from employees (either from exit interviews, anonymous surveys, or other sources) and recurring customer complaints.
Questions to help you determine your weaknesses:
Your opportunities are the positive, external factors that your business might benefit from… but cannot directly control. That might include market opportunities, consumer purchasing trends, legal or regulatory changes, population changes, the cost of raw materials, and more. For example, businesses that provide accessibility for aging seniors might recognize the forthcoming “silver tsunami” of Baby Boomers entering the target demographic. This would be a clear opportunity to expand their customer base.
Questions to help you determine your opportunities:
Your threats are the external factors that have the potential to negatively affect your business. A threat can be specific and competitor-based or more structural. buy clomid online buy clomid online no prescription Examples of structural threats could be supply chain challenges, shifts in market requirements, talent shortages, or changes to social media algorithms (especially if your business heavily relies on social media marketing). You might also face a threat (or threats) from your competitors. This can include the way they operate, how they’re marketing, or the products they offer.
Identifying every external threat your business faces is essential for your business to identify how it must adapt in order to meet and overcome these challenges.
Questions to help you determine threats:
SWOT analyses offer a variety of benefits for businesses and personal brands. Here are some of the most common benefits of a SWOT analysis:
You can approach SWOT analyses in multiple ways. You can conduct a personal SWOT analysis for yourself as an individual, you can perform a marketing SWOT analysis to determine a competitive advantage in your marketing , or you can use a SWOT analysis as a part of broader strategic planning.
Whatever your end goal for a SWOT analysis, follow these steps.
Use a SWOT template or create your own. You can create your SWOT framework on the computer or on a whiteboard—if you choose to do the latter, be sure that someone is in charge of recording the responses so that you don’t lose key insights (you can also take a picture at the end of the SWOT session).
A SWOT analysis is most effective when it collects a variety of perspectives. Gathering key stakeholders with various perspectives will help you see more than you would have seen alone. Marketing leaders might be able to give you a more specific sense of the opportunities and threats related to your content marketing efforts. Your people team is closest to all personnel changes and feedback, so they’ll have the clearest sense of an organization’s strengths and what is driving employee retention (or challenging it). Sales leaders can help translate opportunities into a cohesive business strategy.
It’s simple: when it comes to a SWOT analysis, more heads are better than one.
Go through each field of the SWOT diagram, spending some time with each one. Ask the group the guiding questions to ensure you’re developing a comprehensive picture of the internal and external environment. There are no bad ideas in brainstorming. You’re just trying to get thoughts flowing. Something that feels like a “bad idea” might lead to discovering a potential threat you’d never thought of before or nuanced analysis of how you stack up to your nearest competitor. The key here is to keep the brainstorm going.
As you brainstorm, record points and ideas when they are relevant. At the end of the session, your SWOT analysis should leave you with a clear sense of the organization’s strengths and company’s weaknesses that you can use to guide your strategy formulation.
Revisit the SWOT diagram at a later time and edit it, culling out anything you don’t really need. You can also polish up some of the key insights gleaned in the brainstorming session. This is especially important if you plan to use your SWOT analysis as a more formal document that might be disseminated broadly.
The final step, if you choose to do it, is to take your SWOT takeaways and put them together in a polished document that you can share.
It can be easier to understand how to approach a SWOT analysis if you’ve seen a SWOT analysis example. For the sake of this example, we will imagine a hypothetical company and what its SWOT analysis might look like.
An Instagram-friendly fitness business offering virtual workouts.
Use this template to create your own SWOT analysis.
Weaknesses section: what your company could improve, opportunities section: external factors you could use to your advantage, threats section: external factors that could harm your business, owning the hard truths of a swot analysis.
A SWOT analysis can bring up a lot of hard truths. It’s difficult to confront your company’s weaknesses and sometimes looking at threats can make them feel like the existential kind. Overcome these obstacles and give yourself the fortitude to confront business challenges head on with the Mental Toughness mini-course. The best part? It’s free.
Mary Kate Miller writes about small business, real estate, and finance. In addition to writing for Foundr, her work has been published by The Washington Post, Teen Vogue, Bustle, and more. She lives in Chicago.
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SWOT analysis stands for strengths, weaknesses, opportunities and threats. This exercise helps teams develop strategic plans for innovation and investment.
A SWOT (strengths, weaknesses, opportunities, threats) analysis is a visual framework used for strategic planning across all types of businesses and organizations. SWOT analyses are made up of four components that will help you determine the output of your team’s analysis.
Opportunities, how do i do a swot analysis.
A SWOT analysis is a qualitative assessment of a company’s SWOT components. Individuals responsible for the assessment fill out a visual template similar to the figure above, which is usually laid out in a two-by-two matrix. This template helps visualize all the SWOT elements together in their entirety.
To understand in more detail the elements of this template, let’s dive into each component individually.
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Your strengths are organizational features that provide a competitive and strategic advantage relative to the market and competition.
Your weaknesses include organizational features that are lacking relative to market competition, or that hinder the organization’s overall effectiveness to compete, grow, and strive for optimal business performance.
These are favorable market conditions or external developments that represent an opportunity for unlocking or improving the organization’s competitive positioning and business performance. Opportunities can be related to present market conditions, but can also be forward-looking.
These are unfavorable market conditions or external developments that pose a risk to the organization’s performance or the entire viability of the current market. Threats can be related to present market conditions, but can also be forward-looking. (e.g. near-term competitive threats or geopolitical risks would be good examples to feature in this bucket)
During the process of filling in this template, you’ll consider all four elements individually. Once you complete the template, through brainstorming sessions and workshops, you can start putting together an actionable plan to capitalize on your strengths and opportunities while countering your weaknesses and threats.
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Let’s take, for example, a smartphone-producing company in the technology industry. Your example SWOT table may include the following.
Strengths :
Weaknesses:
Opportunities:
As a result and potential plan of action, the company in question may decide to focus on mitigating the risks caused by its weaknesses (for example by increasing production in key regions close to the ones suffering bottlenecks in addition to selecting an experienced interim CEO as soon as possible) while seizing market opportunities that may not come about again (i.e. gaining market share in the short term by exploiting the competitor’s bankruptcy).
Overall, resource allocation should flow to:
The results of a SWOT analysis inform your company’s strategic plan and help you make decisions about how to allocate future resources. As a result of a SWOT analysis your team might decide on the following:
The SWOT analysis as a framework for strategic planning has received its fair share of critique and scrutiny. Let’s review some of the pros and cons.
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A SWOT analysis is part of a strategic planning process that companies use to assess their strengths, weaknesses, opportunities, and threats. A SWOT analysis can be a helpful technique for businesses to utilize when evaluating their business strategy or plan of action.
In this blog article, we cover essential aspects of a SWOT analysis, including how to use a SWOT analysis (including a free template for you to use), the importance of a SWOT analysis, the limitations of a SWOT analysis, real-world examples, and a deeper dive into the four parts of a SWOT analysis.
The four parts of a SWOT analysis are:
Strengths: These are the internal factors that give a company an advantage over its competitors—a talented team, strong brand, financial resources, valuable reputation, etc.
Weaknesses: These are the internal factors that put a company at a disadvantage relative to its competitors—lack of competitive advantage, under-resourced departments, a lack of brand recognition, limited budget, etc.
Opportunities: These are the external factors that present a company with the opportunity to grow and improve its performance—new markets, technology, emerging trends, regulations, etc.
Threats: These are the external factors that present a company with the risk of decline or failure— Competition, economic uncertainty, changing customer preferences and needs, etc.
A SWOT analysis provides an organization with a clear understanding of its current business situation using the information gathered from each of the four parts of a SWOT analysis: Strengths, Weaknesses, Opportunities, and Threats. Based on the SWOT analysis, companies can use the collected data to influence business decisions and develop an achievable plan for growth and success.
You can apply a SWOT analysis to any situation or subject where an individual or organization is looking to maximize business opportunities while also being aware of factors that may hinder its success.
A SWOT analysis is beneficial in a variety of situations, including:
When conducting a SWOT analysis for a company, you will need to evaluate the internal and external factors contributing to your overall results.
1). Download Our Interactive SWOT Analysis Template
We have created an editable version of our template that you can use for yourself or as inspiration when conducting your own analysis. You can organize your research, upload your company logo, and customize the elements and design to make it your own.
2). Identify your objectives
Before you compile data from all of the ins and outs of your research, narrow in on your objectives. A SWOT analysis should be specific enough so that you can create an impactful strategy that will help you reach your desired goal.
For example, your analysis may evaluate specific content promotion ideas or social media channels if you are creating a social media program. Another example is If you are looking to introduce a new product to the market, you may want to focus on the competitive landscape you are introducing the new product into.
3). Identify Each of the Four Parts of Your SWOT Analysis
Strengths: Strengths refer to the positive internal factors that contribute to the success of a business or project. To identify a company's strengths, consider your business's resources, skills, and capabilities and how to leverage them to succeed.
Weaknesses: Weaknesses refer to the negative internal factors that hinder the success of a business or project. When identifying your weaknesses, consider areas where your business is lacking or where there are limitations that could impact success.
Opportunities: Opportunities refer to external factors that companies can leverage to achieve success. To identify opportunities, look at the market environment and consider areas where there is untapped demand or new technologies or trends that could offer a competitive advantage.
Threats: Threats refer to external factors that pose a challenge or risk to the success of a business or project. It's helpful to consider the competitive environment and look for changes in regulations, economic conditions, or customer preferences that could impact your business when identifying a business's threats.
A SWOT analysis can provide numerous benefits for a business. Each of the four parts of a SWOT analysis can provide valuable insights that can help companies achieve their goals and succeed in a competitive market. A SWOT analysis helps companies stay informed, make informed decisions, and continuously improve their marketing efforts.
Better Understanding of the Business Environment: A SWOT analysis helps companies understand their internal and external environments.
Improved Strategic Planning: By identifying its strengths, weaknesses, opportunities, and threats, a company can prioritize its efforts and allocate resources more effectively.
Enhanced Competitiveness: A SWOT analysis helps companies identify areas for improvement and develop strategies to stay ahead of the competition.
Increased Collaboration and Communication: A SWOT analysis can be a valuable tool to help team members understand business goals better and work together more effectively.
Facilitation of Change Management: A SWOT analysis can help companies identify areas for improvement and prioritize changes.
Although a SWOT analysis can be a helpful tool for businesses, it does have limitations. If you are looking to do a SWOT analysis, keep these limitations in mind.
Subjectivity: A SWOT analysis is often subjective, as it relies on the interpretation and opinions of the individual or team conducting the analysis. If the person conducting the analysis is not objective, the results may not be accurate.
Limited Information : A SWOT analysis only considers internal and external factors directly related to the subject of the analysis. Important information may be overlooked, leading to an incomplete or inaccurate understanding of the situation.
Lack of Action Plan: A SWOT analysis provides a snapshot of a company's situation, but it lacks a comprehensive action plan for how to address identified strengths, weaknesses, opportunities, and threats. Organizations must evaluate the SWOT analysis and create a strategic plan accordingly.
Lack of Integration with Other Planning Tools: Companies should integrate a SWOT analysis with other strategic planning tools, such as a competitive or market analysis, to better understand the business environment.
There are numerous examples of successful companies that have used SWOT analysis when developing their business strategies. The examples that we will explore today are from top technology companies you likely know very well.
The company has many strengths that position the company where it is today, including;
Being a globally iconic brand
Supplying top technology across products and services
Continuing to expand its service offerings
Apple is one of the world's most well-known and successful companies and is recognized for its innovation and design. The Apple brand's unique logo and aesthetic design are widely recognized, leaving no doubt that Apple is a globally iconic brand, serving consumers the top technology year after year. The company continues using cutting-edge technology to expand its product/service offerings for devices, streaming services, financial services, and more.
Even the top companies have weaknesses; here are some of Apple's weaknesses.
High-priced "luxury" products
Incompatibility with other software programs
Expanding its offerings into areas of non-competency
Apple products are often considered luxury products because of the high price tags that come with purchasing an Apple product. Low-income consumers are usually eliminated from Apple's consumer pool. A significant weakness consumers see in Apple is that Apple products are incompatible with other software, requiring customers to continue to purchase Apple apps, products, and accessories exclusively.
Additionally, as great as it is that Apple is expanding its product/services, the company is also entering into new areas that they have less competency in, such as video streaming services, payment services, etc., and is competing with top brands such as Netflix, Hulu, and PayPal.
Next, let's look at some of Apple's opportunities.
Consistent Customer Growth
Utilize Artificial Intelligence
Expand Smart Technology
As a fast-growing company, Apple has significant opportunities for customer growth. There is a substantial opportunity for Apple to continue growing its customer base in terms of new and retaining existing customers.
As a top tech company, Apple will likely continue to keep up with technology trends and advances. Artificial intelligence and Smart technology are two advancing technologies companies are capitalizing on today. With smart wearable technology, music streaming services, and even smart home technology, Apple has ample market opportunities to offer customers a better user experience.
Lastly, let's look at the threats that the company faces.
Increasing Competition
Counterfeit Products
Lawsuits Against Apple
Apple is a top-performing brand, but the company still faces the threat of competitors. Other major brands, such as Samsung and Google, are gaining more significant footholds in the industry.
Counterfeit products have also impacted Apple . Individuals or companies are illegally producing counterfeit products using Apple's brand image and name. These counterfeit products can mislead customers and dilute the value of Apple's brand for having dysfunctional and unreliable products.
Lawsuits threaten any company, and Apple is no stranger to them. As a service provider with access to personal information and financial data, the company operates in a highly regulated industry where these accusations are not taken lightly.
Now that we have walked through an example of what a SWOT analysis should look like and the breakdown of each of the four parts of a SWOT analysis let's look at another example.
Even Netflix, one of the most popular Saas companies, can benefit from a SWOT analysis. Let's look at what a SWOT analysis for Netflix may look like.
Here is a SWOT analysis for Netflix.
The four parts of a SWOT analysis are strengths, weaknesses, opportunities, and threats, and it is a helpful tool for businesses of all industries. Using a SWOT analysis to identify internal and external factors, companies can re-think their marketing strategy and begin capitalizing on optimal opportunities while being aware of potential threats.
If you need help, contact us at 800-834-4910 or get in touch with an Inbound 281 blogging expert.
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Use a SWOT (strengths, weaknesses, opportunities, threats) analysis to grow your business.
A SWOT analysis is a planning process that helps your company overcome challenges and determine which new leads to pursue. “SWOT” stands for strengths, weaknesses, opportunities and threats. You should perform a SWOT analysis before you commit to any sort of company action, whether you are exploring new initiatives, revamping internal policies, considering opportunities to pivot or altering a plan midway through its execution.
While there are numerous ways to assess your company, one of the most effective is to conduct a SWOT analysis. Learn all about this approach below.
The primary objective of a SWOT analysis is to help organizations develop a full awareness of all the factors involved in making a business decision . Albert Humphrey of the Stanford Research Institute created this method in the 1960s during a study conducted to identify why corporate planning consistently failed. Since its creation, the SWOT analysis has become one of the most useful tools for business owners to start and grow their companies.
“It is impossible to accurately map out a small business’s future without first evaluating it from all angles, which includes an exhaustive look at all internal and external resources and threats,” Bonnie Taylor, chief marketing officer at CCS Innovations, told Business News Daily. “A SWOT accomplishes this in four straightforward steps that even rookie business owners can understand and embrace.”
Employ a SWOT analysis before you commit to any company action, whether that’s exploring new initiatives, revamping internal policies, considering opportunities to pivot or altering a plan midway through its execution. Sometimes it’s wise to perform a general SWOT analysis to check on the current landscape of your business and improve operations as needed. The analysis can show you key areas where your organization is performing optimally and areas where operations need adjustment.
Don’t make the mistake of thinking about your business operations informally, in hopes that they will all come together on their own. If you take the time to put together a formal SWOT analysis, you’ll be able to see the whole picture of your business. From there, you can discover ways to improve or eliminate your company’s weaknesses and capitalize on its strengths.
While the business owner should certainly be involved in creating a SWOT analysis, it is often helpful to include other team members in the process. Ask for input from a variety of team members and openly discuss any contributions made. The collective knowledge of the team will allow you to adequately analyze your business from all sides.
You can also conduct a personal SWOT analysis in your own life, whether for professional or other purposes.
A SWOT analysis focuses on the four elements of the acronym, allowing companies to identify the forces influencing a strategy, action or initiative. Knowing these positive and negative elements can help companies more effectively communicate what parts of a plan need to be recognized.
When drafting a SWOT analysis, individuals typically create a table split into four columns to list each impacting element side by side for comparison. Strengths and weaknesses won’t typically match listed opportunities and threats verbatim, although they should correlate, since they are tied together.
Billy Bauer, owner of ROYCE New York, noted that pairing external threats with internal weaknesses can highlight the most serious issues a company faces.
“Once you’ve identified your risks, you can then decide whether it is most appropriate to eliminate the internal weakness by assigning company resources to fix the problems, or to reduce the external threat by abandoning the threatened area of business and meeting it after strengthening your business,” said Bauer.
Strengths (S) and weaknesses (W) refer to internal factors, which are the resources and experience readily available to you.
These are some common internal factors:
External forces influence and affect every company, organization and individual. Whether these factors are connected directly or indirectly to opportunities (O) or threats (T), it is important to note and document each one.
External factors are typically things you or your company do not control, such as the following:
After you create your SWOT framework and fill out your SWOT analysis, you will need to come up with some recommendations and strategies based on the results. Linda Pophal, strategic marketing communication consultant and content marketer at Strategic Communications, said these strategies should focus on leveraging strengths and opportunities to overcome weaknesses and threats.
“This is actually the area of strategy development where organizations have an opportunity to be most creative and where innovative ideas can emerge, but only if the analysis has been appropriately prepared in the first place,” said Pophal.
Bryan Weaver, an in-house advisor to Scholefield Construction Attorneys, was heavily involved in creating a SWOT analysis for his firm. He provided Business News Daily with a sample SWOT analysis template and example that was used in the firm’s decision to expand its practice to include dispute mediation services. His SWOT matrix included the following:
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Construction law firm with staff members who are trained in both law and professional engineering/general contracting. Their experience gives a unique advantage. Small (three employees) — can change and adapt quickly. | No one has been a mediator before or been through any formal mediation training programs. One staff member has been a part of mediations, but not as a neutral party. |
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Most commercial construction contracts require mediation. Despite hundreds of mediators in the marketplace, only a few have actual construction experience. For smaller disputes, mediators don’t work as a team, only as individuals; Scholefield staff can offer anyone the advantage of a group of neutrals to evaluate a dispute. | Anyone can become a mediator, so other construction law firms could open up their own mediation service as well. Most potential clients have a negative impression of mediation, because they feel mediators don’t understand or care to understand the problem, and rush to resolve it. |
Resulting strategy: Take mediation courses to eliminate weaknesses and launch Scholefield Mediation, which uses name recognition with the law firm, and highlights that the firm’s construction and construction law experience makes it different.
“Our SWOT analysis forced us to methodically and objectively look at what we had to work with and what the marketplace was offering,” Weaver said. “We then crafted our business plan to emphasize the advantages of our strongest features while exploiting opportunities based on marketplace weaknesses.”
The SWOT analysis is a simple but comprehensive strategy for identifying not only the weaknesses and threats of an action plan, but also the strengths and opportunities it makes possible. However, a SWOT analysis is just one tool in your business strategy. Additional analytic tools to consider include the PEST analysis (political, economic, social and technological), MOST analysis (mission, objective, strategies and tactics) and SCRS analysis (strategy, current state, requirements and solution).
Consistent business analysis and strategic planning is the best way to keep track of growth, strengths and weaknesses. Use a series of analysis strategies, like SWOT, in your decision-making process to examine and execute strategies in a more balanced, in-depth way.
Max Freedman and Nicole Fallon contributed to this article. Some source interviews were conducted for a previous version of this article.
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A SWOT analysis helps you identify areas of strengths and weaknesses in your business and take advantage of opportunities and mitigate threats. Leaders perform a SWOT analysis before starting a project or implementing a strategy.
With help from our experts, we’ll teach you about a SWOT analysis , provide examples from three different industries , and highlight common mistakes to avoid. We also include a downloadable SWOT analysis starter kit to help you get started.
To perform a SWOT (strength, weakness, opportunities, and threats) analysis, assemble a matrix and take an objective look at your business. Write down your observations, summarize your findings, and plan your next steps together with your team.
“A SWOT analysis is designed to shed light on four separate aspects of your business and help in strategy formation and project planning. In order to perform this analysis comprehensively, each factor must be examined in equal measure,” explains Max Wesman , the Founder of GoodHire.
We’ve outlined the steps necessary for completing a SWOT analysis:
Download the SWOT Analysis Starter Kit
We’ve created this starter kit to give you the necessary tools to think through and conduct a SWOT analysis for your business. You’ll find SWOT templates in multiple formats, a checklist of actions to take and questions to ask, and a presentation template. All of these templates are fully customizable and can be adapted for personal decision-making. Download each template individually or as a complete kit.
Included in this download, you’ll find:
A SWOT analysis can help a wide variety of businesses identify their strengths, weaknesses, opportunities, and threats. We’ve collected some SWOT analysis examples that demonstrate how they’re used in construction, technology, and retail industries.
Download the Simple Colorful Construction Company SWOT Template for Google Docs Download the Simple Colorful Construction Company SWOT Template for Google Docs with Sample Data
This simple but colorful SWOT template includes example data for a construction company concerned about its growth. In the sample, the company has identified the experience of their staff as a strength, as well as their growth as a business over the last 15 years. They know they need to be more open to adopting new technology, and they acknowledge they have no marketing budget and only attract new clients by word-of-mouth. They use this info to focus their opportunities on leveraging their existing staff to train new teams, and creating a specific budget for marketing. Finally, they have identified the rising costs of labor and the chance of public backlash to a project they are working on as threats to their business.
Download the Blank Animated Technology SWOT Analysis for PowerPoint Download the Animated Technology SWOT Analysis Template for PowerPoint with Sample Data
This animated SWOT analysis template is excellent for showing off your SWOT findings in a meeting or presentation setting. It includes animations to reveal each quadrant of your matrix as you speak. This template includes sample data for a large technology company that has recognized its worldwide presence and growing customer base as strengths, and the requirements of localization and employee retention as weaknesses. The organization is looking ahead to the opportunities presented by decreased labor costs in emerging markets, but also paying attention to the threat of cybersecurity and potential backlash in their home country due to their outsourcing of labor and manufacturing.
Download the Blank Horizontal Retail SWOT Template for Microsoft Word Download the Horizontal Retail SWOT Template for Microsoft Word with Sample Data
This horizontal-oriented SWOT template includes example data for a retail store. In the sample version of the template, the store has outlined its strengths but also noted concerns about the rising costs of rent and the abundance of big-box stores and included those in the threats section. They have identified opportunities as participation in local events and the possibility of a second storefront. The store also recognized that it could improve its social media efforts and the difficulty in competing with larger, online retailers.
A SWOT analysis is a strategic assessment tool that weighs strengths, weaknesses, opportunities, and threats to aid in decision-making. A SWOT analysis can help guide you to better-informed conclusions that are more likely to produce long-term benefits.
Invented by Albert Humphrey at the Stanford Research Institute in the 1960s, the SWOT analysis framework has been adopted by businesses and individual decision-makers worldwide. Humphrey’s framework prioritizes the analysis of internal strengths and weaknesses; the related TOWS analysis model flips this on its head and focuses on external opportunities and threats. Another external analysis model, the PEST (political, economic, social, and technological) framework, focuses entirely on external factors, namely political, economical, sociocultural, and technological.
“The SWOT analysis is an excellent framework not only for diagnosing issues in your business, but also for identifying strategic opportunities within it. For example, a SWOT analysis can be applied to the launch of a new product, a business partnership under consideration, or a key hire or promotion. While the SWOT is not meant to be an all-inclusive, fully exhaustive analysis, it does provide a solid basis for discussion, much like a resume or CV contributes to the hiring process,” explains Colleti of Colletti Labs.
The strengths section of a SWOT analysis highlights what you do well. These can include your sales and market presence, hiring and retention practices, and products and services, among others. It can also list what you are good at personally.
Some additional examples of strengths you might list in a SWOT analysis include:
Identifying strengths impartially can be challenging. Use this list of questions to help pinpoint your strengths:
Weaknesses in a SWOT analysis are business aspects that are underperforming. These could be low sales, unpopular services, limitations, negative reviews, or others. Consider your weaknesses carefully, as you can often turn them into opportunities.
Here’s a list of common weaknesses businesses might find in a SWOT analysis:
Business owners often struggle to identify their weaknesses impartially. To help identify weaknesses, ask yourself the following questions, and be honest with your answers:
In a SWOT analysis, opportunities refer to situations that offer a chance to improve or expand. These can be factors such as a gap in the market, new products or services, or positive media coverage.
Some examples of opportunities to note in your SWOT analysis are:
To identify opportunities present in your business, ask the following questions:
Threats in a SWOT analysis refer to events or circumstances that pose a risk to your business’s growth or commercial success. These can include competitors, new regulations, negative media or social media coverage, and customer and employee satisfaction.
Opportunities and threats are sometimes considered two sides of the same coin, as many opportunities invite risk if you do not meet them with a solid plan. Opportunities are chances to capitalize on a possibility, but they can often be safely ignored. On the other hand, if you ignore threats for long enough, they often lead to disastrous consequences. Threats vary by industry and location.
We’ve collected some examples of common threats that could appear in a SWOT analysis:
Identifying threats can feel overwhelming and pessimistic, but they are vital for business planning. Ask yourself the following questions to shine light on potential threats in your SWOT analysis:
In a SWOT analysis, strengths and weaknesses are considered internal factors, and opportunities and threats are considered external factors. Internal factors are usually a result of decisions the company has made. External factors often come from a wider environment.
Internal factors tend to be easier to address since they come from decisions made within the company. External factors depend greatly on factors outside of a business and can be harder to identify and track. As a result, most organizations find it easier to bolster strengths and shore up weaknesses than to take advantage of opportunities and avoid threats.
To write a SWOT analysis for your business, take an objective look at your strengths, weaknesses, opportunities, and threats. Keep it organized and concise, and create a specific and actionable list.
We’ve outlined these and other tips:
When performing a SWOT analysis, avoid being vague or too verbose. Be sure to follow up on the findings and create an action plan.
We’ve outlined these and other potential mistakes to avoid in your SWOT analysis:
A SWOT analysis can provide insight into your business’s overall performance, highlight places to improve, and even act as a team-building exercise.
We’ve outlined these and more benefits of performing a SWOT analysis:
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How to conduct a swot analysis, what is a swot analysis used for, additional resources, swot analysis.
A framework to understand and analyze a company’s Strengths, Weaknesses, Opportunities, and Threats
SWOT stands for S trengths, W eaknesses, O pportunities, and T hreats. A SWOT analysis is a framework to help assess and understand the internal and external forces that may create opportunities or risks for an organization.
Strengths and weaknesses are internal factors. They are characteristics of a business that give it a relative advantage (or disadvantage, respectively) over its competition.
Opportunities and threats, on the other hand, are external factors. Opportunities are elements of the external environment that management can seize upon to improve business performance (like revenue growth or improved margins).
Threats are elements of the external environment that may endanger a firm’s competitive advantage (s), or even its ability to operate as a going concern (think regulatory issues or technological disruption).
Strengths may be any number of areas or characteristics where a company excels and has a competitive advantage over its peers. Advantages may be more qualitative in nature and therefore difficult to measure (like a great corporate culture, strong brand recognition, proprietary technology, etc.), or they may be more quantitative (like best-in-class margins, above-average inventory turnover, category-leading return on equity, etc.).
Weaknesses are areas or characteristics where a business is at a competitive disadvantage relative to its peers. Like strengths, these can also be more qualitative or quantitative. Examples include inexperienced management, high employee turnover, low (or declining) margins, and high (or excessive) use of debt as a funding source.
The “Opportunities” section should highlight external factors that represent potential growth or improvement areas for a business. Consider opportunities like a growing total addressable market (TAM) , technological advancements that might help improve efficiency, or changes in social norms that are creating new markets or new sub-segments of existing markets.
Threats are external forces that represent risks to a business and its ability to operate. The categories tend to be similar to the “Opportunities” section, but directionally opposite. Consider examples like an industry in decline (which is the same as a decreasing TAM), technological innovation that could disrupt the existing business and its operations, or evolving social norms that make existing product offerings less attractive to a growing number of consumers.
A SWOT analysis is rarely completed in isolation; it generally makes up one part of a broader business analysis. And while it is itself an assessment framework, a SWOT analysis is also an effective tool to help summarize other findings.
For example, an analyst can’t really assess a company’s strengths and weaknesses without first understanding the business and its industry. They may wish to leverage other tools and frameworks in order to accomplish this, including:
The same is true for external factors – opportunities and threats. It’s nearly impossible to understand these without first considering:
A SWOT analysis is used differently by different stakeholders.
For example, a management team will use the framework to support strategic planning and risk management. SWOT helps them visualize the firm’s relative advantages and disadvantages in order to better understand where and how the organization should allocate resources, either towards growth or risk reduction initiatives.
The analyst community, on the other hand, may seek to understand (and quantify) strengths, weaknesses, opportunities, and threats in order to assess the business more completely.
Consider that findings from a SWOT analysis may help inform model assumptions among analysts. It could be an equity researcher trying to estimate the fair market value of a company’s shares , or a credit analyst looking to better understand a borrower’s creditworthiness.
In general, the SWOT framework is considered by many to be one of the most useful tools available for strategic planning and business analysis.
Thank you for reading CFI’s guide to SWOT Analysis. To keep learning and advancing your career, the following CFI resources will be helpful:
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Brandi Gratis
December 13, 2021
A SWOT Analysis is an integral part of any good business plan. Whether you’ve been in business for ten years or you’re just getting specifics together for a new product , a thoughtful SWOT analysis will inform every part of your business.
SWOT is an acronym that stands for Strengths, Weaknesses, Opportunities, and Threats. You can use a simple list to conduct your analysis, but it’s most commonly formatted using a SWOT diagram.
When coming up with your list of strengths and weaknesses, think about internal factors like patents, expertise, staff, funding, location, etc.
When thinking about your list of opportunities and threats, think about external factors like suppliers, competitors, prices, the market, etc.
Strengths and weaknesses are things you can control and change with varying degrees of effort.
Opportunities and threats are things that exist in the world or market regardless of what your business does. You most likely can’t change these things.
Existing businesses.
Existing businesses will want to do a SWOT Analysis under these circumstances:
New businesses will use the SWOT Analysis to help formulate their business plan. It’s an initial step towards creating a cohesive strategy that will be unique to their business.
The more perspectives you can get involved in your SWOT Analysis, the better. Include people across your company to help you understand the particular strengths, weaknesses, opportunities, and threats that face every department at every level.
This exercise is also an opportunity for different departments to connect and align with the grander vision of the company. Participation encourages adherence to the resulting strategy and makes every part of the company feel included in and integral to driving the business forward.
A SWOT Analysis diagram is simple to create (and we offer multiple templates for it in Cacoo ). It’s made up of four squares, laid out two by two, each labeled as one of the four sections.
You can ask your team to prepare ideas before coming to your meeting, but active and collaborative brainstorming should be encouraged. As different perspectives bring new ideas to light, you’ll begin to identify the most important and unifying elements.
You don’t need to elaborate on any one point too much within the SWOT diagram . Bulleted points for each item will suffice. Plus, it makes organizing much easier, which is the next step.
Once you’re finished brainstorming, it’s time to prioritize your items with the highest priority listed at the top of each section in descending order. Remove items that won’t have a significant impact on the business. In the end, you should have a finalized version of your SWOT Analysis.
If you’re not sure where to start, here are a few questions to help guide the conversation. This is by no means an exhaustive list of things that can or should be discussed during this exercise.
When listing your company’s strengths, you want to think about internal, positive factors within your control.
When listing your company’s weaknesses, think about internal, negative factors that detract from your business’s ability to reach its greatest potential.
When listing your company’s opportunities, you want to think about external, positive factors that could aid your business.
When listing your company’s threats, you want to think about external factors beyond your control that could put your business or strategy at risk.
Once you’ve completed your SWOT results, it’s time to use those insights to develop strategies for your business. However, a basic SWOT diagram presents each factor equally and doesn’t weigh their overall importance in your business plan. To get the most out of your analysis, you need to go a step further.
Both the good and bad points that come up in your analysis will have different levels of impact on your business. By considering how different factors overlap, you can decide what to prioritize to help your business grow. This additional layer of prioritization is known as a TOWS Analysis or TOWS Matrix .
To do this, look at how your diagram sections overlap in the following ways:
The best thing about a SWOT analysis is that anyone can do it — even a complete novice. However, it’s only meant to be a starting point in the planning process, and it may not reflect the complexity of your business situation. So, let’s talk a little about the limitations you could encounter and how to manage them.
Many elements of your business fall into multiple categories on the SWOT diagram. For example, some of your company’s greatest strengths could also be weaknesses. Let’s say you have a great core customer base and have devoted a lot of time to fostering strong relationships with them. Of course, this is a strength.
At the same time, you may become so focused on serving their niche needs that you struggle to attract other types of customers. Lack of diversification is a major flaw that will prevent your company from growing. Yet, this may not appear to be a pressing problem on your initial diagram and won’t be prioritized accordingly.
Try not to rely solely on self-reported data in your analysis. Weaknesses and threats, in particular, may stem from a different source than you expected. And if you conduct a SWOT analysis with incorrect information, you’ll be no closer to solving your problems. Ensure you have reliable evidence for any factor you include in the analysis. Otherwise, the whole process will be guesswork.
Leveraging your resources the right way isn’t a simple matter because business conditions tend to fluctuate or have varying stakes. For instance, many of the opportunities on your list may require a financial investment that would put undue strain on your business. You could only capture those extra profits by taking a huge risk or waiting for better circumstances.
Threats and opportunities can also be time-sensitive. A SWOT analysis doesn’t take conditional factors into account. As a result, a problem you identified as low-stakes in your assessment could significantly escalate while you’re focused on seizing opportunities.
Limitations aside, a SWOT analysis is still useful for planning your next steps. The important thing is to foster accuracy during every step of the process. Your team has valuable insight, but employee opinions are only one part of the puzzle. They can only share what they have personally experienced, but as a business owner, you need to see the whole picture.
Here are some best practices to keep in mind:
As internal and external factors change, your strategies will need to adapt to them. It’s essential to conduct a regularly scheduled SWOT Analysis of your business to make sure you’re pivoting your strategy regularly and accurately.
Check out Cacoo , a diagramming tool for better team collaboration.
This post was originally published on June 6, 2017, and updated most recently on December 13, 2021.
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You can better understand your businesses strengths, weaknesses, opportunities and threats by using a SWOT analysis. Identify what your business is doing well and how you can improve with our SWOT analysis template.
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Download our swot analysis template, complete your swot analysis, use your swot analysis.
A SWOT analysis is a strategic planning tool used to assess the strengths, weaknesses, opportunities and threats of your business.
Developing a SWOT analysis can help you look at your business in a new way and from different directions. It can also help you to:
Our template can help you develop your SWOT analysis.
SWOT template
You can start the process by gathering a group of employees or advisors who have different perspectives on your business. If you don’t have employees, you can ask family members, business advisors or mentors. The key is to have different points of view.
Using the prompting questions below as a guide, you can conduct a brainstorming session to discuss ideas about each SWOT category. After brainstorming, create a final prioritised list of points in our SWOT analysis template. List the factors in each category from highest to lowest priority.
Strengths are internal, positive parts of your business. These are things that are within your control. Ask yourself:
Weaknesses are internal, negative factors. These are things that you might need to improve on to be competitive. Ask yourself:
Opportunities are external, positive factors that may give a competitive advantage and contribute to success. Ask yourself:
Threats include external factors beyond your control that may put your business at risk. Consider putting in place contingency plans for dealing with them if they occur. Ask yourself:
Once you have completed your SWOT analysis, it can be used to develop strategies for achieving your business goals. You can create a plan to continue building on your strengths while improving on your weaknesses. When using your SWOT analysis to create a strategy, ask yourself:
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Learn how to use SWOT analysis for growth in today’s business environment. Free downloadable SWOT template included.
Tim Stumbles
Apr 11, 2023
24 min read
In today’s rapidly changing business landscape, it is more important than ever for businesses to step up their strategic planning. One of the most widely used tools in the planning toolkit is the SWOT analysis . This technique relies on analyzing the internal and external environments of a business, aiming to gain actionable insights. Based on these findings, businesses develop strategies to capitalize on strengths, address weaknesses, take advantage of opportunities, and minimize threats .
In this article, we will take a closer look at the role of SWOT analysis in strategic planning, we’ll find some key steps for conducting a SWOT analysis and we’ll look at how to use the results to inform strategic decision-making. We will also provide some practical tips and free templates for a head start with your SWOT analysis.
SWOT stands for Strengths, Weaknesses, Opportunities and Threats . The SWOT analysis is a strategic planning tool used by businesses to assess the internal and external factors that affect them. This includes identifying and evaluating internal strengths and weaknesses , as well as external opportunities and threats .
Let’s see what each of these categories represents:
A SWOT analysis provides a structured way to identify the key factors that can impact a business or project’s success. Its role is to help organizations develop strategies that use their strengths and opportunities to their advantage while reducing their weaknesses and threats .
SWOT analysis can be applied to various scenarios, such as new product development, marketing, and business expansion. Despite the emergence of newer and more complex strategic analysis tools, SWOT analysis remains popular due to its simplicity, flexibility, and ability to provide a clear overview of a business or project’s current state.
However, it’s important to note that SWOT analysis is just one tool in a broader strategic planning toolkit. To ensure a comprehensive approach, it should be used in combination with other strategic analysis tools and frameworks.
While long used in business strategic planning, SWOT analysis still has unclear origins. It is said to have come into existence at about the same time as the concepts of business strategy and corporate planning (1960s) . Still, some sources say that SWOT was developed in the early 1950s at Harvard Business School to analyze organizational strategies in relation to their environment.
Scholars later attributed the origins of SWOT in the 1960s to Albert Humphrey at Stanford Research Institute, who analyzed Fortune 500 companies, with the aim of creating a new system of change management and control. Albert Humphrey and his research team developed the Team Action Model (TAM) in the 1960s and 1970s.
They used a tool called SOFT (Satisfactory, Opportunity, Fault, Threat) analysis to explore key areas. As Albert Humphrey described it: “What is good in the present is Satisfactory, good in the future is an Opportunity; bad in the present is a Fault, and bad in the future is a Threat”.
The four components of SWOT appeared in other publications on strategic planning by various authors by the end of the 1960s . The acronym SWOT appeared in the title of a journal article in 1972, and a 2×2 SWOT matrix is found in a 1980 article by Professor Igor Ansoff. However, he used the acronym TOSW instead of SWOT.
The first step in understanding and assessing the current state of a business or project is identifying the four SWOT elements (Strengths, Weaknesses, Opportunities, and Threats) related to that business. This process involves gathering data from relevant data sources, such as financial reports and customer feedback, and analyzing the internal and external factors.
To guide this process, a good practice is to start by asking the right questions . To answer them, you can employ techniques such as conducting market research, SWOT analysis workshops, or stakeholder interviews.
Here are some suggestions and examples for each of the SWOT elements that might help you define your own SWOT analysis framework (that can also be applied to analyze competition).
Definition:
Strengths are internal factors that give an entity an advantage over others.
Questions to ask:
Weaknesses are internal factors that limit a company’s ability to achieve its objectives. It puts the company at a disadvantage and can hinder its capacity to compete effectively in the marketplace.
Opportunities are external factors that a company can leverage to its advantage and achieve its objectives or gain a competitive advantage. They can include trends in the market, changes in customer behavior, emerging technologies, or any other factor that presents a chance for growth or improvement.
Threats are external factors that may pose a risk, may represent an obstacle or a challenge to a company’s success or competitiveness.
To perform a SWOT analysis, you should first take into consideration the following key ideas:
Among the potential limitations of the analysis are the limited availability of data, possibly biased interpretations, or setting an extremely narrow or broad scope of the analysis, which would lead to an incomplete or overwhelming assessment.
A SWOT analysis can quickly identify opportunities and areas that require attention for your company. Using a step-by-step approach may be easier to follow and can ensure a thorough and accurate analysis.
Now that we’ve seen how to approach and analyze each SWOT element, we can put together a step-by-step process for how to do the analysis:
The organization reviews its internal resources, capabilities, and performance. This can be done by analyzing financial statements, conducting employee surveys, reviewing procedures. The goal of the internal analysis is to identify the organization’s strengths and weaknesses.
The organization reviews the external environment, including industry trends, competitor analysis, and market changes. This can be done by gathering data from market research, conducting surveys, and analyzing industry reports. The goal of the external analysis is to identify opportunities and threats in the external environment.
A visual SWOT matrix can easily show users the relationships between the internal and external factors affecting a business. The SWOT matrix consists of four individual squares that form one larger square, representing strengths, weaknesses, opportunities, and threats. See below more on the SWOT matrix and its variations.
Based on the prioritized issues, develop a strategy that leverages the organization’s strengths to capitalize on opportunities and reduce the potential threats, and address the weaknesses that hinder its success. Set some goals.
As part of the strategy and based on the insights gained from the analysis, create an action plan to address issues or threats and leverage opportunities and strengths. For this, identify specific action points and prioritize them based on their potential impact and feasibility. Finally, the action points should be put on a timeline with milestones and deadlines to ensure timely execution and help monitoring progress towards achieving the goals.
An effective way to present the steps and results of your SWOT analysis is to include all on a single slide. This can be easily done with the help of the Office Timeline add-in for PowerPoint and the free downloadable templates included on this page. You can summarize the entire SWOT analysis process, using graphs and charts to make the information visually appealing and easy to understand. And you can make tweaks and customizations to match the presentation to the organization’s branding and style, using custom colors and themes and adding logos.
The results of the SWOT analysis are often presented in the form of a matrix. A SWOT matrix, also known as a SWOT analysis grid, is a tool used to visually organize the results of a SWOT analysis.
A common way to display a SWOT analysis is a f our-quadrant table with each quadrant representing one of the four elements of a SWOT analysis: strengths, weaknesses, opportunities, and threats . Within each category, information is listed to provide an inventory of relevant factors.
The SWOT matrix allows users to visualize the relationships between the internal and external factors that have an impact on a business. It can make it easier to identify potential strategic actions based on these factors.
There are several variations of the SWOT matrix. Each variation has its own unique approach to organizing and analyzing information, allowing organizations to gain a more nuanced understanding of their situation.
The TOWS (Threats, Opportunities, Weaknesses, Strengths) matrix builds on the SWOT matrix by suggesting specific strategies based on the interactions between the four elements. It is a tool for situational analysis that was developed by Heinz Weihrich . The TOWS matrix takes the SWOT analysis further by identifying how to use the SWOT factors to develop specific strategies.
It involves identifying the strengths, weaknesses, opportunities, and threats, and then creating specific actions based on these factors. For example, a strength can be used to capitalize on an opportunity, or a weakness can be addressed to minimize a threat.
Here are the four categories of factors combinations:
The SOAR framework is a newer variation that focuses more on strengths and opportunities and aims to identify “strengths, opportunities, aspirations, and results” to guide strategic planning.
“SOAR is a strategic planning framework with an approach that focuses on strengths and seeks to understand the whole system by including the voices of the relevant stakeholders. SOAR conversations center on what an organization is doing right, what skills should be enhanced, and what is compelling to those who have a ‘stake’ in the organization’s success.” (Stavros, J. & Hinrichs, G. 2009. The thin book of SOAR: Building strengths-based strategy – as cited by the Libraries of University of Missouri ).
SVOR is the SWOT of project management. It looks at Strengths, Vulnerabilities, Opportunities, and Risks from the point of view of the mathematical links between them. Also, SVOR compares project elements along two axes: internal and external, and positive and negative.
To avoid biased or incomplete analyses, take into account that any SWOT analysis can have its limitations. For example, you should prevent:
Since a SWOT analysis is a complex process, one can easily overlook critical aspects. We’ve thought of some tips that might help minimize this risk and ensure a more structured and objective analysis:
Define the scope of the analysis to ensure that it covers all relevant factors and focus on key issues. Identify the most critical internal and external factors that impact the organization and prioritize them based on significance and relevance.
To get a well-rounded view of the organization’s situation, seek input from a variety of stakeholders (including customers, employees) and industry experts. Validate your assumptions by checking them against the available data and seeking input from other stakeholders. This can help you avoid making unfounded assumptions or overemphasizing certain factors.
After gathering a significant amount of information, analyze it objectively, avoiding personal biases. Consider both positive and negative factors in your analysis. It is easy to focus on strengths and opportunities, but it is equally important to identify weaknesses and threats that may be affecting performance.
Guide the analysis with the help of a 4-quadrant SWOT matrix to cover all the factors. Here are some further possible uses of the matrix to deepen your analysis and gain other perspectives:
Regularly conducting an objective SWOT analysis is a good idea if you want to achieve a strong alignment between a company’s resources and its external environment. This helps identify current strengths that might become future weaknesses (or vice versa). Plans can thus be tailored to fit changing circumstances.
Though SWOT analysis is a tiring job, planners must take their time to make a thorough evaluation and review in order to accurately reveal opportunities and threats that may impact their business positively or negatively . Additionally, being aware of common limitations, such as bias and oversimplification, can help avoid pitfalls and ensure the analysis provides a clear framework for making informed decisions.
Once you have completed your SWOT analysis, it is time to develop strategies for your business based on your findings. A basic SWOT matrix presents each factor equally, without weighing their overall importance in your business plan.
To get the most out of your analysis, use a TOWS matrix to add an additional layer of prioritization in your strategy building, based on the interactions between the four SWOT elements.
Look at how the different sections of your diagram overlap:
How can you use your strengths to take advantage of opportunities? To take advantage of opportunities by using your strengths, you need to correctly identify the opportunities that align with your strengths .
Think of this example: if you are an IT company with expertise in cloud computing, you can use that strength to develop new cloud-based services to capitalize on the growing demand for cloud-based solutions.
How can you apply your strengths to mitigate potential threats? What you can do is develop new capabilities, innovate and improve based on your strengths .
Example: If one of the potential threats is increasing competition, you can use your expertise to develop new products or services that give your company a competitive edge. Or if there is a potential threat from changing customer preferences, you can use your strengths to develop products or services that better align with those preferences.
How can you use available opportunities to overcome your weaknesses? To overcome your weaknesses and gain a competitive advantage in the market, first you need to identify the available opportunities that could be useful for your goals .
Such opportunities can be strategic partnerships with companies that have the resources to help you overcome your weakness, entry on a new market (you can look for opportunities to enter new markets where your weaknesses may not be as relevant), investing in training and development (if there is a weakness in a particular skillset), technology adoption, and the list goes on.
How can you address your weaknesses to lessen possible threats? First, you need to objectively analyze your weaknesses and the potential threats they may pose, so that you can identify the strategies to address them . Some of the solutions in this area could be improving your processes and building partnerships.
Processes optimization will mitigate potential threats that may arise from inefficiencies or errors. Collaboration with organizations (or individuals) who have strengths in the areas of your weaknesses can minimize potential threats that may arise from your weaknesses.
In short, after a business conducts a thorough analysis of strengths, weaknesses, opportunities, and threats, the strategic planning process is only beginning . Also, being agile and adaptable is a must in today’s rapidly changing market conditions. As new opportunities and threats can emerge, businesses can stay ahead of the competition only by constantly reviewing and updating their strategies.
Our downloadable PowerPoint templates can help project managers to create professional-looking project plans that include objectives, scope, timelines, and resources and that can be easily visualized and communicated to stakeholders, team members, and other interested parties.
In addition to the SWOT matrix, our templates also includes an action plan , created with Office Timeline , to help project managers move forward to implementation. Thus, project managers can easily identify and prioritize the steps needed to bring their projects to completion .
The templates come in three different design versions, allowing users to choose the format that best suits their needs. You can download the template file for free and further customize and improve it. This flexibility allows project managers to create visually appealing and engaging project plans that capture the attention of their audience .
And best of all, no design skills are required. Simply fill in the template with your data, and you’re ready to go.
At first glance, conducting a SWOT analysis might seem daunting, especially for small businesses or those without a dedicated strategy team. However, with the right approach and tools, it can be a relatively straightforward process.
Our downloadable PowerPoint template is one such tool that can help businesses to get started with their SWOT analysis . It makes the process so much easier, guiding users through each step of the process and providing a clear framework for evaluating internal and external factors.
Involving a thorough and objective evaluation and focusing on specific objectives, a well-conducted SWOT analysis still remains an important tool for businesses seeking to gain a competitive edge in today’s dynamic marketplace. Businesses gain key insights and a deeper understanding of their situation and are able to develop effective strategies for growth.
Let’s find out answers and solutions to some of the frequently asked questions about the SWOT analysis.
A SWOT analysis is a strategic planning tool that helps organizations identify their Strengths , Weaknesses , Opportunities , and Threats . It involves evaluating the internal and external factors that affect the organization’s performance and decision-making. The analysis can be used to plan, develop and implement effective strategies in order to achieve the organization’s goals.
Conducting a SWOT analysis provides several benefits to businesses/organizations:
To conduct a SWOT analysis, you need to identify the internal and external factors that affect your organization’s performance. This involves evaluating the strengths, weaknesses, opportunities, and threats, and developing strategies to leverage them. Here are some suggested steps that you can follow when conducting a SWOT analysis:
The four elements of a SWOT analysis are Strengths , Weaknesses , Opportunities , and Threats . Strengths and weaknesses refer to the internal factors of an organization, while opportunities and threats refer to the external factors. Identifying and analyzing these four elements helps businesses develop effective strategies.
Strengths refer to the internal factors that give an organization a competitive advantage, for example, unique skill or brand reputation. Opportunities, on the other hand, refer to external factors that the organization can capitalize on, such as emerging market trends or changing customer preferences. In other words, strengths are the organization’s existing advantages, while opportunities are external factors that can provide additional advantages if used correctly.
Here are some examples of common weaknesses that businesses may identify in a SWOT analysis:
By analyzing the internal and external factors that affect the organization’s performance, SWOT provides insights that can be used when developing effective strategies. We suggest these steps that you can follow in the process of materializing the results of the SWOT analysis into strategic decisions:
The frequency of conducting a SWOT analysis varies depending on the business’s industry, size, and the changes in the market. As a general guideline, businesses should conduct a SWOT analysis at least once a year to evaluate current situation, stay up to date with changes in the industry and adjust strategies accordingly.
However, there are some specific moments when a SWOT analysis is necessary, for example, at the launch of a new product, when entering a new market, or when there is a significant shift in the business environment (changes in regulations or market conditions).
The frequency of conducting a SWOT analysis should be determined based on the business’s unique circumstances and the need to make informed strategic decisions or update them.
Yes, SWOT analysis can be used for personal development. It can be used as a self-assessment tool, helping with identifying and analyzing individual strengths, weaknesses, opportunities, and threats. Personal SWOT analysis can help someone gain a better understanding of him/herself and their personal and professional goals. SWOT analysis can be a valuable tool for both career planning and personal growth.
Yes, there are multiple tools and templates available to help with conducting a SWOT analysis. The choice depends entirely on your needs and preferences.
First, there are specialized software programs that can automate the SWOT analysis process, allowing teams to collaborate on the analysis and generate visualizations and reports. These may be available as autonomous SWOT analysis creators/generators or included in more complex software business analysis tools.
While there are many benefits to using them, there are also some potential disadvantages to consider that may overpass the advantages. Think of high costs, steep learning curve, difficulty to use, lack of customization, or security and privacy concerns.
Yes, there are free SWOT templates that are customizable and provide a basic but consistent framework. Templates help save time and resources and can make it easier to compare and prioritize the resulting insights, particularly for those who need to conduct SWOT analyses on a regular basis.
The downside here being that the use of templates can lead to oversimplification of complex issues and that some may not be applicable to all organizations and industries.
Examples of free, easy-to-get templates:
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A SWOT analysis is a strategic planning tool that an organization can use to thoroughly evaluate a business or product. SWOT is an acronym that stands for strengths, weaknesses, opportunities, and threats.
It allows businesses to evaluate their company’s competitive advantage and the flaws of its current business model and create strategies to capitalize on or reduce these observations.
In this article, we’ll discuss the key steps on how to do a SWOT analysis and give several brief examples highlighting the strategy being utilized in different situations.
One of the best things about performing a SWOT analysis is that it can be learned quite quickly and mastered with just a few attempts. Even though each framework is individualized, here are the basic steps involved in building a standard SWOT analysis .
Before embarking on a SWOT, it is vital to define your objectives. This could include things such as developing a comprehensive schematic of the business model and organization as well as the interactions between the various components, determining the competitive advantage and weaknesses of a new product before its rollout, or determining the feasibility of a new policy.
During this stage, it is crucial to determine the resources that would be necessary for you to carry out the exercise, note which of these are accessible, gather these materials, verify the authenticity and reliability of this data, and what limitations you face in terms of data gathering and accuracy. It is also important to ensure that this data is gathered from different sources, perspectives, and levels of the organization to enable you to create a holistic SWOT analysis.
After obtaining data from a wide range of sources, analyze these facts into helpful information and use them to form evidence-based observ–ations. For example, a business that has maintained a strong growth trajectory and a healthy balance sheet over the years can be said to have positive fiscal indicators.
This stage should be akin to a brainstorming session, with members from different divisions within the organization as well as external parties, being allowed to contribute significantly. At this stage, the focus is more on getting as many points as possible, rather than the relevancy or credibility of these inferences.
After making several key points such as the one above, each of these inferences should be arranged in the relevant sections (namely strengths, weaknesses, opportunities, and threats) using the general principles outlined in the article.
Here, the ideas which have been obtained are further refined and can be prioritized according to relevance and importance. Points that are less credible or only minimally important can as well be discarded, allowing you to craft a more concise schematic.
The final step is crafting a swot analysis table. This involves creating a matrix and dividing it into four sections. The internal factors (strengths and weaknesses) are listed above, with the strengths on the left and the weaknesses on the right. On the other hand, the external factors (opportunities and threats) are listed below, with opportunities on the left and threats on the right. Simply list your key points under the appropriate sections to complete the SWOT analysis.
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This is not technically a part of the SWOT analysis technique; however, it is important to remember that the entire point of creating this analytic framework was to carry out a strategic management plan. This means that the business will set out a series of plans to meet the objectives which it has previously outlined, as well as create some reliable metrics or milestones which enable it to measure its progress toward achieving these goals.
To better understand how a SWOT analysis is created, let’s take a look at some examples of SWOT analysis. We’ll analyze three examples, the multinational activewear brand Nike , a hypothetical mom-and-pop diner called Joe’s Brooklyn Burgers, and another hypothetical scenario involving a new product rollout.
From their iconic “swoosh” logo to their equally iconic range of footwear, Nike, Inc. is one of the most easily recognizable activewear brands in the world. While probably best known for its range of iconic footwear, most notably the Air Jordan brand of sneakers, Nike, Inc. is also a leading brand in other sports gear, such as activewear, sports equipment, and wearable fitness tech.
The Nike business model is famous for finding the perfect balance between fashion and functionality when it comes to their products, making them quite popular among both athletes and non-athletes alike. Let’s take a look through this Nike SWOT analysis , which was designed by our platform to figure out how the brand came to dominate the sportswear market.
The objective of this SWOT analysis was to identify the competitive advantage of the brand and educate readers on how the corporation came to dominate the world of activewear. This was identified to be its strong brand equity, low-cost manufacturing, heavy investment in innovative technologies, as well as improving direct-to-consumer sales.
Next, let’s take a look at a SWOT analysis for a small, independent restaurant called Bob’s Brooklyn Burgers. This will allow us to examine how the SWOT analysis of a small business differs from that of a large multinational corporation.
Our hypothetical business is a small, family-owned diner based in Brooklyn that caters to a number of local customers and offers a unique Brooklyn-themed menu. The business has been operating successfully over several decades but has run into some lean times in recent years. Let’s examine the SWOT analysis of this business to better understand the issues it faces and as well craft a brief outline of how it can reclaim its former glory.
Proximity to customers. One of the advantages of being a locally popular restaurant is that they are closer to their customers, which gives them local dominance as well as an advantage over franchised restaurants that may be located further away.
The objective of this SWOT analysis was to determine the issues plaguing the diner and help it design a strategy to improve its current business model. To achieve this, a matching and converting strategy will be used. This means that we will attempt to combine the strengths and opportunities of the business while converting the weaknesses and threats into positive indicators, or at least reducing their negative effects.
First of all, the company can outsource the various professional services listed above in order to enable it to focus on the parts of the business operation where it has a significant advantage over its competitors. This includes providing a top-notch customer experience as well as cooking top-quality meals.
Another option they could look into is utilizing the reach of social media as an avenue to build a strong online food delivery service. The fact that many of their customers are local and live relatively close to the establishment also makes this feasible. This also has the added advantage of diversifying their revenue stream .
Lastly, the company can focus on using its reputation for providing great meals as a focal point for expanding into new territories and new markets.
Now that we have discussed how to perform a SWOT analysis on both large and small companies, let’s focus on the last example in this article: How to perform a SWOT analysis on a hypothetical product launch.
For this example, we will perform a SWOT analysis on the rollout of a hypothetical high-end gas stove known as the Turbo Burner 2000. This example will highlight the competitive advantage of the product as well as the challenges it may face during its launch.
Catering to a narrow niche allows them to better target their branding efforts and increase their profit margin by focusing resources on their key market, which reduces their customer acquisition cost. It also creates an impression of exclusivity, which only serves to further drive up the image of the company as a luxury brand;
Performing a SWOT analysis may be one of the most important activities that any business can carry out within its lifetime. Whether this is done regularly or just as a one-time evaluation, understanding how to get the best out of the technique is key to fully utilizing the benefits and understanding the limitations of the technique.
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SWOT analysis is a framework for identifying and analyzing an organization's strengths, weaknesses, opportunities and threats. These words make up the SWOT acronym.
The primary goal of SWOT analysis is to increase awareness of the factors that go into making a business decision or establishing a business strategy. To do this, SWOT analyzes the internal and external environment and the factors that can impact the viability of a decision.
Businesses commonly use SWOT analysis, but it is also used by nonprofit organizations and, to a lesser degree, individuals for personal assessment. SWOT is also used to assess initiatives, products or projects. As an example, CIOs could use SWOT to help create a strategic business planning template or perform a competitive analysis.
The SWOT framework is credited to Albert Humphrey, who tested the approach in the 1960s and 1970s at the Stanford Research Institute. SWOT analysis was originally developed for business and based on data from Fortune 500 companies. It has been adopted by organizations of all types as a brainstorming aid to making business decisions.
SWOT analysis is often used either at the start of, or as part of, a strategic planning process. The framework is considered a powerful support for decision-making because it enables an organization to uncover opportunities for success that were previously unarticulated. It also highlights threats before they become overly burdensome.
SWOT analysis can identify a market niche in which a business has a competitive advantage . It can also help individuals plot a career path that maximizes their strengths and alert them to threats that could thwart success.
This type of analysis is most effective when it's used to pragmatically recognize and include business issues and concerns. Consequently, SWOT often involves a diverse cross-functional team capable of sharing thoughts and ideas freely. The most effective teams would use actual experiences and data -- such as revenue or cost figures -- to build the SWOT analysis.
As its name states, a SWOT analysis examines four elements:
A SWOT matrix is often used to organize the items identified under each of these four elements. The matrix is usually a square divided into four quadrants, with each quadrant representing one of the specific elements. Decision-makers identify and list specific strengths in the first quadrant, weaknesses in the next, then opportunities and, lastly, threats.
Organizations or individuals doing a SWOT analysis can opt to use various SWOT analysis templates. These templates are generally variations of the standard four-quadrant SWOT matrix.
A SWOT analysis generally requires decision-makers to first specify the objective they hope to achieve for the business, organization, initiative or individual. From there, the decision-makers list the strengths and weaknesses as well as opportunities and threats.
Various tools exist to guide the decision-making process . They frequently provide questions that fall under each of the four SWOT elements.
For example, participants might be asked the following to identify their company's strengths: "What do you do better than anyone else?" and "what advantages do you have?" To identify weaknesses, they may be asked "where do you need improvement?" Similarly, they'd run through questions such as "what market trends could increase sales?" and "where do your competitors have market share advantages?" to identify opportunities and threats.
The end result of a SWOT analysis should be a chart or list of a subject's characteristics. The following is an example of a SWOT analysis of an imaginary retail employee:
A SWOT analysis should be used to help an entity gain insight into its current and future position in the marketplace or against a stated goal.
Organizations or individuals using this analysis can see competitive advantages, positive prospects as well as existing and potential problems. With that information, they can develop business plans or personal or organizational goals to capitalize on positives and address deficiencies.
Once SWOT factors are identified, decision-makers can assess if an initiative, project or product is worth pursuing and what is needed to make it successful. As such, the analysis aims to help an organization match its resources to the competitive environment.
A SWOT analysis can be used to assess and consider a range of goals and action plans , such as the following:
SWOT analysis is similar to PEST analysis, which stands for political, economic, social and technological. PEST analysis lets organizations analyze external factors that affect its operations and competitiveness.
Among the advantages of using a SWOT approach are the following:
Although a SWOT snapshot is important for understanding the many dynamics that affect success, the analysis does have limits, such as the following:
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Getty. A SWOT analysis is a framework used in a business's strategic planning to evaluate its competitive positioning in the marketplace. The analysis looks at four key characteristics that are ...
This financial overview sets the stage for a detailed SWOT analysis, providing investors with a comprehensive understanding of the company's strategic position. Strengths
Here's how to effectively write a strength in a SWOT analysis: Identify Internal Positive Attributes: Focus on internal factors that are within the control of the business. These can include resources, skills, or other advantages relative to competitors. Consider areas like strong brand reputation, proprietary technology, skilled workforce ...
SWOT analysis is a technique for assessing the performance, competition, risk, and potential of a business, as well as part of a business such as a product line or division, an industry, or other ...
A SWOT analysis is a technique used to identify strengths, weaknesses, opportunities, and threats in order to develop a strategic plan or roadmap for your business. While it may sound difficult, it's actually quite simple. Whether you're looking for external opportunities or internal strengths, we'll walk you through how to perform your ...
1. SWOT gives you the chance to worry and to dream. A SWOT analysis is an important step in your strategic process because it gives you the opportunity to explore both the potential risks and the exciting possibilities that lie ahead. You're giving yourself the space to dream, evaluate, and worry before taking action.
For startups, a SWOT analysis is part of the business planning process. It'll help codify a strategy so that you start off on the right foot and know the direction that you plan to go. How to do a SWOT analysis the right way. As I mentioned above, you want to gather a team of people together to work on a SWOT analysis.
A SWOT analysis is essential for developing a business plan that maximizes a company's strengths, minimizes its weaknesses, and takes advantage of opportunities while mitigating threats. Here are some of the reasons why a SWOT analysis is important for businesses: Identifies key areas for improvement. By conducting the SWOT analysis, businesses ...
Existing businesses can use a SWOT analysis, at any time, to assess a changing environment and respond proactively. In fact, I recommend conducting a strategy review meeting at least once a year that begins with a SWOT analysis. New businesses should use a SWOT analysis as a part of their planning process.
A SWOT analysis is a high-level strategic planning model that helps organizations identify where they're doing well and where they can improve, both from an internal and an external perspective. SWOT is an acronym for "Strengths, Weaknesses, Opportunities, and Threats. SWOT works because it helps you evaluate your business by considering ...
Part 6 of 7 in the Smart Business Planning ... A SWOT analysis evaluates your business's Strengths, Weaknesses, Opportunities, and Threats. ... Make a step-by-step action plan to evaluate their importance and mitigate the risk they post for the business. Evaluate the opportunities. Structure a plan that shows how you might take advantage of ...
A SWOT analysis can help a small business owner or business assess a company's position to determine the most optimal strategy going forward. ... or you can use a SWOT analysis as a part of broader strategic planning. ... This is especially important if you plan to use your SWOT analysis as a more formal document that might be disseminated ...
Published on Dec. 13, 2022. Image: Shutterstock / Built In. A SWOT (strengths, weaknesses, opportunities, threats) analysis is a visual framework used for strategic planning across all types of businesses and organizations. SWOT analyses are made up of four components that will help you determine the output of your team's analysis.
A SWOT analysis is part of a strategic planning process that companies use to assess their strengths, weaknesses, opportunities, and threats. A SWOT analysis can be a helpful technique for businesses to utilize when evaluating their business strategy or plan of action. In this blog article, we cover essential aspects of a SWOT analysis ...
The SWOT analysis is a simple but comprehensive strategy for identifying not only the weaknesses and threats of an action plan, but also the strengths and opportunities it makes possible. However ...
How to Do a SWOT Analysis. To perform a SWOT (strength, weakness, opportunities, and threats) analysis, assemble a matrix and take an objective look at your business. Write down your observations, summarize your findings, and plan your next steps together with your team. "A SWOT analysis is designed to shed light on four separate aspects of ...
Key Highlights. SWOT is used to help assess the internal and external factors that contribute to a company's relative advantages and disadvantages. A SWOT analysis is generally used in conjunction with other assessment frameworks, like PESTEL and Porter's 5-Forces. Findings from a SWOT analysis will help inform model assumptions for the ...
December 13, 2021. A SWOT Analysis is an integral part of any good business plan. Whether you've been in business for ten years or you're just getting specifics together for a new product, a thoughtful SWOT analysis will inform every part of your business. SWOT is an acronym that stands for Strengths, Weaknesses, Opportunities, and Threats.
A SWOT analysis is a strategic planning tool used to assess the strengths, weaknesses, opportunities and threats of your business. Developing a SWOT analysis can help you look at your business in a new way and from different directions. It can also help you to: create or fine tune your business strategy. prioritise areas for business growth to ...
Key Takeaways: SWOT stands for S trengths, W eaknesses, O pportunities, and T hreats. A "SWOT analysis" involves carefully assessing these four factors in order to make clear and effective plans. A SWOT analysis can help you to challenge risky assumptions, uncover dangerous blindspots, and reveal important new insights.
5. Create an action plan. As part of the strategy and based on the insights gained from the analysis, create an action plan to address issues or threats and leverage opportunities and strengths. For this, identify specific action points and prioritize them based on their potential impact and feasibility.
Step 6: Draw the SWOT Analysis Table. The final step is crafting a swot analysis table. This involves creating a matrix and dividing it into four sections. The internal factors (strengths and weaknesses) are listed above, with the strengths on the left and the weaknesses on the right. On the other hand, the external factors (opportunities and ...
SWOT analysis is a framework for identifying and analyzing an organization's strengths, weaknesses, opportunities and threats. These words make up the SWOT acronym. The primary goal of SWOT analysis is to increase awareness of the factors that go into making a business decision or establishing a business strategy.