why swot analysis is important essay

SWOT Analysis: Meaning, Importance, and Examples

SWOT Analysis Meaning

SWOT analysis is a strategic planning tool used to evaluate a business or project’s strengths, weaknesses, opportunities, and threats. It involves examining internal and external factors that may impact the success or failure of a venture.

The acronym SWOT stands for:

• Strengths: These are the positive attributes and resources that a business or project has at its disposal. This could include a strong brand reputation, skilled employees, or valuable intellectual property.
• Weaknesses: These are the negative aspects or areas of improvement for a business or project. Weaknesses could include lacking funding, outdated technology, or poor leadership.
• Opportunities: These are external factors that could benefit a business or project. Opportunities could include new markets, emerging technologies, or regulation changes that could make operating easier.
• Threats: These are external factors that could harm a business or project. Threats could include increased competition, economic downturns, or changes in consumer behavior.

By identifying and analyzing these factors, a SWOT analysis can help businesses and organizations develop strategies to capitalize on strengths and opportunities while minimizing weaknesses and threats.

Top 5 Software for SWOT Analysis

Importance of SWOT analysis

SWOT analysis is an important tool for businesses and organizations for several reasons:

• Strategic planning: SWOT analysis helps businesses and organizations to develop effective strategies by identifying and understanding their strengths, weaknesses, opportunities, and threats. This information can be used to create a roadmap for achieving goals and objectives.
• Risk management: SWOT analysis can help businesses and organizations to identify potential risks and threats, allowing them to take proactive measures to mitigate them. This can help reduce the likelihood of negative outcomes and protect the business from potential harm.
• Resource allocation: SWOT analysis can help businesses and organizations to allocate resources effectively. Businesses can focus on areas likely to generate the most returns by identifying strengths and opportunities. At the same time, weaknesses and threats can be addressed to reduce waste and prevent resource misallocation.
• Competitive advantage: SWOT analysis helps businesses and organizations to identify their unique strengths and capabilities. They can gain a competitive advantage in the market by leveraging these strengths and differentiating themselves from competitors.
• Continuous improvement: SWOT analysis is an iterative process that can be used to monitor and evaluate a business or organization’s performance continually. By regularly reviewing their strengths, weaknesses, opportunities, and threats, they can identify areas for improvement and adjust their strategies accordingly.

SWOT analysis is essential for businesses and organizations to develop effective strategies, manage risks, allocate resources, gain competitive advantage, and continuously improve their performance.

SWOT analysis examples

Here are some examples of SWOT analysis for different scenarios:

Business startup:

• Strengths: Unique product or service, experienced founding team, a strong network of contacts.
• Weaknesses: Limited financial resources, lack of brand recognition, small customer base.
• Opportunities: Growing demand for the product or service, the potential for market expansion, and favorable industry trends.
• Threats: Intense competition, economic instability, regulatory changes.

Established business:

• Strengths: Strong brand recognition, loyal customer base, efficient operations.
• Weaknesses: Limited product line, outdated technology, high employee turnover.
• Opportunities: Emerging markets, new product development, strategic partnerships.
• Threats: Increased competition, changing consumer preferences, economic downturns.

Nonprofit organization:

• Strengths: Dedicated volunteers, strong community support, effective fundraising strategies.
• Weaknesses: Limited funding, small staff size, lack of infrastructure.
• Opportunities: Collaboration with other nonprofits, increased public awareness of the cause, and potential government grants.
• Threats: Donor fatigue, changing priorities of the community, negative media coverage.

Personal career development:

• Strengths: Strong skillset, relevant work experience, positive professional reputation.
• Weaknesses: Limited formal education, lack of industry connections, gaps in skillset.
• Opportunities: Continuing education, networking events, career advancement opportunities.
• Threats: Job market saturation, economic downturns, changing industry trends.

These are just a few examples of how SWOT analysis can be applied in different contexts. The analysis can be customized based on the specific circumstances of the situation or organization.

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Your Full Guide on How to Write a SWOT Analysis

SWOT analysis is one of those tools that you'll come across in any field. For example, it's used to define a product's competitive advantage, create a strategic plan for a business, and gain insights into consumer behavior. 

But it's not just businesses that benefit from this technique. Personal SWOT analysis helps people plan their careers in the most optimal way possible, too.

As versatile as it is, SWOT analysis is not at all complicated. That's why its adoption rate is through the roof. And that's why you should learn how to take advantage of it, whether for an assignment or not.

To help you out with that, let's rely on our rich writing services experience and use it to break down in detail:

• What a SWOT analysis is;
• How it's applied in business strategies and marketing efforts;
• How to use the SWOT framework for any task;
• 4 real-world SWOT analysis examples.

What Is SWOT Analysis, Exactly?

Any SWOT analysis template contains four sections, presented in a two-by-two matrix:

• Strengths – your inherent qualities, resources, or skills that set you apart from the rest;
• Weaknesses – whatever is or may be stopping you or the business from performing well;
• Opportunities – external factors that you can use to your advantage to become more competitive;
• Threats – external factors that may harm your performance in the short or long run.

Internal and External Factors in SWOT Analysis

Each section represents a list of factors. These sections can be grouped into two broader categories: internal and external factors.

Internal factors – Strengths and Weaknesses in the first row – are inherent to you or the company. However, you can also do something about them if need be. Think of your skills as a professional if you're working on a personal SWOT analysis, for example.

External factors – Opportunities and Threats in the second row – aren't under your personal or the company's control. But they have an impact on you or the business, nonetheless. Once-in-a-lifetime pandemics, inflation, or industry trends are good examples here.

Positive vs Negative Factors

Another way to think about the SWOT matrix is by juxtaposing negative and positive factors :

• Strengths and Opportunities can help you or the company achieve your goal or succeed at a project. So, they represent positive factors.
• Weaknesses and Threats can negatively impact your progress and have to be mitigated. They're negative factors.

Why is SWOT Analysis Important?

Now that the question ‘What is a SWOT Analysis?’ is answered, you must have several others on your mind. So let's answer them one by one.

Who Should Do a SWOT Analysis?

Businesses of all sizes and in all industries can benefit from SWOT analyses. So, whether you're a prospective entrepreneur, a small business owner, or a C-level executive, this technique will be a useful arrow in your quiver.

You can also benefit from conducting a personal SWOT analysis. It would be best if you did it when looking for a job or facing a major life decision.

Why Should You Do a SWOT Analysis?

At its core, SWOT analysis is a strategic planning technique. It's meant to help you organize all the factors. That, in turn, enables you to gain key insights into where you stand and how you can move from point A to point B.

How does it help you in strategic planning, exactly? The SWOT matrix shows you:

• Which strengths you should maximize and emphasize;
• Which weaknesses you should minimize and keep at bay;
• Which opportunities you can take advantage of;
• Which threats you should look out for and counter.

All of this leads to one outcome: better, more informed decision-making. Plus, SWOT analysis is notorious for challenging your assumptions as long as everyone involved is straightforward and honest in their answers.

What Can SWOT Framework Be Used For?

Now, let's talk about real-life practical applications of this technique. Here are three SWOT analysis examples:

• Choosing the business model for a new enterprise;
• Creating a break-even analysis and a business plan;
• Analyzing the company's quarterly and annual performance.

At a personal level, you can also conduct your own SWOT analysis to:

• Increase your chances of landing a job;
• Position yourself for getting a promotion;
• Understand what needs to change in your life in general.

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How to Conduct a SWOT Analysis in 8 Steps

SWOT analysis isn't complicated to conduct, and that's why they are so popular. Yet, it might be a wrong first impression.

A good SWOT analysis can take hours and should involve multiple people in a brainstorming session. It should also be as objective as possible – which can be harder to achieve than it seems.

So, how do you use a SWOT analysis – and get a quality result for your strategic decision-making process? Here's your step-by-step SWOT analysis example that you can use as a guide. If you need a custom writing -address to professionals.

1. Determine Your Goal

Starting brainstorming without a goal means getting into the SWOT analysis blind. And your SWOT matrix will be useless – or misleading – in the long run.

For example, depending on your goal, the same factor can be a key strength or an irrelevant note. For example, if you aim to reach the 18-25 demographic in your marketing campaign, your active presence on TikTok will be a great asset. But if you need to find a way to attract more quality candidates in the hiring process, the TikTok presence will only help you a little.

So, zero in on what you want to achieve with this SWOT analysis. This can be a decision you or the company have to make – for example, whether to launch a certain product line. Your goal can also be to solve a certain problem or to create/reassess your strategy.

2. Do Your Research

Your research wouldn't be complete if you googled ‘What is a SWOT analysis?’ You'll need a lot of data during your brainstorming session. If you have it, you'll avoid guessing your company's or your own strengths or external threats related to your goal.

What Data to Look For

Your research should consist of two parts:

• Internal research . You'll need every piece of information on your or the company's performance to pinpoint the internal factors in SWOT analysis. That can include financial, sales, marketing, and other reports with key metrics.
• External research . Gather the data on your competitors, the market, the company's position and market share, and the industry as a whole. This data will be the basis for assessing your opportunities and threats.

There's one footnote, though. Depending on the goal, you'll need different data sets. So, focus on relevant data.

3. Pinpoint Your or Your Organization's Strengths

Now, it's time for the brainstorming session. If you're doing a SWOT analysis for a business, go with it: bring the right people to the table, virtual or not. It'll help you get a more objective, realistic, and complete matrix.

Start with the internal factors, namely your internal strengths: they're always easier to home in on.

Need a SWOT analysis example of a company's strengths? Here are five of them:

• Outstanding customer service with a high satisfaction rate;
• Strong financial performance;
• The first-mover advantage;
• Positive brand attributes;
• Strong technical expertise in the field.

5 Questions to Ask

Here are five questions to kick off your brainstorming and help you discover your company's strengths – or your own:

• What do you or the company do well?
• What are your strongest assets?
• Is there something only you or the company do?
• What is your competitive edge?
• What do customers appreciate about the company?

4. Zero in on Your or Your Company's Weaknesses

Now, it's time to move on to a more difficult part of assessing your internal factors: your weaknesses. Take a hard look at your or the business's performance and define what could be going better. Don't try to embellish the truth here!

Keep in mind: there are some weaknesses that you can eliminate and some others that you can only mitigate.

Looking for weaknesses SWOT analysis examples for students who run their businesses? Here are five of them:

• Poor brand recognition among the target audience;
• Suboptimal employee productivity;
• Limited resources, human or otherwise;
• Lack of intellectual property for key technologies;
• Long delivery times.

To explore your personal or business weaknesses, ask the following five questions:

• What do your competitors beat you at?
• What do customers complain about?
• What is holding back your or the company's success?
• What resources do you or the company lack?
• What are the gaps in your internal business processes?

5. Identify External Opportunities

Before you can exploit opportunities, you need to identify them in your SWOT analysis – and determine which ones are worth using, too.

For that, you'll need to turn to the external environment research you've done. Then, look at that data and pinpoint which trends or events you could take advantage of.

Need a SWOT analysis example or two here? Take a look at these three business opportunities:

• New markets emerging within the industry;
• New advertising channels rising to prominence;
• Particular customer needs that remain underserved.

4 Questions to Ask

If you don't know how to start zeroing in on opportunities, start with these four questions:

• Are there ways to gain useful resources you don't have or have little of?
• Are there any technological advancements that can help you mitigate your weaknesses?
• Are there any new or overlooked opportunities that you can exploit?
• How can the current economy or market trends be of use to you?

6. Home in on Potential Threats

Time to move on to the final part of a standard SWOT analysis: threats. These external trends and events can get in your way – or already are.

If you're working on a personal SWOT analysis, threats can include:

• High competition for the job you're after;
• Potential layoffs due to a financial crisis.

If you're conducting one for a large company or a small business, negative external factors can include:

• New emerging competitors, direct or indirect;
• New regulations that can entail considerable additional costs for the business;
• Unfavorable investment climate.

3 Questions to Ask

If you need a push in the right direction, here are three questions to help you zero in on the threats:

• Who are your competitors, and what is their market position?
• What is the state of the economy, industry, and market? Are they in decline?
• Are there any new regulations that can harm the business?

7. Review Your SWOT Analysis Matrix

Having a good SWOT analysis right after brainstorming is impossible. You need to review every factor you've written down and edit the list. Leave only the elements that truly matter – and make them more specific if required.

3 Things to Pay Attention to

There are some common caveats that you can overlook if you need to be more careful during this step. Here are three of them to avoid:

• Factors that aren't specific enough – clarify or cross them out;
• Factors that aren't evidence-based – find proof or get rid of them;
• Factors that are over- or underestimated – have a fresh pair of eyes to look at the list.

8. Decide on the Solution

Once you've finished filling out and editing your SWOT analysis template, your work is only beginning. Now, you need to take your SWOT matrix and use your findings to find the solution to your key issue.

4 Questions to Pose

Here are four questions to guide you in your solution-seeking:

• How can you maximize your strengths? Which ones should be the top priority to boost?
• How can you mitigate or eliminate your weaknesses? Which ones should be taken care of first?
• Which opportunities should you take advantage of? Which ones will pay off the most?
• Which threats can do the most harm? How can you limit their impact?

4 SWOT Analysis Examples for Students

Need something more than just a SWOT analysis template? Let's see how this tool can be applied to practice with these four real-world SWOT analysis examples for students.

But if these sample SWOT analysis still don't help you, don't panic just yet. You can always order an essay online and let professionals worry about it. And no, it won't cost you a small fortune!

Amazon and Tesla Analysis

Apple and personal swot analysis, are you drowning in schoolwork.

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Daniel Parker

is a seasoned educational writer focusing on scholarship guidance, research papers, and various forms of academic essays including reflective and narrative essays. His expertise also extends to detailed case studies. A scholar with a background in English Literature and Education, Daniel’s work on EssayPro blog aims to support students in achieving academic excellence and securing scholarships. His hobbies include reading classic literature and participating in academic forums.

is an expert in nursing and healthcare, with a strong background in history, law, and literature. Holding advanced degrees in nursing and public health, his analytical approach and comprehensive knowledge help students navigate complex topics. On EssayPro blog, Adam provides insightful articles on everything from historical analysis to the intricacies of healthcare policies. In his downtime, he enjoys historical documentaries and volunteering at local clinics.

Master the Art of Writing an Impressive Swot Analysis Essay

Are you struggling with how to get started with your recent assignment of writing a swot analysis essay? It sure is a tough ask from students dealing with such an essay for the first time.

But you don’t have to worry as this blog post serves as a comprehensive guide to help students grasp the fundamentals of writing a SWOT analysis essay. It breaks down the intricate components, providing a step-by-step approach that simplifies understanding and implementation for learners.

As you should know. the swot analysis essay has four crucial elements, such as strengths, weaknesses, opportunities, and threats. The strengths and weaknesses pertain to internal aspects, focusing on what an entity excels at and where it lacks. Opportunities and threats, on the other hand, address external factors, exploring potential avenues for growth and the challenges that may hinder progress.

This blog post is filled with amazing guidelines from  professional paper writers . Hence, it’s an opportunity even for new students to master some tricks and tips for writing a good swot analysis essay.

Table of Contents

What is a Swot Analysis?

A SWOT analysis is a strategic tool used by organizations to evaluate their internal strengths and weaknesses alongside external opportunities and threats. It’s all about looking at the good and bad stuff inside the organization and the good and bad stuff outside of it, to get a clear picture of where things are at and where they could go in the future. This analysis is super helpful for coming up with plans, making smart choices, and using the good stuff to deal with any weaknesses or outside threats.

The importance of a SWOT analysis lies in its ability to provide a clear overview of an organization’s or project’s current state, facilitating better strategic planning and decision-making. By identifying strengths and weaknesses, an organization can leverage its advantages while addressing areas that require improvement. Furthermore, recognizing external opportunities allows for proactive steps to capitalize on them, while acknowledging threats helps in developing contingency plans to minimize their impact. Overall, conducting a swot analysis enables a more focused and informed approach toward achieving goals and maintaining competitiveness.

For students seeking assistance in crafting a swot analysis essay or assignment, relying on professional  paper writing help  can be beneficial. Expert writers can offer guidance on structuring the analysis, gathering relevant data, and ensuring a comprehensive evaluation of the subject matter. 

Why Should Students Learn to Write a Swot Analysis Essay?

Learning to write a SWOT analysis essay equips students with valuable skills applicable across various fields and industries. Understanding how to conduct a SWOT analysis develops critical thinking, analytical, and decision-making abilities. It enables students to assess an organization’s or a project’s strengths, weaknesses, opportunities, and threats, fostering a deeper comprehension of strategic planning and evaluation.

Mastering the skill of writing a SWOT analysis essay allows students to:

Develop Analytical Skills 

Analyzing internal and external factors cultivates a structured approach to problem-solving and decision-making. This skill is transferable to many scenarios beyond business settings.

Enhance Strategic Thinking

Recognizing and evaluating strengths, weaknesses, opportunities, and threats fosters strategic thinking. It encourages students to consider multiple perspectives and anticipate potential outcomes, which is vital in making informed decisions.

Improve Communication

Writing a SWOT analysis essay involves organizing thoughts and presenting information coherently. This skill enhances communication abilities, allowing students to convey complex ideas effectively.

Prepare for Real-world Applications

SWOT analysis is widely used in business, marketing, project management, and other fields. Acquiring proficiency in this area prepares students for future professional endeavors where strategic evaluation and planning are crucial.

Steps to Writing a Good Swot Analysis Essay

Here’s a step-by-step approach to learning how to write a swot analysis essay that even the experts working with the most experienced  coursework writing service  would follow. 

Step 1: Choose a Subject

Select an organization, a project, a product, or a specific situation to analyze. Clearly define the scope and objectives of your analysis.

Step 2: Identify Strengths

• List the internal factors that give the subject a competitive advantage or positive attributes.
• Consider unique resources, skills, market position, or any other advantageous aspects.

Step 3: Pinpoint Weaknesses

• Evaluate internal factors that hinder the subject’s performance or pose challenges.
• Identify areas for improvement such as lack of resources, inefficient processes, or any other internal limitations.

Step 4: Explore Opportunities

• Analyze external factors that could positively impact the subject.
• Look for emerging trends, market shifts, technological advancements, or any other external opportunities that can be leveraged.

Step 5: Assess Threats

• Identify external factors that could potentially harm the subject’s success.
• Consider competition, economic factors, regulatory changes, or any other external threats that could negatively impact the subject.

Step 6: Organize the Information

Create a structured format to present your analysis. This could be a table, a matrix, or a written narrative divided into sections for strengths, weaknesses, opportunities, and threats.

Step 7: Analyze Relationships

Explore how strengths can counteract weaknesses or how opportunities can offset threats. Highlight connections between internal and external factors.

Step 8: Provide Examples and Evidence

Support each point with specific examples, data, or anecdotes to strengthen your analysis and provide credibility to your arguments.

Step 9: Formulate Recommendations

Based on the analysis, propose strategies or actions to capitalize on strengths, address weaknesses, exploit opportunities, and mitigate threats.

Step 10: Conclusion

Summarize the key findings of your SWOT analysis and emphasize the significance of the insights obtained. Conclude with a clear takeaway or recommendation.

How Can Students Get Better at Writing a Swot Analysis Essay?

Students can enhance their skills in writing a SWOT analysis essay through several methods:

Practice Regularly

Engage in consistent practice by analyzing various subjects using the SWOT framework. This repetition hones analytical skills and strengthens the ability to identify relevant factors.

Study Examples

Review a well-written swot analysis paper example or report to understand the structure, language, and depth of analysis. Analyze how to present a swot analysis and how to conclude it well. Going through examples will also allow you to understand the swot analysis format.

Gather Comprehensive Information

Ensure a thorough understanding of the subject being analyzed. Gather data from reliable sources to support each point in the analysis, enhancing its credibility.

Seek Feedback

Share your SWOT analysis drafts with peers, instructors, or mentors. Constructive feedback helps identify areas for improvement and enhances the quality of the analysis.

Utilize Resources

Utilize academic resources, online materials, textbooks, and guidance from professionals or writing centers to grasp different approaches to conducting and presenting SWOT analyses.

Critical Thinking Development

Practice critical thinking by challenging assumptions, considering alternative perspectives, and evaluating the significance of each factor within the analysis.

Refinement through Revision

Revise and refine the analysis multiple times, focusing on clarity, coherence, and depth. Each revision contributes to a more polished and comprehensive SWOT analysis.

Apply Real-life Scenarios

Practice applying the SWOT framework to real-life situations or current events. This helps in understanding the practical applications of the analysis beyond theoretical knowledge.

Stay Updated

Keep abreast of industry trends, market changes, and relevant developments to conduct a more accurate and up-to-date SWOT analysis.

Time Management

Allocate sufficient time for each phase of the analysis, from research to drafting and revising. Effective time management ensures a more thorough and well-constructed SWOT analysis.

Final Thoughts

In this blog post, we’ve focused on a systematic approach to learn the process of crafting a compelling SWOT analysis essay for students. We wanted to make it easier for students to write a good swot analysis essay, so we broke it down into clear steps. Our goal was to give them a complete guide that covers everything they need to know. We want students to see how important it is to understand both their own strengths and weaknesses, as well as the opportunities and threats in the outside world. Our approach is all about teaching them the skills they need to make smart decisions and plan strategically.

This guide gives students a step-by-step way to write a SWOT analysis essay. First, you have to choose a topic and figure out what the strengths, weaknesses, opportunities, and threats are. Then, the guide helps you analyze and organize your info. It’s important to connect what’s happening inside and outside the topic when making recommendations. By the end, you’ll have a well-rounded and smart analysis.

For students seeking additional support and guidance in crafting their SWOT analysis essays, our  essay writing service  provides a valuable resource, enhancing their understanding and proficiency in SWOT analysis writing.

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How to Write a SWOT Analysis (Template and Examples Included)

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Planning for the Future

Where do you see yourself in five years? How about your career? Your business? 

These questions keep a staggering amount of people awake at night. All too often, the future can seem like a dark, ominous cloud that looms just out of view. As the old proverb goes, we fear the unknown—and little can possibly be more unknowable than the future.

While there is no crystal ball that can accurately predict future market trends or the steps you should take to optimize your productivity and sharpen your competitive edge, we can offer some advice: Reframe the question. Rather than trying to pinpoint where you think you might be in five years, think about where you want to be at that point in time. Once you have a destination in mind, you can start planning a route to get there. After all, maps are great tools, but they can't help you if you don't know where you're going.

So, what's the metaphorical map in this scenario? We present to you the SWOT (strengths, weaknesses, opportunities, and threats) analysis.

How to Write a SWOT Analysis

SWOT analyses are great strategic tools that are useful in project planning, business development , financial strategizing, and personal advancement . Simple, honest, and to-the-point, they facilitate a profound understanding of your or your business's current standing. Essentially, a SWOT analysis is a comparative list of all your strengths, weaknesses, opportunities, and threats.

There's more power in this process than you might think. You may be only hazily aware of your own strengths and weaknesses. However, thoughtfully recording and reflecting on them creates a thorough, conscious familiarity with both the resources available to you and the obstacles standing in your way. This awareness allows you to map out a path toward your goals with great precision and purpose. Writing a SWOT analysis will help you clearly evaluate whether your goals are feasible according to your resources and needs.

In this guide, we'll break down exactly how to write a SWOT analysis and provide a few examples along the way. Feel free to use our SWOT analysis template, given below, to write your own!

Our SWOT Analysis Template

Your list of strengths should focus on your current resources and abilities. It should relate to things that you do or that your company does well. These might be your or your company's accomplishments—both great and small—and the assets that you or your company have. Your strengths give you your greatest edge; they are the resources that propel you forward and that you can continue to develop as you progress.

When you draw up your first SWOT analysis, you may find yourself at a loss. Don't worry—it's difficult for most people to come up with an objective list of strengths and weaknesses on the spot. For your convenience, we've included a list of questions you can ask yourself to get started.

These questions should help you identify a few of your strengths. Remember, while our example questions mostly relate to business strengths, they can also apply to personal strengths. Go ahead and boast as much as you can.

• What sets your company apart from others?
• What do you have that other companies don't?
• What are you most proud of about your company?
• What makes clients come back to you?
• What does your company do well?
• What assets do you have access to?
• What qualities does your company have that other companies try to emulate?
• What has always been easy for your company? 

Listing your weaknesses might be a little more uncomfortable than detailing your strengths, but trust us—doing so will help you in the long run. Understanding the obstacles in your path and the elements of your business or skills you may need to improve is just as important as appreciating your strengths. Once you're aware of your weaknesses, you can start working on them and building your next steps around them.

Your list of weaknesses should pertain to any current problems and challenges. Check out the list of questions below—it should give you an idea of where to start. Again, if you'd rather focus on your personal or career growth, feel free to alter these questions to suit your needs.

• What makes your company blend in with its competition?
• What do other companies have that you don't?
• What are the most common criticisms that you receive from clients?
• Why have certain clients not returned to you?
• What does your company need to improve upon?
• What kind of feedback do you receive from your employees?
• What might your competition consider to be a weakness?
• What has always been difficult for your company?
• What are you unwilling to do or change?

Opportunities

Think about the opportunities available to you as potential future strengths. Your opportunities are the assets, resources, and events that could be beneficial to you in some way in the future. You may need to change some of your current approaches or adapt in other ways to capitalize on these opportunities, and that is not necessarily a bad thing.

Here are some questions you can ask yourself to identify your potential opportunities:

• What is happening in the current market that you could capitalize upon?
• What changes have you been making that have returned positive results?
• What is working for other companies?
• How could you introduce new technology to make your processes more efficient?
• What costs can you cut?
• Could you access new sectors or demographic groups?
• How can you improve or modernize your marketing techniques?
• How can you remove existing obstacles?

  Threats

Just as your opportunities are based on potential, so are your threats; these are the possible obstacles or issues that are not yet directly affecting your progress. But this doesn't mean that you shouldn't start thinking about them! Being aware of the challenges that you may encounter will help you either plan around them or confront them with solutions. Try to come up with several future events that may realistically hinder the momentum you build from engaging with your strengths and opportunities.

To get started, take a peek at our list of questions:

• What obstacles might your weaknesses create?
• Do changing market trends negatively affect your competitive edge?
• What might stand in the way of the changes you make to accommodate your strengths and opportunities?
• Do you have a lot of debt?
• Could your competition exploit your weaknesses?

How did you do? Do you feel like you've listed everything? Or do you think you're missing something? Below, we've drafted examples of a business and a personal SWOT analysis to provide you with some perspective on what a completed one might look like.

An Example of a Personal SWOT Analysis

An Example of a Business SWOT Analysis  

Final Words

The humble but effective SWOT analysis will produce a detailed map of your current environment—its hills and valleys alike. Knowing how to write a SWOT analysis will provide you with the vantage point you need to choose a direction and blaze a trail toward your goals. SWOT analyses may not be crystal balls, but they are something like compasses. Use them wisely, and you will never be lost.

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Advantages of SWOT Analysis (6 Benefits and 4 Limitations)

By Andre Wyatt on January 25, 2023 — 11 minutes to read

• SWOT Definition and Importance Part 1
• 6 Benefits and 4 Limitations of a SWOT Analysis Part 2
• Completing the SWOT Analysis Process Part 3
• SWOT Analysis Best Practices Part 4

Part 1 Definition

What is a swot analysis.

A SWOT Analysis is an evaluation tool for business leaders to assess the strengths, weaknesses, opportunities, and threats to the organization.

Typically, it is used in a strategic planning process to effectively evaluate where the company stands before moving forward with an opportunity or managing a limitation.

The SWOT Analysis tool is also used by new entrepreneurs wishing to assess the competition in their respective markets. Usually, each component of the analysis is represented in a chart format with each segment placed in a different quadrant.

Why Is a SWOT Analysis Important?

The SWOT Analysis causes business leaders to stop what they are doing and assess where the company is going. It is the hallmark of a strategic plan, and it enables leaders to sit down with all internal stakeholders to discuss the short and long-term goals of the company. Where this tool really shines is the opportunities and threats. Throughout the busy work day and meetings, it can be easy to forget to assess chances the company has to grow. Going through the SWOT process allows leaders to take the time to not lose out on any lucrative opportunities. SWOT is a large part of the strategic planning process, but many leaders are not utilizing this tool for various reasons. According to PMI, 61 percent of respondents acknowledge that their firms often struggle to bridge the gap between strategy formulation and its day-to-day implementation. Bridges Business Consultancy found that 70 percent of leaders spend less than a day a month on reviewing strategy. The SWOT Analysis tool is so simple in its creation that it can improve on these issues if appropriately implemented.

How can a SWOT analysis be used in project selection?

A SWOT analysis is a popular tool for project selection because of its ability to highlight the strengths and weaknesses of potential projects. It can be used to identify the internal and external factors associated with a specific project, such as the resources available, the market conditions, and the competition. By understanding the various risks and benefits associated with a project, organizations can make an informed decision on which projects should be prioritized. Additionally, a SWOT analysis can help organizations understand how their projects fit within their overall strategy. This process is essential for making sure that all projects are aligned with organizational goals and objectives.

Part 2 6 Benefits and 4 Limitations of a SWOT Analysis

What are the advantages and disadvantages of a swot analysis.

The SWOT Analysis has a lot of positive aspects, but no tool is perfect. Every leader should always be aware of the advantages and the limitations for planning purposes.

SWOT Analysis Advantages

Can be applied to any company and situation, one tool can tell four stories, comprehensive data integration, helps companies play offense and defense, what are the benefits of swot analysis in healthcare.

This type of analysis helps healthcare organizations to determine the best possible strategies for improving their services and operations, and can help ensure that the organization is focused on the areas that will bring about the greatest improvement and value. SWOT analysis provides healthcare organizations with an opportunity to look at the external factors that can potentially impact their success, such as changes in regulations or market trends, allowing them to adjust their strategies and operations accordingly. SWOT analysis is a powerful tool for healthcare organizations to gain insight into how they can best optimize their operations and improve patient outcomes.

What are the benefits of SWOT analysis in sport?

SWOT analysis allows teams to identify their strengths, weaknesses, opportunities, and threats in order to understand how they can work together to develop an effective strategy for success. SWOT can be used to evaluate the competition, enabling teams to come up with creative solutions to gain an advantage over their opponents. By taking the time to complete a SWOT analysis, sports teams can gain valuable insights into their performance and make informed decisions that will lead to better outcomes in the future.

What are some advantages of conducting a SWOT analysis on your company’s products or services prior to launch?

• SWOT analysis helps you identify the strengths of your product or services, such as unique features, superior quality, brand recognition, or other advantages.
• You can use a SWOT analysis to understand the weaknesses of your product or service. These may include lack of features, poor quality, lack of brand recognition, or other disadvantages.
• SWOT analysis allows you to identify opportunities for growth and expansion using external factors such as changing trends, new technology, and market changes.
• SWOT analysis also helps you identify potential threats such as competition, changes in legislation or regulations, and changes in customer preferences.

What are the benefits of using SWOT analysis in project management?

Using SWOT analysis in project management can be extremely beneficial in helping to identify potential strengths, weaknesses, opportunities and threats associated with a project. By assessing these factors, project managers are able to develop a comprehensive understanding of what is necessary for the successful completion of the project. This helps them to make informed decisions and prioritize tasks accordingly. SWOT analysis can help to identify potential risks associated with the project and create contingency plans to prepare for them. Using SWOT analysis in project management allows for better decision-making and greater preparation for the success of the project.

SWOT Analysis Limitations

Lack of prioritization, lack of clarity, the analysis is subjective, too many opinions to address, part 3 how to complete the swot analysis process.

• Decide Who Should Be Involved Leaders will want a wide range of opinions to create a SWOT Analysis, but they need to prioritize who is involved. The group should be representative of various positions, demographics, and past career experiences. However, leaders should make sure the group is not too large as it will be challenging to acknowledge everyone’s opinion.
• Designate a Facilitator The leader needs to be involved in the actual SWOT process, so someone should take the role of independent facilitator to free up the hands of the leader. It should probably be someone from the outside who is not driven by biases.
• Clarity an Objective or Comprehensive Strategy This may not be the case, but many companies may be facing an event that brought the need for a SWOT Analysis. Did a new competitor enter the market? Are revenues down, and leaders are trying to pinpoint why? Is a merger on the table? These circumstances can drive the context and conversation for the SWOT Analysis.
• Brainstorm The facilitator should have each member of the team discuss the company’s strengths. One of the best ways to do this is to have a flipchart and write down everyone’s responses there. The point here is not to evaluate each answer or take out duplicates; the goal is just to get everyone’s input down on paper.
• Remove Duplicate Ideas Once all ideas have been gathered, facilitators should then work with the team to combine similar thoughts and get rid of duplicates. After this process, the main ideas and points should be the only ones still on the flipchart.
• Clarify and Identify This is the time to answer any questions team members have about any of the listed strengths (weaknesses, opportunities, or threats). Individuals can delve deeper into the meaning behind various ideas, discuss their relevance, and ensure everyone is on the same page as to why they should be added to the list. Once this is completed, facilitators should identify three (at max five) strengths (weaknesses, opportunities, or threats) to include on the list. This step ensures teams can focus on a manageable number of subjects without getting overwhelmed.
• Summarize Thoughts and Connect It Back to Company Goals This is an excellent time to connect the SWOT process back to the event that may have sparked it and align these topics with overall company goals. This move starts the process of discussing next steps for how to move forward implementing the results from the SWOT analysis.
• Assign Next Steps Does a consultant need to be brought in to guide implementation? Do managers need to start changing their operations to better align with the SWOT analysis results? After the steps have been solidified, leaders should develop next steps to address each of the points identified for strengths, weaknesses, opportunities, and threats.

Part 4 SWOT Analysis Best Practices

Keep the competitive advantage in mind, know where to look for information, explain what a swot analysis is to the organization.

For a business to maintain productivity and stay ahead of the curve, a SWOT analysis is necessary. It forces leaders to take a look at the bigger picture, plan for the future, and determine what the company’s competitive advantage is.

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Blog Business What Is a SWOT Analysis and Its Importance to Businesses

What Is a SWOT Analysis and Its Importance to Businesses

Written by: Cristian Oana Jan 21, 2022

You’ve heard that conducting a SWOT analysis creates the foundation for your business and marketing strategy—but what exactly is a SWOT analysis and how do you do it?

Learn what SWOT analysis is, how to conduct one and how you can integrate visuals into your SWOT analysis to persuade your audience or gain buy-in from investors—all can be done by using Venngage’s SWOT Analysis Maker .

Click to jump ahead:

What does swot stand for, what is a swot analysis, why is a swot analysis important, how do you conduct a swot analysis.

SWOT stands for Strengths, Weaknesses, Opportunities and Threats — the four key aspects of your business that you must assess to pave the way for a more productive brainstorming and strategic planning session.

Generally speaking, the SWOT analysis focuses on helping you identify and analyze the internal and external factors of a company or an organization.

When you conduct a SWOT analysis, you look at the internal factors (strengths and weaknesses) and external factors (opportunities and threats), and from there you can identify your business’s competitive advantages over your competitors and start developing your business strategy.

As such, SWOT analyses are especially useful tools for marketing departments and sales organizations . They can also be powerful tools in highly changeable industries like healthcare .

A SWOT analysis is often in the form of a quadrant or matrix, like this SWOT matrix:

Let’s take a look at what constitutes each internal and external factor of the SWOT framework.

Identify your business’s strengths

Strengths are the internal factors and resources that support a successful outcome for an organization. These are the things that you are particularly excellent at or the things that set your business apart from its competitors.

A strength brings you competitive advantages over your competitors. If all your competitors offer high-quality products, then manufacturing high-quality products is not a strength in your market. Rather, it is deemed as a necessity.

Point out your weaknesses

Weaknesses are inherent in an organization, too. Focus on your people, resources, systems and procedures, and determine which of these need improvement or must be avoided. 

A business’s weakness can come in the form of its workforce like in this SWOT analysis example:

Regularly assess your employees’ work performance using this template to enhance company productivity.

Don’t be afraid to acknowledge your weaknesses. Instead, embrace and address them. Be realistic now instead of ignoring the unpleasant truths.

Spot opportunities

Opportunities are typically born out of external situations. They are windows of possibilities, of something promising to happen. But you must be able to spot and exploit them. Do just that and you bring up your organization’s chances of trouncing the competition and, hopefully, of leading the market.

These opportunities don’t have to be big right away. Remember, every positive opportunity counts, even the small ones. What’s important is that you can grab them and take advantage of them immediately.

Use this SWOT analysis template to assist your brainstorming session. Make sure you have taken advantage of all the presented opportunities for your business.

Anticipate the threats

Threats are the total opposite of opportunities. These are factors based on your company’s external environment that could negatively impact your business.

While opportunities could allow a company to thrive, threats could stunt your company’s growth and generally jeopardize your company’s success.

External threats may include changes in the market requirements, shortage of new employees, and supply chain problems. It is vital to take action against these before these could adversely affect your company. 

For more examples of SWOT analysis templates, read on or check our blog posts: 20+ SWOT Analysis Templates, Examples & Best Practices

Return to Table of Contents

It’s a tool for strategic planning

As previously established, SWOT analyses are an effective tool for planning, brainstorming and even decision-making.

The tool works more effectively if you conduct it while bearing a specific question or objective in mind such as taking advantage of a new business opportunity, responding to new trends, implementing new technology, or dealing with a competitor’s change in operations.

The SWOT analysis example below points out the opportunities presented to a grocery delivery company. Based on this analysis, you’d recognize that the strategy in the short term should focus on attracting a larger audience by optimizing the mobile app and improving the website’s SEO.

SWOT analysis leads to a competitive advantage

Since SWOT analysis helps an organization determine the areas that perform well, the areas they pinpoint are considered to be the fundamental success factors that will give your business the competitive advantage that it deserves.

SWOT also requires you to analyze your competitors to understand where you stand on the market, thus being able to point out your competitive advantages over others.

If you’re interested in learning more about competitor analysis , check out this post: How to Create a Competitor Analysis Report (Templates Included)

This SWOT analysis template can be used to generate a diagram where you can examine the aspects of your organization that can be used more to your advantage.

It can also help you deal with your weaknesses

To help you put your organization in a better spot, conduct a SWOT analysis to identify your weaknesses so you can cut down or improve them even before they develop into a problem. As said before, be realistic in identifying your weaknesses to adequately deal with them.

SWOT analysis can ward off threats

The steps your competitors take may also be a threat to your business. Make sure you anticipate them and proactively ward off their marketing campaigns with this SWOT analysis template.

External factors such as a new government policy or your competitor’s new advertising campaign can be seen as threats to your business. Identify the threats looming around your business through a SWOT analysis. You may also find ways to ward them off depending on the strengths and weaknesses that you listed in your analysis.

Achieve your organization’s goals and objectives with the use of the information you have gathered from your SWOT analysis. Use the following steps to begin your journey.

Step 1. Establish your objective

From the beginning, you have to have a clear objective or a question in mind so you can get the most out of your SWOT analysis. For example, you may use the information you gathered to decide whether or not to push through with the launch of a new product or service to the market.

Here’s an example of a SWOT analysis conducted to examine the possibility of scaling for an apparel design business:

Step 2. Conduct research

Understand your business and the industry and market it belongs to before you begin the SWOT analysis. Brainstorm with your team, business partners, investors, and clients to get a diverse range of perspectives. Don’t forget to take your competitors into account so find time to research about them, too!

Step 3. Make a list of your business’s strengths and weaknesses.

Identify and list down your business’s strengths and weaknesses respectively. Your strengths may include those that relate to your workforce, financial resources, competitiveness, and your business location while your weaknesses may include your lack of innovative products and employee absenteeism.

Your goal should be to look back on your SWOT analysis and find that your weaknesses have already been resolved. Despite the emergence of new weaknesses over time, the fact that you have already addressed the old ones is a good indicator of your business’s growth.

Take note that your list does not need to be definitive during this part as you will still be organizing them at the fifth step.

Add what you have in your list to this SWOT analysis template:

Remember, you can always add icons or illustrations to the template to make it your own:

Or even apply your brand colors to it, using My Brand Kit :

Step 4. Make a list of your business’s potential opportunities and perceived threats.

Businesses must not fail to recognize the windows of opportunities presented to them, as well as looming threats lingering around it.

List down all possible external opportunities and threats for your business. Your opportunities may include innovative technologies, potential investors and partnerships, training programs, and a diversified marketplace while your threats may include unemployment growth, emergence of competitors, and the uncertainty of global markets.

Note that the same item could not be listed down as both an opportunity and a threat.

Add your opportunities and threats to your SWOT analysis design. If you don’t like the template above, here’s another one:

Step 5. Determine the hierarchy of priorities.

After completing the steps above, you will have four different lists—one each for strengths, weaknesses, opportunities, and threats. This is where you work out the hierarchy of importance among the issues, which are the most important ones and which can be dealt with at a later time.

Step 6. Come up with strategies addressing the problems found.

Review your prioritized list by asking how your strengths and weaknesses can take advantage of the opportunities listed and counteract the threats listed respectively. Also consider the things you would need to get control of your weaknesses to take advantage of the opportunities as well as the ways to minimize your weaknesses to push through your identified threats.

After answering those, you may begin developing your strategies to achieve your business goals and objectives.

Conducting a SWOT analysis doesn’t have to be daunting

Start brainstorming, researching and developing strategies for your business with the help of SWOT analyses. You can always customize our SWOT analysis template and add it to your report , presentation or infographic to share with colleagues or investors (and guess what, we have templates for those too!)

Start creating your own SWOT analysis for free using Venngage’s SWOT Analysis Maker —no design experience required.

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• CIO strategy

SWOT analysis (strengths, weaknesses, opportunities and threats analysis)

• Stephen J. Bigelow, Senior Technology Editor
• Mary K. Pratt
• Linda Tucci, Industry Editor -- CIO/IT Strategy

What is a SWOT analysis?

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.

When and why should you do a SWOT analysis?

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.

Elements of a SWOT analysis

As its name states, a SWOT analysis examines four elements:

• Internal attributes and resources that support a successful outcome, such as a diverse product line, loyal customers or strong customer service.
• Internal factors and resources that make success more difficult to attain, such as a weak brand, excessive debt or inadequate staffing or training.
• External factors that the organization can capitalize on or take advantage of, such as favorable export tariffs, tax incentives or new enabling technologies.
• External factors that could jeopardize the entity's success, such as increasing competition, weakening demand or an uncertain supply chain.

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.

How to do a SWOT analysis

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.

Example of a SWOT analysis

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:

• Strengths: good communication skills, on time for shifts, handles customers well, gets along well with all departments, physical strength, good availability.
• Weaknesses: takes long smoke breaks, has low technical skill, very prone to spending time chatting.
• Opportunities: storefront worker, greeting customers and assisting them to find products, helping keep customers satisfied, assisting customers post-purchase and ensuring buying confidence, stocking shelves.
• Threats: occasionally missing time during peak business due to breaks, sometimes too much time spent per customer post-sale, too much time in interdepartmental chat.

How to use a SWOT analysis

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:

• the creation and development of business products or services;
• making hiring, promotion or other human resources decisions;
• evaluating and improving customer service opportunities and performance;
• setting business strategies to improve competitiveness or improve business performance; and
• making investments in technologies, geographical locations or markets.

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.

SWOT analysis pros and cons

Among the advantages of using a SWOT approach are the following:

• The analysis creates a visual representation of the factors that are most likely to impact whether the business, project, initiative or individual can successfully achieve an objective.
• By involving experienced cross-discipline team members, a SWOT analysis can encourage many different perspectives and approaches.
• Such diversity can allow a SWOT analysis to flesh out each element and expose creative ideas and overlooked problems that might otherwise go unnoticed.

Although a SWOT snapshot is important for understanding the many dynamics that affect success, the analysis does have limits, such as the following:

• The analysis may not include all relevant factors because some strengths, weaknesses, opportunities and threats can easily be overlooked or misunderstood.
• The input for each element can often be empirical or subjective and give a skewed perspective.
• Because it only captures factors at a particular point in time and doesn't allow for how those factors could change over time, the insight SWOT offers can have a limited shelf life.

Learn how to assess an organization's needs and implement a technology strategy in this step-by-step guide.

Continue Reading About SWOT analysis (strengths, weaknesses, opportunities and threats analysis)

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What Is A SWOT Analysis? A Thorough Explanation With Examples

Know the strengths and weaknesses of your organization, internally and externally.

Table of Contents

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.

ClearPoint Strategy is here to help you navigate this essential process with ease. Our software provides the tools and framework necessary to execute a successful SWOT analysis, ensuring your strategic plan is robust and actionable.

See ClearPoint Strategy in action! Click here to watch a quick DEMO on the software

What is a swot analysis.

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:

• Strengths and weaknesses are internal factors (things you can control), like team members, software, and geographic location.
• Opportunities and threats represent external factors (things you can’t control), such as competitors, regulations, and economic trends.

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.

Claim your FREE eBook on 8 effective strategic planning templates here

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.

TIP: Before you start, get organized

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:

• You can maintain forward momentum by creating deadlines for each component, assigning responsible “owners” to tasks, and tracking milestones and overall progress.
• You can simplify the information-gathering portion of SWOT by sending automated messages to relevant team members on when and how to input information.
• You can facilitate collaboration among all parts of the organization by providing everyone access to a single tool that handles data collection.
• You can encourage participation and increase engagement by making the SWOT analysis visible to as many or as few people as you like.
• You can see how your SWOT connects to various parts of your strategy by linking elements to high-level objectives, other projects, measures, etc.—anything that adds context to the analysis.

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.

Now, let’s dig into the steps of the analysis process.

1. Create a SWOT matrix

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.

Try ClearPoint's AI Assistant for SWOT analysis for FREE here

2. gather the right participants.

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:

• Financial strengths: What is our most reliable source of financial growth? Is it our service destinations? A large fleet size? Our customer loyalty program?
• Customer strengths: Where is our customer growth coming from? Is it due to excellent service ratings or low prices? Why are customers choosing us over our competitors?
• Internal strengths: What do we do very well as an organization? Are our operations easily scalable? Do we have an exceptionally high employee retention rate? How complex is our maintenance program?
• Learning & growth strengths: Where do we excel as far as our employees are concerned? Is it our compensation model? Could it be our workforce development program? Are people coming or leaving because of our culture?

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.

Watch our video to learn about ClearPoint Strategy's proven Success Framework

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:

• Financial weaknesses: What is our biggest financial weakness? Our destinations are all in the U.S., which may be limiting our growth. Or, we know that a large number of new competitors entering the market are decreasing our market share. Do we have challenges with debt or credit?
• Customer weaknesses: Where do our customers think we need to improve? This could be related to frequently canceled flights, lost baggage, complexity of the reservation process, or cleanliness, for instance.
• Internal weaknesses: What do we do poorly? Are we slow at handling customer complaints? Are our maintenance costs above industry average? What about plane utilization?
• Learning & growth weaknesses: What are our biggest challenges with employees? Is our staff security training proving ineffective, or is there a negative perception of the organizational culture? Do our employee surveys reveal low engagement?

5. Identify your opportunities

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:

• Financial opportunities: What is our biggest opportunity to improve our finances? This might mean taking advantage of federal loans in a time of crisis (like COVID-19) or adopting specific technology to lower costs. Maybe there is an opportunity to purchase a weaker competitor.
• Customer opportunities: Where could we dramatically improve with our customers? Could we enhance our online interface? Can we create and promote new standards of cleanliness? What about finding new ways to engage with customers when travel opportunities are low?
• Internal opportunities: What processes will drive us well into the future if we could improve upon them? Adopting certain climate initiatives to reduce our carbon footprint, for instance, will make us more eco-friendly (and, by extension, more appealing to customers). Maybe now is the time to upgrade a reservation or pricing system.
• Learning & growth opportunities: What opportunities do we have to leverage staff? For example, do we have cross-training opportunities? Could we make a few tweaks to improve our culture and thus our retention?

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:

• Financial threats: What threats could seriously impact our financial health? This could be low-cost competitors, ongoing global health issues that prevent travel, or rising oil costs.
• Customer threats: What is our biggest concern about our customers? Has a competitor created a more attractive loyalty program? Is our number of business clients trending downward?
• Internal threats: What current areas of our business might harm us later? Is a contract dispute imminent that could disrupt business? Is a potential merger or acquisition on the horizon?
• Learning & growth threats: What threatens the people within your organization? This could be anything from instability in our customer support department to staff member departures to a department-specific pushback against new technology.

The external threats deemed most imminent for Upward Airlines might be:

7. Examine your matrix for connections

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.

What Should You Do with Your SWOT Analysis?

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:

• High maintenance costs
• Fewer direct travel routes than our competitors
• No uniform project management system in place
• Below-average employee satisfaction

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:

• An objective might be to “improve employee satisfaction”; to accomplish that goal, the company might initiate new projects that include reevaluating the benefits plan or starting a surveying program for employee feedback.
• An objective might be to “make flying as safe as possible for customers”; to reach that goal, they might implement a new cleaning regimen and increase communication with customers about new procedures.
• An objective might be to increase revenue by 10%; to help achieve that goal they might create a problem-solving team whose purpose is to reevaluate the current capacity strategy and recommend changes to offset the rising cost of fuel.

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.

Seize New Opportunities

"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

Evaluate Your Competitive Advantage

"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 ‍

Learn Business Strengths

"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

Address Future Business Challenges

"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 ‍

Shore up Weaknesses

"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

See Different Perspectives

"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:

• Encourage open and honest conversation. Create an environment that encourages candidness. That might mean using sticky notes to gather anonymous feedback, rather than having people raise their hand to state a company weakness out loud.
• Promote collaboration. Have everyone write all their ideas on sticky notes, put them on a board, and then walk through them as a group. Combining similar ideas might help people to think of more. You might also consider breaking up a large group into smaller groups of three or four employees to encourage the sharing of ideas.
• Vote to narrow down ideas. The group will generate lots of ideas. You want to take them all into consideration, but you don’t need to keep every idea; this should be a fairly high-level exercise. Rank the top 10 and list those to focus on. And remember—the SWOT isn’t intended to project 10 years down the road; it should look at where you are now and in the very near future.
• To identify external factors, look at the competition. In addition to a PEST analysis, another way to identify external threats and opportunities is to look at your competitors. What opportunities are they currently after, and can you use that to your advantage? What threats are they currently facing, and how does that apply to you?
• Be specific when describing internal factors. For example, “brand image” can be both a strength and a weakness, depending on how you word it. Be specific in your descriptions; ultimately, that specificity will also help you define the right measures and benchmark your performance over time.
• Keep emotion out of the room. This exercise should be objective, not subjective. If a statement can’t be backed up with facts, it doesn’t count.
• Try to make your resulting strategy “weatherproof.” Current threats may include the possibility of more political and economic turmoil, but these kinds of obstacles tend to be much more complicated than those you’d see in most SWOT analyses. While it may be difficult to address them fully, try to develop a strategy that will bolster your organization during hard times. For example, a retail store might consider creating an objective to ensure its online and in-person stores perform equally well should either avenue be cut off due to external circumstances.

Download Our Strategic Planning Tools—Including our SWOT Analysis Template

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.

‍ Read more about strategy execution and how you can use ClearPoint for tracking here. ‍

Ready to take action? tart planning for the future now!

Optimize Your Strategic Planning with ClearPoint Strategy Software

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.

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What are the 4 dimensions of swot analysis.

The four dimensions areL strengths, weaknesses, opportunities, and threats.

When and where should you develop a SWOT analysis?

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.

How do you use your SWOT analysis?

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.

Why should I conduct a SWOT analysis?

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.

What's the difference between a SWOT and PESTEL analysis?

A SWOT analysis is conducted to assess internal factors that affect your business. A PESTEL analysis focuses solely on external factors .

What are the benefits of using SWOT analysis?

The benefits of using SWOT analysis include:

- Identifying Strengths: Helps identify and leverage the organization's internal strengths. - Recognizing Weaknesses: Highlights areas for improvement within the organization. - Spotting Opportunities: Uncovers external opportunities that the organization can exploit for growth. - Understanding Threats: Identifies external threats that could impact the organization’s success. - Strategic Planning: Provides a foundation for developing strategic plans and making informed decisions.

How can SWOT analysis help your business?

SWOT analysis can help your business by:

- Strategic Decision Making: Informs strategic decisions by providing a comprehensive view of the internal and external factors affecting the business. - Resource Allocation: Helps prioritize resource allocation based on identified strengths and opportunities. - Risk Management: Enables proactive management of potential threats and weaknesses. - Competitive Advantage: Identifies unique strengths that can be leveraged to gain a competitive edge. - Goal Setting: Aids in setting realistic goals and objectives based on a clear understanding of the business environment.

What are some common mistakes to avoid when conducting a SWOT analysis?

Common mistakes to avoid when conducting a SWOT analysis include:

- Lack of Specificity: Being too vague or general in identifying strengths, weaknesses, opportunities, and threats. - Ignoring External Factors: Focusing too much on internal factors and neglecting external influences. - Overlooking Data: Not using data and evidence to support the analysis, leading to biased or incomplete results. - Failure to Act: Conducting the analysis but not using the insights to inform strategic decisions and actions. - Infrequent Reviews: Not updating the SWOT analysis regularly to reflect changes in the internal and external environment.

How often should you conduct a SWOT analysis?

You should conduct a SWOT analysis:

- Annually: At least once a year as part of the strategic planning process. - During Major Changes: Whenever there are significant changes in the market, industry, or within the organization. - Before Strategic Initiatives: Prior to launching new products, entering new markets, or making major business decisions. - Periodically: Regularly reviewing and updating the SWOT analysis ensures it remains relevant and accurate.

What are some tips for getting the most out of a SWOT analysis?

Tips for getting the most out of a SWOT analysis include:

- Involve Key Stakeholders: Engage a diverse group of stakeholders to gain comprehensive insights and perspectives. - Use Data: Base the analysis on accurate and up-to-date data to ensure reliability. - Be Specific: Clearly define each strength, weakness, opportunity, and threat to avoid ambiguity. - Prioritize Factors: Focus on the most critical factors that will have the greatest impact on the business. - Develop Action Plans: Translate insights from the SWOT analysis into actionable strategies and plans. - Review Regularly: Regularly revisit and update the SWOT analysis to keep it relevant and useful.

Ted Jackson

Ted is a Founder and Managing Partner of ClearPoint Strategy and leads the sales and marketing teams.

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This Is Why SWOT Analysis Is More Important Than You Think

SWOT analysis is a “identify and plan” type of study. It applies to all industries, markets, and people. But why is it more important than you think?

Have you ever wanted to know your true strength? Maybe you’re tired of watching opportunities slip by — but don’t know how to grab them. Everyone has struggled with these issues at some point.

Any job interviewer is likely to ask you, “what are your biggest strengths and weaknesses?” It feels like a trap. Be too braggy and the interviewer might hate you. Say the wrong weakness and watch this opportunity fly away. The experience doesn’t have to be so polarizing.

Strengths, weaknesses, opportunities, and threats. This is what SWOT stands for . It’s an acronym. Anyone who uses SWOT analysis is trying to pinpoint these four categories in relation to their topic. It’s short. Direct. Straight to the point and focuses on things you can change if you’re not satisfied.

The essence of SWOT analysis

Albert Humphrey is the creator of a SWOT analysis. He set out to find out why corporate planning failed during the 1960s and 1970s. Although SWOT analysis is born in the world of business — where it continues to be a necessary tool for business owners and analysts alike — its use doesn’t end there.

If you think about it, SWOT is generic. Not a bad thing. It means it’s applicable to areas outside of the corporate landscape. You could use it to decide whether to buy a dog or not. It might go a little something like this:

• What are the strengths a dog offers?
• What are the weaknesses in getting a dog (in my current living arrangement)?
• Are there current opportunities to get a dog?
• If I do get one, could it be a threat (to living situation/housemates/other animals in the vicinity?)

The beauty of the above example is this could be your entire SWOT analysis (pending answers) or it could just be the introduction. If you don’t want to dive deeper — or you’ve already got all the answers you need — stopping here is fine. But maybe this is just the tip of the iceberg.

It may sound silly to use SWOT for such a mundane topic, but that’s what SWOT is capable of. You can up the complexity, change the setting or topic, and it’s still viable for use.

That might not be what Mr. Humphrey was aiming for with his discovery and usage of SWOT analysis. However, many people have had a positive experience with his analysis so maybe, that makes it okay.

What makes SWOT analysis important to you

We’ve clarified how SWOT analysis is what you make it. You can keep it simple or transform it into a 10-page extended essay. It’s your choice. But the true importance stems from your ability to do so something immediately with your findings.

Hundreds, even thousands, of analysis techniques exist. Each one has a purpose. It helps identify a problem and, sometimes, shows you how to fix it. SWOT leans more towards identifying the problem with solving coming later.

Once it’s done, you’ll have everything needed to start planning change. But think of it more this way.

Strengths : The good things. It’s the stuff that helps. It differentiates you from others. Likely, you’ll want to keep these strengths. Like if you’re a fantastic public speaker who can get a room laughing in seconds. You may start thinking about how you can use this strength in other aspects of your life, especially if everyone else around you hates talking in front of others.

Strengths might also be static. In the case of considering to buy a dog, one strength could be that the dog helps with your daughter’s depression. It’s a fact that animals can improve mental health. It’s a strength, but not necessarily one you can enforce into other aspects of life.

Weaknesses: The bad. The stuff you want gone or transformed into a strength (if possible). Perhaps your biggest weakness is your need to control every situation. You create plans. If they don’t go exactly as they should, it really throws you off.

This is a major weakness if you work in a hectic environment where every day is different. You might try to work on this weakness. Or you might realize this career path isn’t for you anymore. No one wants a weakness, but identifying them can provide thorough detail.

Opportunities: Compared to the rest of the analysis, opportunities are less likely to be influenced. In the case of SWOT, you’re looking to identify opportunities, then take advantage of them. You can also create opportunities (if possible). It’s not necessary to create though. Focus on finding and learning how to use it to your advantage.

Threats: Ever had something suddenly not go your way? The wedding cake arrive in shambles, turning the happy bride into a puddle of sorrow? Or a new business arrives in town, acting friendly at first until they start a campaign to reign in your customers? The people who delivered the cake are the threats in the first situation. The new business is the threat in the second. Threats may sound scary (and they can be!) but they’re also just a part of life. You don’t have to let them sneak up on you and ruin moments or businesses. Just being aware of something that could undermine your progress or event allows you to start thinking. What will the impact be? Can you withstand it? Is there anything you can do now to prevent the threat from affecting you?

SWOT analysis is a “identify and plan” type of study. It applies to all industries, markets, and people. Anyone can use it and uncover helpful information. That’s why SWOT analysis is more important to use than you may ever have thought.

What are the Four Parts of A SWOT Analysis?

SearchGPT in OpenAI SWOT Analysis

Swot analysis of artificial intelligence.

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Why You Need a SWOT Analysis for Your Business

A SWOT analysis helps you make smart, informed business decisions.

Table of Contents

Understanding your company’s position within your market or industry and knowing how and where you can grow is critical for any business owner. The knowledge allows you to develop your company strategically rather than wasting your efforts trying to expand into a market that doesn’t align with your business or being steamrolled by a surprise competitor. This is why it is helpful to perform a strengths, weaknesses, opportunities and threats (SWOT) analysis to assess where you are now and how you can improve. 

What is a SWOT analysis?

A SWOT analysis is a type of analysis that helps you develop your business strategy by comparing internal factors (strengths and weaknesses) against external factors (opportunities and threats). Examples of internal factors include things that you have control over and can change, such as your staff or your intellectual property. External factors are things that you cannot control, such as consumer trends or competitors.

A SWOT analysis has four quadrants:

The analysis provides you with an accurate picture of what your business is currently doing well and how it can improve.

“[A SWOT analysis] gives you a firm grasp of what is affecting your business internally and externally,” said Lynne Pratt, creative content expert. “By carefully evaluating the analysis, a business can find new ways of progressing and achieving growth .”

Why should you do a SWOT analysis?

Every company, no matter its size, should do a SWOT analysis periodically. It is a crucial strategic tool that will reveal problems that need to be fixed, strengths that need to be capitalized on, potential threats that need to be mitigated and opportunities for growth.

Unbiased, big-picture look at the company

Sometimes, it’s hard to see the big picture when you are involved in the day-to-day operations of a company. A SWOT analysis gives you a detailed, unbiased overview of your business as a whole or a specific product or campaign. By involving a variety of stakeholders, you get a perspective that you might not have gotten as an individual or small group of executives. 

Help with overall company direction or project feasibility

It can also help train your brain to consider every factor that could affect your project or business. When you’re facing a tough issue or if you’re just unsure of your current strategy, a SWOT analysis illuminates details so you can formulate actionable plans based on each of the four quadrants.

For example, if you were considering opening a new location for your business, you could run a SWOT analysis to see if you are in a good position to do so. You could also use it to identify outside factors that you will need to plan for.

Preparation for the future

The threats portions, in particular, can help you see and overcome any possible problems, either competitive or market-based, so that you can prepare a proactive initiative. For example, if you find out that a competitor has improved its technology, you can work on similarly upgrading your own. In the early stages of the pandemic, restaurants that did a SWOT analysis could identify the threat of fewer customers opting to dine in and change their strategy to focus on takeout and delivery sooner. 

“A SWOT analysis is useful so that you don’t get caught entirely off-guard,” said David LaVine, founder of RocLogic Marketing. “You [should] do a SWOT analysis for each application area you’re considering operating in.”

“We conduct [analyses] every six months as a rule in our business,” said Alistair Dodds, marketing director and co-founder of Ever Increasing Circles. “They act as a great check on how the competition has evolved in that time period.” [Discover seven effective ways to differentiate your product .] 

Marketing and sales focus

Although many of your company’s strengths should be known, you may discover one you hadn’t considered before or even something that might be new. Perhaps you have reached some threshold in revenue, sales, five-star reviews or customers that you can now use in your sales and marketing efforts. For example, a customer threshold might result in a marketing campaign with a headline of, “1 million customers have trusted Company X. Won’t you?”

Who should conduct a SWOT analysis?

A SWOT analysis should be a collaborative effort between several levels of employment within your company. Founders and leaders should be the most closely involved but, to gain a true picture of your business, gather input from a group of people that can contribute several perspectives.

“It’s vital to go through your analysis with key stakeholders,” said Dodds. “When you identify weaknesses, it’s a great time to get other department heads and staff to suggest solutions — you’ll be amazed at the creativity and problem-solving inherent in your team if they are given the opportunity [for] input.” 

If you’re a solo operation, ask close friends or related professionals, such as your accountant, lawyer or advisor, for input. Having plenty of outside perspectives helps make your analysis as well-rounded and objective as possible. 

How to do a SWOT analysis

The first step of a SWOT analysis is to create your grid. Start with strengths in the upper left corner, then weaknesses in the upper right corner, opportunities in the bottom left and threats at the bottom right of the grid.

Next, fill in each quadrant. An easy way to do this is to ask yourself questions that apply to each box. Here are some suggestions.

• What do you do well?
• What unique skills or services do you have?
• What experiences do you have that can help you achieve your goal?
• What expertise, knowledge or other intellectual property do you have?
• What do you do better than your competitors?
• Where are you most profitable? Why?
• What aspects of your business could hinder your progress?
• What skills or resources are you lacking?
• What is costing you money?
• Is there anything you feel like you’re failing at?

Opportunities

• What can you improve?
• What external conditions can help you achieve your business goals? [Related article: Tips for Setting Better Business Goals ]
• Are there new audiences you could potentially reach?
• Is there technology you could use to enhance your business?
• Can you do more for your existing customers?
• Where or how could you expand your business?
• What external conditions could damage your progress or performance?
• What do your competitors do well?
• What are your competitors doing that you are not?
• What is going on in your industry?
• What is happening (or could happen) in the economy that could harm your business?
• Are there new competitors in your market?
• Is your target audience shrinking?

Here are some additional points to consider as you fill in your quadrants:

Your quadrants do not have to be perfect — you can always create multiple drafts of your analysis, editing what you have filled in as you go. Host a brainstorming meeting to complete your first draft.

After you have filled in the quadrants, review each quadrant and evaluate your results.

In preparation for these conversations, review some of the most important terms for business owners to enhance your ability to assess each area of the SWOT analysis and brainstorm solutions.

How to evaluate your results

Once you complete your SWOT grid, you need to analyze the information you’ve collected. Here are a few things to consider.

Capitalize on your strengths

To evaluate your SWOT analysis effectively, start with your strengths and don’t brush them off, said Pratt. “You might feel that because you’ve got these nailed down that you don’t need to do anything with them, but this is wrong,” she said. “There is always room for improvement and working on your strengths, as well as [with] the [other quadrants], will help them remain your strengths”:

• Rank your strengths from strongest to weakest.
• Focus on using your strongest points to drive marketing and sales.
• Bolster your weaker strengths by implementing improvements.

Address your weaknesses

Next, look at your weaknesses and identify which aspects of your business each weakness is related to. For example, do you need to boost customer retention by better training your staff? Or is location and/or competition the problem? “Identify where the problem is coming from so you can begin to plan to address it,” said Pratt.

• Identify the sources of each weakness.
• Change of policy
• Improve company culture and leadership
• Increase investment
• Hire/fire employees
• Improve marketing or sales messages
• Secure business capital from investment or lender
• Change your suppliers or renegotiate terms with them

Pivot to defeat threats

You can also see which of your threats are related to your weaknesses and if any of them are caused by something you can change. Try to connect your strengths to ways you can combat threats:

• Competitors are gaining market share : Determine why this is happening. Do they have a more compelling message, a lower price or better product? Then, take steps to combat whatever issue is occurring. [Related article: Ahead of the Pack: 8 Ways to Keep Your Business Competitive ]
• Competitors are bigger or have more money : Look to find additional funding to grow your company or position your small business as a place that provides better quality or customer service. You can also invest in clever guerilla marketing to attract attention.
• Economy is getting worse : Find ways to lower your prices, introduce a lower-priced version of your current product or shift marketing to higher-income customers.
• Product is becoming obsolete : Improve or change your product to fulfill customers’ changing needs.
• Material cost is increasing : Look for new suppliers or new materials and raise prices if necessary.
• New government regulations : Assess any additional costs and possibly raise prices, change processes or pressure suppliers to comply.

Take advantage of opportunities

Finally, consider whether there are time constraints that could impact your opportunities. Are any of them short-term or seasonal? If so, make it a priority to hit those opportunities first and create an action plan for taking advantage of them.

Nathan Thompson, e-commerce and growth lead at The Others Beauty Co., said his company splits their business opportunities into short-, mid- and long-term goals. They set deadlines for each goal to ensure it gets done. “SWOT results should be analyzed and evaluated in order of actionability,” he said. “Having deadlines set for each milestone ensures accountability for all parties.”

• Organize opportunities by timeliness and budget.
• Identify the opportunities that will have the biggest positive impact on the company.
• Use this criterion to decide where to focus your resources first.

A sample of SWOT in action

To see how SWOT analysis works, consider this example:

Soft-Touch makes pads that attach by Velcro to the plastic face mask worn by sleep apnea sufferers to help them breathe while they sleep. The company founder herself has sleep apnea and she developed the product to increase the comfort of wearing the mask and to eliminate the marks it left on her face the following morning.

The company has largely grown its sales through word-of-mouth. A major sleep apnea equipment maker wants Soft-Touch to supply the pads for all of its masks. To satisfy the increased demand, Soft-Touch would have to outsource its manufacturing.

Here is a sample SWOT analysis for Soft-Touch as they consider this opportunity: 

Notice that the SWOT analysis doesn’t provide an answer. Instead, it provides a framework to help formulate an answer and allows you to see exactly what the opportunities are (an expanded market share and increased revenue), what weaknesses currently limit the company (lack of funding and marketing expertise, limited manufacturing capacity), its current strengths (unique proposition and trusted brand) and the threats it could face if it takes the opportunity (less control and need for financing).

“Taking time to think strategically will lead to ways you can streamline to get more done as well as take your business into new directions that can benefit (or even save) the company,” said Joshua Ladick, president and founder of GSA Focus.

Remember that your SWOT analysis is only a starting point, not an actionable plan. “Don’t confuse SWOT for strategy,” said Greg Githens, executive and leadership coach at Catalyst & Cadre. You are still responsible for developing a strategy that will take you from where you are to where you want to be, and SWOT provides a roadmap for that strategy.

​​Jennifer Dublino and Sean Peek contributed to this article. Source interviews were conducted for a previous version of this article.

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Management & Operations

• 30 Dec 2019

What Can a SWOT Analysis Tell You About Your Business?

Preetam Kaushik

As a business owner, your success can often depend on how well you understand your company.

Internally, for instance, you have to be aware of the strengths and the weaknesses of your organisation – as well as how to improve both. Externally, meanwhile, you need to be able to identify any potential opportunities – as well as threats – on the horizon.

Of course, keeping constant tabs on all these simultaneous factors is near impossible, even for larger organisations. Just within the day-to-day operations of the company, there are too many things that will require your attention.

This is why a Strengths-Weaknesses-Opportunities-Threats analysis – better known as a SWOT analysis – is an essential tool in the arsenal of a business owner.

To illustrate why, we've produced a breakdown of what exactly this process can tell you, as well as the potential impact it can have on your company. So, if you've never conducted one before, now is the time : this is the importance of SWOT analysis in business.

The Importance of SWOT Analysis

Due to its relative simplicity, SWOT analysis is a very accessible tool with far fewer disadvantages than advantages. It offers unparalleled value through critical insights into both your organisation and the market. Primarily, though, its importance to your business can be gleaned from these two fundamental points:

It Contributes to Business Growth and Increased Profits

By allowing you to identify new opportunities in the market, SWOT analysis provides you with alternative pathways for business expansion. Information about core strengths can be used to improve the overall efficiency of your organisation further, leading to increased revenue. 

The identification of weaknesses can also be leveraged for better financial performance. Losses can be cut down by reducing operating costs if they are too high, while productivity can be improved by upgrading your machinery, IT infrastructure, and other similar assets.

It is Essential for Effective Strategic Planning and Risk Mitigation

The success of your plans – both short-term and long-term – hinges on how much you know about your business and its market. Without a SWOT analysis, you do not have the complete picture of the current state of your organisation, or the environment it exists in.

Gaps in information lead to uncertainty, which elevates the level of risk surrounding your organisation; therefore, strategic plans made in these circumstances have a high chance of failure. The insights gained from a SWOT analysis allows you to minimise this risk .

What Can SWOT Analysis Tell You About Your Business?

As touched upon already, SWOT is a basic analysis tool used by business administrators and managers to gain valuable insights into their departments or enterprises. It can be used to scrutinise the primary attributes of any business entity. 

Indeed, larger corporations usually bring in external consultants and experts to provide this analysis. Most big enterprises conduct such reviews periodically, in order to learn how to improve their organisation internally, as well as within the wider market.

In smaller organisations, however, where purse strings are tighter, you can carry out an analysis internally, with inputs from all the stakeholders in the business. This can include management, employees, accountants, legal advisors, suppliers, and even your clients. 

These insights can have a significant effect on how you move forward with your business, and can generally be divided into four different categories:

By analysing your company's strengths – be they a strong brand, a unique product or an effective production process – you can determine which course of action might be the most effective in the long run. For example, one option might be to try and improve on them further, such as focussing on the skills of your employees through advanced training. Alternatively, you might want to try extracting more value from your strengths, such as reinvesting idle cash reserves, or leasing out (or licensing) your intellectual properties.

In a SWOT analysis, this is often the most critical category. Some of the issues discovered here will require your urgent attention, and neglecting them could lead to serious problems in your organisation in the long term. These are the aspects of your company that hold it back from achieving its full potential, restricting growth in the process and giving an edge to your competition. For instance, a lack of modern IT infrastructure is often a weakness for many small businesses.

Opportunities

Some of the most successful corporations in the world today exist because their founders were able to identify and exploit new opportunities in the market. By assessing market conditions, you can also open up new avenues, such as the demise of a competing brand, or even the possibility of takeovers and mergers to increase your reach. 

Indeed, given the expansion possibilities presented by such opportunities, analysing the business world around you can be critical – especially for small businesses, who often benefit the most.

Analysis of external threats is another hugely important aspect of the SWOT process. This could mean the rise of a new contender in the marketplace or the introduction of new laws and increased compliance in your niche. It could even be socio-economic factors, such as  changing consumer tastes , political upheaval , or a slowdown in the economy. 

As such, the importance of the threats section, though often significant, may vary depending on the situation. Some threats, like an economic downturn, cannot be avoided; you have to batten down the hatches and weather the storm. However, others, such as the introduction of a better, more accessible product by a rival, may require urgent and aggressive action. 

As Miguel de Cervantes once observed in  Don Quixote,  "the man who is prepared has his battle half fought." This is more applicable than ever in today's business world, where those who are caught unawares by changes in the market often disappear into obscurity.

SWOT analysis enables you to avoid this fate and allows you to stay on top of all the crucial aspects of your business. It is one of the most commonly used tools of leadership and is taught on all serious management courses. Every business owner – big or small – can benefit from it, and it's a highly recommended process wherever you are on your entrepreneurial journey.

Why else is SWOT analysis important? Let us know your thoughts in the comment section below.

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How To Write an Essay About Swot Analysis

Understanding swot analysis.

Before writing an essay about SWOT analysis, it's crucial to understand what SWOT stands for and how it is used. SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats. It's a framework that helps organizations or individuals to identify internal and external factors that are favorable and unfavorable to achieving their objectives. Start your essay by explaining each component of SWOT: Strengths (what an organization or individual does well), Weaknesses (areas that need improvement), Opportunities (external factors that can be exploited for benefit), and Threats (external factors that could cause trouble). It's important to understand that SWOT Analysis is a strategic planning tool used in a variety of fields, from business management to personal development.

Developing a Thesis Statement

Your essay should be centered around a clear, concise thesis statement. This statement should present a specific viewpoint or argument about SWOT analysis. For instance, you might discuss the importance of SWOT analysis in strategic planning, analyze its effectiveness in a particular case study, or argue for modifications to the traditional SWOT analysis model to better suit modern business environments. Your thesis will guide the direction of your essay, providing a structured and focused analysis.

Gathering and Presenting Examples

To support your thesis, it's effective to gather and present examples of SWOT analysis. You might choose a specific company, industry, or even a personal scenario where SWOT analysis has been applied. Discuss how the four elements of SWOT were identified and used in decision-making processes. Providing real-life examples will make your essay more tangible and relatable, allowing readers to see the practical application of the theory.

Analyzing the Effectiveness of SWOT Analysis

Dedicate a section of your essay to critically analyzing the effectiveness of SWOT analysis. Discuss its advantages, such as its simplicity and comprehensiveness, as well as its limitations, which might include its subjective nature or lack of prioritization. You can also explore how SWOT analysis can be complemented with other strategic planning tools for more robust results.

Concluding the Essay

Conclude your essay by summarizing the main points and restating your thesis in light of the discussion. Your conclusion should tie together the analysis and emphasize the overall significance of SWOT analysis in strategic planning. You might also want to suggest areas for future research or potential improvements in the methodology of SWOT analysis.

Reviewing and Refining Your Essay

After writing your essay, take time to review and refine it. Ensure that your arguments are clearly articulated and supported by examples. Check for grammatical accuracy and ensure that your essay flows logically from one point to the next. Consider seeking feedback from peers or instructors to further improve your essay. A well-crafted essay on SWOT analysis will not only demonstrate your understanding of the framework but also your ability to critically engage with management and planning tools.

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Home / Essay Samples / Business / Swot Analysis / The Importance Of SWOT Analysis And The Meaning Of Each Component

The Importance Of SWOT Analysis And The Meaning Of Each Component

• Category: Philosophy , Sociology , Business
• Topic: Meaning , Society , Swot Analysis

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