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Learn how to conduct a SWOT Analysis to identify situational strengths and weaknesses, as well as opportunities and threats. |
Change is an inevitable part of community organizing. If you know how to take stock of the strengths, weaknesses, opportunities, and threats, you are more likely to plan and act effectively.
SWOT provides a tool to explore both internal and external factors that may influence your work.
SWOT stands for: S trength, W eakness, O pportunity, T hreat. A SWOT analysis guides you to identify your organization’s strengths and weaknesses (S-W), as well as broader opportunities and threats (O-T). Developing a fuller awareness of the situation helps with both strategic planning and decision-making.
The SWOT method was originally developed for business and industry, but it is equally useful in the work of community health and development, education, and even for personal growth.
SWOT is not the only assessment technique you can use. Compare it with other assessment tools in the Community Tool Box to determine if this is the right approach for your situation. The strengths of this method are its simplicity and application to a variety of levels of operation.
A SWOT analysis can offer helpful perspectives at any stage of an effort. You might use it to:
SWOT also offers a simple way of communicating about your initiative or program and an excellent way to organize information you've gathered from studies or surveys.
A SWOT analysis focuses on Strengths, Weaknesses, Opportunities, and Threats.
Remember that the purpose of performing a SWOT is to reveal positive forces that work together and potential problems that need to be recognized and possibly addressed.
We will discuss the process of creating the analysis below, but first here are a few sample layouts for your SWOT analysis.
Ask participants to answer these simple questions: what are the strengths and weaknesses of your group, community, or effort, and what are the opportunities and threats facing it?
Strengths | Weaknesses | Opportunities | Threats |
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|
If a looser structure helps you brainstorm, you can group positives and negatives to think broadly about your organization and its external environment.
Below is a third option for structuring your SWOT analysis, which may be appropriate for a larger initiative that requires detailed planning. This "TOWS Matrix" is adapted from Fred David's Strategic Management text.
1. 2. 3. 4. | 1. 2. 3. 4. | |
1. 2. 3. 4. | Opportunity-Strength (OS) Strategies Use the strengths to take advantage of opportunities 1. 2. | Opportunity-Weakness (OW) Strategies Overcome weaknesses by taking advantage of opportunities 1. 2. |
1. 2. 3. 4. | Threat-Strength (TS) Strategies Use strengths to avoid threats 1. 2. | Threat-Weakness (TW) Strategies Minimize weaknesses and avoid threats 1. 2. |
David gives an example for Campbell Soup Company that stresses financial goals, but it also illustrates how you can pair the items within a SWOT grid to develop strategies. (This version of the chart is abbreviated.)
|
| |
| Opportunity-Strength (OS) Strategies | Opportunity-Weakness (OW) Strategies |
| Threat-Strength (TS) Strategies | Threat-Weakness (TW) Strategies |
This example also illustrates how threats can become opportunities (and vice versa). The limitation of tin cans (which aren't biodegradable) creates an opportunity for leadership in developing biodegradable containers. There are several formats you can use to do a SWOT analysis, including a basic SWOT form that you can use to prompt analysis, but whatever format you use, don't be surprised if your strengths and weaknesses don't precisely match up to your opportunities and threats. You might need to refine, or you might need to simply look at the facts longer, or from a different angle. Your chart, list or table will certainly reveal patterns.
Internal factors include your resources and experiences. General areas to consider:
Don't be too modest when listing your strengths. If you're having difficulty naming them, start by simply listing your characteristics (e.g.., we're small, we're connected to the neighborhood). Some of these will probably be strengths.
Although the strengths and weakness of your organization are your internal qualities, don't overlook the perspective of people outside your group. Identify strengths and weaknesses from both your own point of view and that of others, including those you serve or deal with. Do others see problems--or assets--that you don't?
How do you get information about how outsiders perceive your strengths and weaknesses? You may know already if you've listened to those you serve. If not, this might be the time to gather that type of information. See related sections for ideas on conducting focus groups , user surveys , and listening sessions .
Cast a wide net for the external part of the assessment. No organization, group, program, or neighborhood is immune to outside events and forces. Consider your connectedness, for better and worse, as you compile this part of your SWOT list.
Forces and facts that your group does not control include:
Who develops the swot.
The most common users of a SWOT analysis are team members and project managers who are responsible for decision-making and strategic planning.
But don't overlook anyone in the creation stage!
An individual or small group can develop a SWOT analysis, but it will be more effective if you take advantage of many stakeholders. Each person or group offers a different perspective on the strengths and weaknesses of your program and has different experiences of both.
Likewise, one staff member, or volunteer or stakeholder may have information about an opportunity or threat that is essential to understanding your position and determining your future.
A SWOT analysis is often created during a retreat or planning session that allows several hours for brainstorming and analysis. The best results come when the process is collaborative and inclusive.
When creating the analysis, people are asked to pool their individual and shared knowledge and experience. The more relaxed, friendly and constructive the setting, the more truthful, comprehensive, insightful, and useful your analysis will be.
Steps for conducting a SWOT analysis:
More ideas on conducting successful meetings can be found in Community Tool Box resources on conducting public forums and listening sessions , conducting focus groups , and organizing a retreat .
Better understanding the factors affecting your initiative put you in a better position for action. This understanding helps as you:
As you consider your analysis, be open to the possibilities that exist within a weakness or threat. Likewise, recognize that an opportunity can become a threat if everyone else sees the opportunity and plans to take advantage of it as well, thereby increasing your competition.
Finally, during your assessment and planning, you might keep an image in mind to help you make the most of a SWOT analysis: Look for a "stretch," not just a "fit." As Radha Balamuralikrishna and John C. Dugger of Iowa State University point out, SWOT usually reflects your current position or situation. Therefore one drawback is that it might not encourage openness to new possibilities. You can use SWOT to justify a course that has already been decided upon, but if your goal is to grow or improve, you will want to keep this in mind.
A realistic recognition of the weaknesses and threats that exist for your effort is the first step to countering them with a robust set of strategies that build upon strengths and opportunities. A SWOT analysis identifies your strengths, weaknesses, opportunities and threats to assist you in making strategic plans and decisions.
Online Resources
Coalition Vision, Mission, and Goals defines SWOT Analysis, coalition vision and mission statements, and goals and strategies.
The Essential Guide to SWOT Analysis from Jackson Hille, content associate for FormSwift, a SF-based startup that helps organizations, entrepreneurs, and businesses go paperless.
Mind Tools: SWOT Analysis provides a quick overview of SWOT
Quality Guide: SWOT Analysis is a helpful guide from Management Sciences for Health and United Nations Children's Fund.
Print Resources
David, F. (1993). Strategic Management , 4th Ed. New York, NY: Macmillan Publishing Company.
Jones, B. (1990). Neighborhood Planning: A Guide for Citizens and Planners . Chicago and Washington, DC: Planners Press, American Planning Association.
Updated: August 02, 2024
Published: August 01, 2024
“ Our business is absolutely flawless and we have nothing to improve upon ” — said no business owner ever. Instead, we business owners often think of all the ways we could potentially grow our businesses and guard against threats.
I often hear things like:
“Why are my customers not increasing?”
“If only there was a way to find out how to establish my business.”
“My competitors are doing so well, what am I doing wrong?”
The solution lies in one word: SWOT analysis. Well that’s two words, but you get my drift.
I recently conducted a SWOT analysis for my law firm marketing business and it changed everything. In this post, I’ll share my findings.
In this article:
Importance of a swot analysis, parts of a swot analysis, external and internal factors of a swot analysis, how do you write a good swot analysis.
How to act on a swot analysis, 6 swot analysis tips from real professionals, when to use a swot analysis.
5 Research and Planning Templates + a Free Guide on How to Use Them in Your Market Research
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A SWOT analysis is a strategic planning technique that puts your business in perspective using the following lenses: Strengths, Weaknesses, Opportunities, and Threats. Using a SWOT analysis helps you identify ways your business can improve and maximize opportunities, while simultaneously determining negative factors that might hinder your chances of success.
While it may seem simple on the surface, a SWOT analysis allows you to make unbiased evaluations on:
Practically anything that requires strategic planning, internal or external, can have the SWOT framework applied to it, helping you avoid unnecessary errors down the road from lack of insight.
You may have noticed by now that SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. The framework seems simple enough that you’d be tempted to forgo using it at all, relying instead on your intuition to take these things into account.
As a small business owner, I was tempted to forgo using it, thinking I knew everything about my business anyway. I was wrong. Doing a SWOT analysis is important. Here’s why.
A SWOT analysis is an important step in your strategic process because it gives you the opportunity to explore both the potential risks and the exciting possibilities that lie ahead. You’re giving yourself the space to dream, evaluate, and worry before taking action.
Your insights then turn into assets as you create the roadmap for your initiative.
For instance, making a SWOT analysis for my business allowed me to consider the weaknesses and threats that my business might face in the future, which in turn led me to address any concerns or challenges and strategize on how to mitigate those risks.
At the same time, I was able to identify strengths and opportunities which helped inspire innovative ideas and helped me dream big. Both are equally important.
Instead of diving head first into planning and execution, I had to first take inventory of all my assets and roadblocks. This process helped me develop strategies that leverage my strengths and opportunities while addressing and mitigating the impact of weaknesses and threats.
As a result, I gained a comprehensive understanding of my current situation and created a more specific and effective roadmap. Plus, a SWOT analysis is inherently proactive. This means I was better equipped to make informed decisions, allocate resources effectively, and set realistic goals.
As I continued to identify weaknesses and threats, I was better able to account for them in my roadmap, thereby improving my chances of success.
Also, accounting for mitigating factors allows me to allocate my resources wisely and make informed decisions that lead to sustainable growth. Using the SWOT analysis as a guide, I can confidently face challenges and seize opportunities.
As my organization grows and changes, I’ll be able to strike things off my old SWOTs and make additions. With this I can look back at where I came from and look ahead at what’s to come.
In other words, SWOT analyses serve as a tangible history of your progress and provide a reference point for future decision-making. With each update, your SWOT analysis becomes a living document that guides your strategic thinking and helps you stay agile and adaptable in an ever-changing business landscape.
By maintaining this written record, you foster a culture of continuous improvement and empower your team to make data-driven decisions and stay aligned with your long-term vision.
Conducting a SWOT analysis will help you strategize effectively, unlock valuable insights, and make informed decisions. But what exactly does a SWOT analysis include?
Let’s explore each component: Strengths, Weaknesses, Opportunities, and Threats.
SWOT strengths are the unique advantages and internal capabilities that give your company a competitive edge in the market. A strong brand reputation, innovative products or services, or exceptional customer service are just a few examples.
I have discovered that by identifying and capitalizing on your strengths, you can build a solid foundation for growth. You can also use those strengths in other areas that might need additional support, for instance, increasing customer satisfaction .
When asked how conducting a SWOT analysis on his business helped him, Rahul Vij , managing director of WebSpero Solutions replied that the analysis identified “a key strength in our customer service, which we then promoted more heavily in our marketing campaigns, resulting in a 20% increase in customer satisfaction scores.”
When I was looking into the strengths of my own business, here are some questions that I asked myself:
– Zeeshan Akhtar , head of marketing at Mailmodo
“It's easy to fall into a groupthink because usually, SWOT analysis is conducted by management. What we did differently in this case, given the issue we wanted to tackle, was involve an external consultant as well as internal employees to get more diverse perspectives and creative solutions.”
– Zach Dannett , cofounder at Tumble
“ During a SWOT analysis, delving deep into competitors' operations to uncover their vulnerabilities can be invaluable. For instance, discovering a key competitor struggling with customer service inefficiencies through reviews and market feedback can highlight an opportunity for differentiation.”
– Harrison Tang , CEO of Spokeo
“Set priorities and focus on the most impactful areas first. Allocate resources strategically, prioritizing initiatives that promise the greatest returns.”
Arham Khan , CEO of Pixated
“ In terms of leveraging the results, businesses need to be proactive. Don't just see it as a one-time report - use it as a roadmap. Whether reinforcing strengths, addressing weaknesses or pursuing opportunities, SWOT should influence strategic planning and product roadmaps. Revisit it annually too, as situations evolve. ”
– Kelly Indah , editor-in-chief at Increditools
Ultimately, a SWOT analysis can measure and tackle both big and small challenges, from deciding whether or not to launch a new product to refining your social media strategy.
When conducting your own SWOT analysis, you may face problems like data overload, differing opinions, and actionability. I certainly did. However in my experience, these problems can be solved by:
I will conclude this piece by saying don‘t underestimate the power of taking a step back from time to time to assess where you’ve been, where you‘re at, and where you’re going.
I firmly believe that regularly conducting a SWOT analysis is critical for any entrepreneur looking to grow.
Editor's note: This post was originally published in May 2018 and has been updated for comprehensiveness.
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How to conduct a swot analysis, what is a swot analysis used for, additional resources, swot analysis.
A framework to understand and analyze a company’s Strengths, Weaknesses, Opportunities, and Threats
SWOT stands for S trengths, W eaknesses, O pportunities, and T hreats. A SWOT analysis is a framework to help assess and understand the internal and external forces that may create opportunities or risks for an organization.
Strengths and weaknesses are internal factors. They are characteristics of a business that give it a relative advantage (or disadvantage, respectively) over its competition.
Opportunities and threats, on the other hand, are external factors. Opportunities are elements of the external environment that management can seize upon to improve business performance (like revenue growth or improved margins).
Threats are elements of the external environment that may endanger a firm’s competitive advantage (s), or even its ability to operate as a going concern (think regulatory issues or technological disruption).
Strengths may be any number of areas or characteristics where a company excels and has a competitive advantage over its peers. Advantages may be more qualitative in nature and therefore difficult to measure (like a great corporate culture, strong brand recognition, proprietary technology, etc.), or they may be more quantitative (like best-in-class margins, above-average inventory turnover, category-leading return on equity, etc.).
Weaknesses are areas or characteristics where a business is at a competitive disadvantage relative to its peers. Like strengths, these can also be more qualitative or quantitative. Examples include inexperienced management, high employee turnover, low (or declining) margins, and high (or excessive) use of debt as a funding source.
The “Opportunities” section should highlight external factors that represent potential growth or improvement areas for a business. Consider opportunities like a growing total addressable market (TAM) , technological advancements that might help improve efficiency, or changes in social norms that are creating new markets or new sub-segments of existing markets.
Threats are external forces that represent risks to a business and its ability to operate. The categories tend to be similar to the “Opportunities” section, but directionally opposite. Consider examples like an industry in decline (which is the same as a decreasing TAM), technological innovation that could disrupt the existing business and its operations, or evolving social norms that make existing product offerings less attractive to a growing number of consumers.
A SWOT analysis is rarely completed in isolation; it generally makes up one part of a broader business analysis. And while it is itself an assessment framework, a SWOT analysis is also an effective tool to help summarize other findings.
For example, an analyst can’t really assess a company’s strengths and weaknesses without first understanding the business and its industry. They may wish to leverage other tools and frameworks in order to accomplish this, including:
The same is true for external factors – opportunities and threats. It’s nearly impossible to understand these without first considering:
A SWOT analysis is used differently by different stakeholders.
For example, a management team will use the framework to support strategic planning and risk management. SWOT helps them visualize the firm’s relative advantages and disadvantages in order to better understand where and how the organization should allocate resources, either towards growth or risk reduction initiatives.
The analyst community, on the other hand, may seek to understand (and quantify) strengths, weaknesses, opportunities, and threats in order to assess the business more completely.
Consider that findings from a SWOT analysis may help inform model assumptions among analysts. It could be an equity researcher trying to estimate the fair market value of a company’s shares , or a credit analyst looking to better understand a borrower’s creditworthiness.
In general, the SWOT framework is considered by many to be one of the most useful tools available for strategic planning and business analysis.
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Home > Research Glossary > SWOT Analysis
SWOT analysis is a strategy used to assess the internal strengths and weaknesses , as well as external opportunities and threats, of a business, organization, or project. The name itself is an acronym of the four main elements in the analysis process.
SWOT analysis is widely used across various industries and sectors, including business, marketing, healthcare , education, and nonprofit organizations . It is a valuable tool for assessing projects, formulating business strategies, conducting market research , and evaluating potential investments.
To conduct a SWOT analysis , businesses need to identify and evaluate each of the four components. Two components focus on the business internally while the others focus on outside factors that influence the organization:
Strengths are Internal features and resources that give the organization a competitive edge or enhance its business objectives . Some common strengths are internal experts, advanced or proprietary technology, strong brand reputation , or unique product offerings.
Weaknesses are internal factors that hinder the organization's performance or put it at a disadvantage compared to competitors. Common weaknesses may include limited financial resources, outdated technology, or lack of experienced staff.
Opportunities are external factors or trends the organization can leverage to reach its objectives. Analyzing opportunities allows businesses to capitalize on positive market conditions , new consumer trends, or emerging markets.
Threats are external factors that could negatively impact the organization's performance or stability. These could include increased competition, changes in laws, economic downturns , or unexpected major events or disruption .
SWOT analysis provides several benefits for organizations:
While a SWOT analysis is a valuable tool, it is not without its limitations, including:
To implement a SWOT analysis structure successfully, organizations can take the following steps:
LexisNexis provides research solutions that assist businesses and professionals in conducting SWOT analysis with accurate and up-to-date information, including news, legal documents, competitor data, industry reports, and market analysis. The advanced search capabilities and filters within Nexis ® Research Solutions make it easy to explore relevant data and uncover valuable insights to conduct a thorough and well-informed SWOT analysis.
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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.
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.
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.
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.
Can be applied to any company and situation.
The SWOT Analysis is so simple in its composition that it can be applied to any company in any industry. It can also be used among a wide range of situations and strategic initiatives.
While other evaluation tools may only be able to assess one scenario at a time, the SWOT process can tell a company four things at one time. This means leaders can have four comprehensive discussions about pertinent issues to the company at one time.
There is a lot of work required in creating a SWOT Analysis, and leaders can benefit from the combination of quantitative and qualitative information. Having this data available can improve planning, increase communication, and ultimately lead to better decision-making.
Leaders do not need an expensive piece of software or consultant to come in to guide them through the process. All leaders need is a spreadsheet and time to fill out a SWOT Analysis.
There is no need for training or technical skills to complete this process. Therefore, anyone can do this. Also, its simplicity makes it easier for others to understand the process and the results so leaders can quickly share the information with other staff members regardless of their position in the company.
Depending on when business leaders decide to do a SWOT Analysis, it can help leaders uncover opportunities for profitability or fend off new competitors that have entered the market. Either way, this tool enables leaders to create a plan of attack for maximizing strengths or managing threats and weaknesses depending on the scenario.
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.
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.
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.
Lack of prioritization.
A SWOT Analysis can be overwhelming if leaders are not clear on what they are going to prioritize. The tool itself does not do this automatically, so it can be difficult to decide what to address first. SWOT is designed to address pertinent issues, so leaders may feel pressed to handle everything at once.
What do leaders do if a factor is both a weakness and a strength? How can they manage this using SWOT? Unfortunately, the tool does not provide a reliable way to do this. Leaders have to attach their values to factors that show up twice and decide the best step for addressing them.
A SWOT Analysis is only as functional as the data put into it. It will reflect the biases and experience of the individual creating it. This makes it impossible to receive objective data concerning SWOT, so leaders may wonder if the information is useful.
During the SWOT process, it is likely that a leader will involve various managers, department heads, senior executives, and even frontline employees. While all of their opinions may be valid, it is difficult to address all of their input. Therefore, some opinions will be left out.
As stated above, the SWOT analysis does not have a built-in mechanism for prioritization, so leaders are going to have to handle this on their own. With the help of others on the team, leaders can begin to assign levels of importance to each component of the SWOT analysis. This helps everyone know what the most significant issue to address first is.
Regardless of the issue that may have driven the company to conduct a SWOT analysis, leaders should always keep in mind how their company matches up the competition. Does the company offer something to customers that competitors cannot? It is essential always to have this in mind when constructing a SWOT analysis, as competition is something leaders will frequently have to address.
Some SWOT items may be easy to identify, but others may need a bit more research. Gathering data for this analysis can be daunting, but if leaders know where to look for information, the process can be a lot easier. For strengths and weaknesses, having a look at core competencies, resources, value chain activities, R&D processes, all functional areas, and organizational culture can be a place to start. Opportunities and threats can be gleaned from assessing the competition by keeping an eye on market changes and conducting a separate PESTEL (political, economic, social, technological, environmental and legal) analysis.
It is always a good idea to keep the organization in the know of any analysis or evaluation that is going on. Word travels fast, and any change in organizational behavior can make employees feel like they are in the dark. Leaders should be upfront about why this analysis is necessary and what it will do for the company. Some individuals may have never heard of a SWOT analysis, so it is best to be safe than sorry to explain what it is and why it is needed.
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.
A SWOT analysis helps you identify strengths, weaknesses, opportunities, and threats for a specific project or your overall business plan. It’s used for strategic planning and to stay ahead of market trends. Below, we describe each part of the SWOT framework and show you how to conduct your own.
Whether you’re looking for external opportunities or internal strengths, we’ll walk you through how to perform your own SWOT analysis, with helpful examples along the way.
A SWOT analysis is a technique used to identify strengths, weaknesses, opportunities, and threats for your business or even a specific project. It’s most widely used by organizations—from small businesses and non-profits to large enterprises—but a SWOT analysis can be used for personal purposes as well.
While simple, a SWOT analysis is a powerful tool for helping you identify competitive opportunities for improvement. It helps you improve your team and business while staying ahead of market trends.
SWOT is an acronym that stands for:
Opportunities
When analyzed together, the SWOT framework can paint a larger picture of where you are and how to get to the next step. Let’s dive a little deeper into each of these terms and how they can help identify areas of improvement.
Strengths in SWOT refer to internal initiatives that are performing well. Examining these areas helps you understand what’s already working. You can then use the techniques that you know work—your strengths—in other areas that might need additional support, like improving your team’s efficiency .
When looking into the strengths of your organization, ask yourself the following questions:
What do we do well? Or, even better: What do we do best?
What’s unique about our organization?
What does our target audience like about our organization?
Which categories or features beat out our competitors?
Customer service: Our world-class customer service has an NPS score of 90 as compared to our competitors, who average an NPS score of 70.
Weaknesses in SWOT refer to internal initiatives that are underperforming. It’s a good idea to analyze your strengths before your weaknesses in order to create a baseline for success and failure. Identifying internal weaknesses provides a starting point for improving those projects.
Identify the company’s weaknesses by asking:
Which initiatives are underperforming and why?
What can be improved?
What resources could improve our performance?
How do we rank against our competitors?
E-commerce visibility: Our website visibility is low because of a lack of marketing budget , leading to a decrease in mobile app transactions.
Opportunities in SWOT result from your existing strengths and weaknesses, along with any external initiatives that will put you in a stronger competitive position. These could be anything from weaknesses that you’d like to improve or areas that weren’t identified in the first two phases of your analysis.
Since there are multiple ways to come up with opportunities, it’s helpful to consider these questions before getting started:
What resources can we use to improve weaknesses?
Are there market gaps in our services?
What are our business goals for the year?
What do your competitors offer?
Marketing campaign: To improve brand visibility, we’ll run ad campaigns on YouTube, Facebook, and Instagram.
Threats in SWOT are areas with the potential to cause problems. Different from weaknesses, threats are external and out of your control. This can include anything from a global pandemic to a change in the competitive landscape.
Here are a few questions to ask yourself to identify external threats:
What changes in the industry are cause for concern?
What new market trends are on the horizon?
Where are our competitors outperforming us?
New competitor: With a new e-commerce competitor set to launch within the next month, we could see a decline in customers.
One of the most popular ways to create a SWOT analysis is through a SWOT matrix—a visual representation of strengths, weaknesses, opportunities, and threats. The matrix comprises four separate squares that create one larger square.
A SWOT matrix is great for collecting information and documenting the questions and decision-making process . Not only will it be handy to reference later on, but it’s also great for visualizing any patterns that arise.
Check out the SWOT matrix below for a simple example. As you can see, each of the quadrants lists out the company's strengths, weaknesses, opportunities, and threats.
When used correctly and effectively, your matrix can be a great toolkit for evaluating your organization’s strengths and weaknesses.
A SWOT analysis can be conducted in a variety of ways. Some teams like to meet and throw ideas on a whiteboard, while others prefer the structure of a SWOT matrix. However you choose to make your SWOT analysis, getting creative with your planning process allows new ideas to flow and results in more unique solutions.
There are a few ways to ensure that your SWOT analysis is thorough and done correctly. Let’s take a closer look at some tips to help you get started.
Often, strengths and weaknesses stem from internal processes. These tend to be easier to solve since you have more control over the outcome. When you come across internal factors, you can start implementing improvements in a couple of different ways.
Meet with department stakeholders to form a business plan around how to improve your current situation.
Research and implement new tools, such as a project management tool , that can help streamline these processes for you.
Take immediate action on anything that can be changed in 24 hours or less. If you don’t have the capacity, consider delegating these items to others with deadlines.
The way you go about solving internal factors will depend on the type of problem. If it’s more complex, you might need to use a combination of the above or a more thorough problem management process.
External factors stem from processes outside of your control. This includes competitors, market trends, and anything else that’s affecting your organization from the outside in.
External factors are trickier to solve, as you can’t directly control the outcome. What you can do is pivot your own processes in a way that mitigates negative external factors.
You can work to solve these issues by:
Competing with market trends
Forecasting market trends before they happen
Improving adaptability to improve your reaction time
Track competitors using reporting tools that automatically update you as soon as changes occur
While you won’t be able to control an external environment, you can control how your organization reacts to it.
Let’s say, for instance, that you’re looking to compete with a market trend. For example, a competitor introduced a new product to the market that’s outperforming your own. While you can’t take that product away, you can work to launch an even better product or marketing campaign to mitigate any decline in sales.
Brainstorming new and innovative ideas can help to spur creativity and inspire action. To host a high impact brainstorming session, you’ll want to:
Invite team members from various departments. That way, ideas from each part of the company are represented.
Be intentional about the number of team members you invite, since too many participants could lead to a lack of focus or participation. The sweet spot for a productive brainstorming session is around 10 teammates.
Use different brainstorming techniques that appeal to different work types.
Set a clear intention for the session.
In order to generate creative ideas, you have to first invite them. That means creating fun ways to come up with opportunities. Try randomly selecting anonymous ideas, talking through obviously bad examples, or playing team building games to psych up the team.
Now, rank the opportunities. This can be done as a team or with a smaller group of leaders. Talk through each idea and rank it on a scale of one through 10. Once you’ve agreed on your top ideas based on team capabilities, competencies, and overall impact, it’s easier to implement them.
It’s all too easy to feel finished at this stage —but the actual work is just beginning. After your SWOT analysis, you’ll have a list of prioritized opportunities. Now is the time to turn them into strengths. Use a structured system such as a business case , project plan, or implementation plan to outline what needs to get done—and how you plan to do it.
A SWOT analysis template is often presented in a grid format, divided into four quadrants. Each quadrant represents one of the four elements.
Use this free SWOT analysis template to jump-start your team’s strategic planning.
Identify the strengths that contribute to achieving your objectives. These are internal characteristics that give you an advantage. Some examples could be a strong brand reputation, an innovative culture, or an experienced management team.
Next, focus on weaknesses. These are internal factors that could serve as obstacles to achieving your objectives. Common examples might include a lack of financial resources, high operational costs, or outdated technology.
Move on to the opportunities. These are external conditions that could be helpful in achieving your goals. For example, you might be looking at emerging markets, increased demand, or favorable shifts in regulations.
Lastly, let's address threats. These are external conditions that could negatively impact your objectives. Examples include increased competition or potential economic downturns.
A SWOT analysis can help you improve processes and plan for growth. While similar to a competitive analysis , it differs because it evaluates both internal and external factors. Analyzing key areas around these opportunities and threats will equip you with the insights needed to set your team up for success.
A SWOT analysis isn’t only useful for organizations. With a personal SWOT analysis, you can examine areas of your life that could benefit from improvement, from your leadership style to your communication skills. These are the benefits of using a SWOT analysis in any scenario.
One of the biggest benefits of conducting an analysis is to determine opportunities for growth. It’s a great starting point for startups and teams that know they want to improve but aren’t exactly sure how to get started.
Opportunities can come from many different avenues, like external factors such as diversifying your products for competitive advantage or internal factors like improving your team’s workflow . Either way, capitalizing on opportunities is an excellent way to grow as a team.
Identifying weaknesses and threats during a SWOT analysis can pave the way for a better business strategy.
Ultimately, learning from your mistakes is the best way to excel. Once you find areas to streamline, you can work with team members to brainstorm an action plan . This will let you use what you already know works and build on your company’s strengths.
Whether you have a risk register in place or not, it’s always crucial to identify risks before they become a cause for concern. A SWOT analysis can help you stay on top of actionable items that may play a part in your risk decision-making process.
It may be beneficial to pair your SWOT analysis with a PEST analysis, which examines external solutions such as political, economic, social, and technological factors—all of which can help you identify and plan for project risks .
You won’t always need an in-depth SWOT analysis. It’s most useful for large, general overviews of situations, scenarios, or your business.
A SWOT analysis is most helpful:
Before you implement a large change—including as part of a larger change management plan
When you launch a new company initiative
If you’d like to identify opportunities for growth and improvement
Any time you want a full overview of your business performance
If you need to identify business performance from different perspectives
SWOT analyses are general for a reason—so they can be applied to almost any scenario, project, or business.
Although SWOT is a useful strategic planning tool for businesses and individuals alike, it does have limitations. Here’s what you can expect.
The simplicity of SWOT analysis makes it a go-to tool for many. Because it is simple, it takes the mystery out of strategic planning and lets people think critically about their situations without feeling overwhelmed.
For instance, a small bakery looking to expand its operations can use SWOT analysis to easily understand its current standing. Identifying strengths like a loyal customer base, weaknesses such as limited seating space, opportunities like a rising trend in artisanal baked goods, and threats from larger chain bakeries nearby can all be accomplished without any specialized knowledge or technical expertise.
Its versatile nature allows SWOT analysis to be used across various domains. Whether it’s a business strategizing for the future or an individual planning their career path, SWOT analysis lends itself well.
For example, a tech start-up in the competitive Silicon Valley landscape could employ SWOT to navigate its pathway to profitability. Strengths might include a highly skilled development team; weaknesses could be a lack of brand recognition; opportunities might lie in emerging markets; and threats could include established tech giants.
SWOT excels in identifying external factors that could impact performance. It nudges organizations to look beyond the present and anticipate potential future scenarios.
A retail company, for example, could use SWOT analysis to identify opportunities in e-commerce and threats from changing consumer behavior or new competitors entering the market. By doing so, the company can strategize on how to leverage online platforms to boost sales and counteract threats by enhancing the customer experience or adopting new technologies.
The subjective nature of SWOT analysis may lead to biases. It relies heavily on individual perceptions, which can sometimes overlook crucial data or misinterpret information, leading to skewed conclusions.
For example, a manufacturing company might undervalue the threat of new entrants in the market due to an overconfidence bias among the management. This subjectivity might lead to a lack of preparation for competitive pricing strategies, ultimately affecting the company's market share.
SWOT analysis lays out issues but falls short on prioritizing them. Organizations might struggle to identify which elements deserve immediate attention and resources.
For instance, a healthcare provider identifying numerous opportunities for expansion into new services may become overwhelmed with the choices. Without a clear way to rank these opportunities, resources could be spread too thinly or given to projects that do not have as much of an impact, leading to less-than-ideal outcomes.
Since SWOT analysis captures a snapshot at a particular moment, it may miss the evolving nature of challenges and opportunities, possibly leading to outdated strategies. An example could be a traditional retail business that performs a SWOT analysis and decides to focus on expanding physical stores, overlooking the growing trend of e-commerce. As online shopping continues to evolve and gain popularity, the static analysis might lead to investment in areas with diminishing returns while missing out on the booming e-commerce market trend.
What are the five elements of swot analysis.
Traditionally, SWOT stands for its four main elements: strengths, weaknesses, opportunities, and threats. However, a fifth essential element often overlooked is "actionable strategies." Originally developed by Albert Humphrey, SWOT is more than just a list—it's a planning tool designed to generate actionable strategies for making informed business decisions. This fifth element serves to tie the other four together, enabling departments like human resources and marketing to turn analysis into actionable plans.
A comprehensive SWOT analysis should focus on the internal and external factors that affect your organization. Internally, consider your strong brand and product line as your strengths, and maybe your supply chain weaknesses. Externally, you'll want to look at market share, partnerships, and new technologies that could either pose opportunities or threats. You should also account for demographics, as it helps in market targeting and segmentation.
Writing an effective SWOT analysis begins with research. Start by identifying your strengths, like a strong brand, and your weaknesses, like a small human resources department. Following that, look outward to find opportunities, possibly in technological advancement, and threats, like fluctuations in market share. Many businesses find it helpful to use a free SWOT analysis template to structure this information. A good SWOT analysis doesn't just list these elements; it integrates them to provide a clear roadmap for making business decisions.
New technologies: Rapid technological advancement can make your product or service obsolete.
Supply chain disruptions: Whether due to natural disasters or geopolitical tensions, an unstable supply chain can seriously jeopardize your operations.
Emerging competitors: New players entering the market can erode your market share and offer alternative solutions to your customer base.
Regulatory changes: New laws or regulations can add costs and complexity to your business, affecting your competitiveness.
Once you've completed a SWOT analysis, use the results as a decision-making aid. It can help prioritize actions, develop strategic plans that play to your strengths, improve weaknesses, seize opportunities, and counteract threats. It’s a useful tool for setting objectives and creating a roadmap for achieving them.
A SWOT analysis can be an effective technique for identifying key strengths, weaknesses, opportunities, and threats. Understanding where you are now can be the most impactful way to determine where you want to go next.
Don’t forget, a bit of creativity and collaboration can go a long way. Encourage your team to think outside of the box with 100+ team motivational quotes .
Understanding swot analysis, how to do a swot analysis.
These frameworks are essential to fundamentally analyzing companies
Ariel Courage is an experienced editor, researcher, and former fact-checker. She has performed editing and fact-checking work for several leading finance publications, including The Motley Fool and Passport to Wall Street.
SWOT (strengths, weaknesses, opportunities, and threats) analysis is a framework used to evaluate a company's competitive position and to develop strategic planning. SWOT analysis assesses internal and external factors, as well as current and future potential. A SWOT analysis is designed to facilitate a realistic, fact-based, data-driven look at the strengths and weaknesses of an organization, initiatives, or within its industry.
SWOT analysis is a technique for assessing the performance, competition, risk, and potential of a business, as well as part of a business such as a product line or division, an industry, or other entity.
Using internal and external data , the technique can guide businesses toward strategies more likely to be successful, and away from those in which they have been, or are likely to be, less successful. Independent SWOT analysts, investors, or competitors can also guide them on whether a company, product line, or industry might be strong or weak and why.
SWOT analysis was first used to analyze businesses. Now, it's often used by governments, nonprofits, and individuals, including investors and entrepreneurs. There is seemingly limitless applications to the SWOT analysis.
Investopedia / Julie Bang
Every SWOT analysis will include the following four categories. Though the elements and discoveries within these categories will vary from company to company, a SWOT analysis is not complete without each of these elements:
Strengths describe what an organization excels at and what separates it from the competition : a strong brand, loyal customer base, a strong balance sheet, unique technology, and so on. For example, a hedge fund may have developed a proprietary trading strategy that returns market-beating results. It must then decide how to use those results to attract new investors.
Weaknesses stop an organization from performing at its optimum level. They are areas where the business needs to improve to remain competitive: a weak brand, higher-than-average turnover, high levels of debt, an inadequate supply chain, or lack of capital.
Opportunities refer to favorable external factors that could give an organization a competitive advantage. For example, if a country cuts tariffs, a car manufacturer can export its cars into a new market, increasing sales and market share .
Threats refer to factors that have the potential to harm an organization. For example, a drought is a threat to a wheat-producing company, as it may destroy or reduce the crop yield. Other common threats include things like rising costs for materials, increasing competition, tight labor supply, and so on.
Analysts present a SWOT analysis as a square segmented into four quadrants, each dedicated to an element of SWOT. This visual arrangement provides a quick overview of the company’s position. Although all the points under a particular heading may not be of equal importance, they all should represent key insights into the balance of opportunities and threats, advantages and disadvantages, and so forth.
The SWOT table is often laid out with the internal factors on the top row and the external factors on the bottom row. In addition, the items on the left side of the table are more positive/favorable aspects, while the items on the right are more concerning/negative elements.
A SWOT analysis can be broken into several steps with actionable items before and after analyzing the four components. In general, a SWOT analysis will involve the following steps.
A SWOT analysis can be broad, though more value will likely be generated if the analysis is pointed directly at an objective. For example, the objective of a SWOT analysis may focused only on whether or not to perform a new product rollout . With an objective in mind, a company will have guidance on what they hope to achieve at the end of the process. In this example, the SWOT analysis should help determine whether or not the product should be introduced.
Every SWOT analysis will vary, and a company may need different data sets to support pulling together different SWOT analysis tables. A company should begin by understanding what information it has access to, what data limitations it faces, and how reliable its external data sources are.
In addition to data, a company should understand the right combination of personnel to have involved in the analysis. Some staff may be more connected with external forces, while various staff within the manufacturing or sales departments may have a better grasp of what is going on internally. Having a broad set of perspectives is also more likely to yield diverse, value-adding contributions.
For each of the four components of the SWOT analysis, the group of people assigned to performing the analysis should begin listing ideas within each category. Examples of questions to ask or consider for each group are in the table below.
Internal Factors
What occurs within the company serves as a great source of information for the strengths and weaknesses categories of the SWOT analysis. Examples of internal factors include financial and human resources , tangible and intangible (brand name) assets, and operational efficiencies.
Potential questions to list internal factors are:
External Factors
What happens outside of the company is equally as important to the success of a company as internal factors. External influences, such as monetary policies , market changes, and access to suppliers, are categories to pull from to create a list of opportunities and weaknesses.
Potential questions to list external factors are:
1. What is our competitive advantage? 2. What resources do we have? 3. What products are performing well? | 1. Where can we improve? 2. What products are underperforming? 3. Where are we lacking resources? |
1. What new technology can we use? 2. Can we expand our operations? 3. What new segments can we test? | 1. What regulations are changing? 2. What are competitors doing? 3. How are consumer trends changing? |
Companies may consider performing this step as a "white-boarding" or "sticky note" session. The idea is there is no right or wrong answer; all participants should be encouraged to share whatever thoughts they have. These ideas can later be discarded; in the meantime, the goal should be to come up with as many items as possible to invoke creativity and inspiration in others.
With the list of ideas within each category, it is now time to clean-up the ideas. By refining the thoughts that everyone had, a company can focus on only the best ideas or largest risks to the company. This stage may require substantial debate among analysis participants, including bringing in upper management to help rank priorities.
Armed with the ranked list of strengths, weaknesses, opportunities, and threats, it is time to convert the SWOT analysis into a strategic plan. Members of the analysis team take the bulleted list of items within each category and create a synthesized plan that provides guidance on the original objective.
For example, the company debating whether to release a new product may have identified that it is the market leader for its existing product and there is the opportunity to expand to new markets. However, increased material costs, strained distribution lines, the need for additional staff, and unpredictable product demand may outweigh the strengths and opportunities. The analysis team develops the strategy to revisit the decision in six months in hopes of costs declining and market demand becoming more transparent.
Use a SWOT analysis to identify challenges affecting your business and opportunities that can enhance it. However, note that it is one of many techniques, not a prescription.
When preparing a SWOT analysis, several common mistakes can undermine its effectiveness. Let's take a look at some ways your SWOT analysis may go awry.
One easy error to make when preparing a SWOT analysis is failing to be objective and honest in the assessment. Companies often tend to overemphasize their strengths while downplaying weaknesses, resulting in an overly optimistic and unrealistic analysis. This bias can lead to missed opportunities for improvement and leave the organization vulnerable to unforeseen threats. As difficult as it may be to be honest in your analysis, the validity of underlying assumptions is the cornerstone of how useful the SWOT analysis will be.
Another significant mistake is conducting the analysis in isolation, without input from diverse key stakeholders . You should try get to input from employees at various levels, customers, suppliers, and industry experts. Each may have a unique view of your company, and each may come up with different items to be listed in each quadrant based on how they specifically interact with the company.
Yet another common pitfall is neglecting to prioritize or weight the factors identified in the SWOT analysis. Not all strengths, weaknesses, opportunities, and threats are equally important or impactful. Failing to distinguish between major and minor factors can lead to misallocation of resources and misguided strategic decisions. It can be easy for the important items to be buried if too many non-material items are identified.
Another frequent error is treating the SWOT analysis as a one-time exercise. You should be prepared to do a SWOT analysis periodically, The business environment is constantly changing, and a SWOT analysis should be regularly updated to remain relevant. In addition, the analysis itself is just the beginning; its true value lies in using the findings to develop and implement strategic actions. You can then check future SWOT analysis to make sure the company is addressing the major points.
A SWOT analysis won't solve every major question a company has. However, there's a number of benefits to a SWOT analysis that make strategic decision-making easier.
Let's perform a SWOT analysis together by analyzing the strengths, weaknesses, opportunities, and threats of Tesla.
The four steps of SWOT analysis comprise the acronym SWOT: strengths, weaknesses, opportunities, and threats. These four aspects can be broken into two analytical steps. First, a company assesses its internal capabilities and determines its strengths and weaknesses. Then, a company looks outward and evaluates external factors that impact its business. These external factors may create opportunities or threaten existing operations.
Creating a SWOT analysis involves identifying and analyzing the strengths, weaknesses, opportunities, and threats of a company. It is recommended to first create a list of questions to answer for each element. The questions serve as a guide for completing the SWOT analysis and creating a balanced list. The SWOT framework can be constructed in list format, as free text, or, most commonly, as a 4-cell table, with quadrants dedicated to each element. Strengths and weaknesses are listed first, followed by opportunities and threats.
A SWOT analysis is used to strategically identify areas of improvement or competitive advantages for a company. In addition to analyzing thing that a company does well, SWOT analysis takes a look at more detrimental, negative elements of a business. Using this information, a company can make smarter decisions to preserve what it does well, capitalize on its strengths, mitigate risk regarding weaknesses, and plan for events that may adversely affect the company in the future.
While SWOT analysis is a powerful tool, it does have some limitations. It can sometimes oversimplify complex situations and is susceptible to the subjectivity and bias of participants. The analysis also doesn't provide specific guidance on how to address identified issues and can lead to analysis paralysis if not followed by concrete action.
A SWOT analysis is a great way to guide business-strategy meetings. It's powerful to have everyone in the room discuss the company's core strengths and weaknesses, define the opportunities and threats, and brainstorm ideas. Oftentimes, the SWOT analysis you envision before the session changes throughout to reflect factors you were unaware of and would never have captured if not for the group’s input.
A company can use a SWOT for overall business strategy sessions or for a specific segment such as marketing, production, or sales. This way, you can see how the overall strategy developed from the SWOT analysis will filter down to the segments below before committing to it. You can also work in reverse with a segment-specific SWOT analysis that feeds into an overall SWOT analysis.
Although a useful planning tool, SWOT has limitations. It is one of several business planning techniques to consider and should not be used alone. Also, each point listed within the categories is not prioritized the same. SWOT does not account for the differences in weight. Therefore, a deeper analysis is needed, using another planning technique.
Business News Daily. " SWOT Analysis: What It Is and When to Use It ."
Tesla. " Supercharger ."
Reuters. " Tesla Quarterly Deliveries Decline for the First Time in Nearly Four Years ."
Tesla. " Autopilot and Full Self-Driving Capability ."
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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.
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!
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.
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.
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:
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:
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.
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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A SWOT analysis is a strategic planning tool that an organization can use to thoroughly evaluate a business or product. SWOT is an acronym that stands for strengths, weaknesses, opportunities, and threats.
It allows businesses to evaluate their company’s competitive advantage and the flaws of its current business model and create strategies to capitalize on or reduce these observations.
In this article, we’ll discuss the key steps on how to do a SWOT analysis and give several brief examples highlighting the strategy being utilized in different situations.
One of the best things about performing a SWOT analysis is that it can be learned quite quickly and mastered with just a few attempts. Even though each framework is individualized, here are the basic steps involved in building a standard SWOT analysis .
Before embarking on a SWOT, it is vital to define your objectives. This could include things such as developing a comprehensive schematic of the business model and organization as well as the interactions between the various components, determining the competitive advantage and weaknesses of a new product before its rollout, or determining the feasibility of a new policy.
During this stage, it is crucial to determine the resources that would be necessary for you to carry out the exercise, note which of these are accessible, gather these materials, verify the authenticity and reliability of this data, and what limitations you face in terms of data gathering and accuracy. It is also important to ensure that this data is gathered from different sources, perspectives, and levels of the organization to enable you to create a holistic SWOT analysis.
After obtaining data from a wide range of sources, analyze these facts into helpful information and use them to form evidence-based observ–ations. For example, a business that has maintained a strong growth trajectory and a healthy balance sheet over the years can be said to have positive fiscal indicators.
This stage should be akin to a brainstorming session, with members from different divisions within the organization as well as external parties, being allowed to contribute significantly. At this stage, the focus is more on getting as many points as possible, rather than the relevancy or credibility of these inferences.
After making several key points such as the one above, each of these inferences should be arranged in the relevant sections (namely strengths, weaknesses, opportunities, and threats) using the general principles outlined in the article.
Here, the ideas which have been obtained are further refined and can be prioritized according to relevance and importance. Points that are less credible or only minimally important can as well be discarded, allowing you to craft a more concise schematic.
The final step is crafting a swot analysis table. This involves creating a matrix and dividing it into four sections. The internal factors (strengths and weaknesses) are listed above, with the strengths on the left and the weaknesses on the right. On the other hand, the external factors (opportunities and threats) are listed below, with opportunities on the left and threats on the right. Simply list your key points under the appropriate sections to complete the SWOT analysis.
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This is not technically a part of the SWOT analysis technique; however, it is important to remember that the entire point of creating this analytic framework was to carry out a strategic management plan. This means that the business will set out a series of plans to meet the objectives which it has previously outlined, as well as create some reliable metrics or milestones which enable it to measure its progress toward achieving these goals.
To better understand how a SWOT analysis is created, let’s take a look at some examples of SWOT analysis. We’ll analyze three examples, the multinational activewear brand Nike , a hypothetical mom-and-pop diner called Joe’s Brooklyn Burgers, and another hypothetical scenario involving a new product rollout.
From their iconic “swoosh” logo to their equally iconic range of footwear, Nike, Inc. is one of the most easily recognizable activewear brands in the world. While probably best known for its range of iconic footwear, most notably the Air Jordan brand of sneakers, Nike, Inc. is also a leading brand in other sports gear, such as activewear, sports equipment, and wearable fitness tech.
The Nike business model is famous for finding the perfect balance between fashion and functionality when it comes to their products, making them quite popular among both athletes and non-athletes alike. Let’s take a look through this Nike SWOT analysis , which was designed by our platform to figure out how the brand came to dominate the sportswear market.
The objective of this SWOT analysis was to identify the competitive advantage of the brand and educate readers on how the corporation came to dominate the world of activewear. This was identified to be its strong brand equity, low-cost manufacturing, heavy investment in innovative technologies, as well as improving direct-to-consumer sales.
Next, let’s take a look at a SWOT analysis for a small, independent restaurant called Bob’s Brooklyn Burgers. This will allow us to examine how the SWOT analysis of a small business differs from that of a large multinational corporation.
Our hypothetical business is a small, family-owned diner based in Brooklyn that caters to a number of local customers and offers a unique Brooklyn-themed menu. The business has been operating successfully over several decades but has run into some lean times in recent years. Let’s examine the SWOT analysis of this business to better understand the issues it faces and as well craft a brief outline of how it can reclaim its former glory.
Proximity to customers. One of the advantages of being a locally popular restaurant is that they are closer to their customers, which gives them local dominance as well as an advantage over franchised restaurants that may be located further away.
The objective of this SWOT analysis was to determine the issues plaguing the diner and help it design a strategy to improve its current business model. To achieve this, a matching and converting strategy will be used. This means that we will attempt to combine the strengths and opportunities of the business while converting the weaknesses and threats into positive indicators, or at least reducing their negative effects.
First of all, the company can outsource the various professional services listed above in order to enable it to focus on the parts of the business operation where it has a significant advantage over its competitors. This includes providing a top-notch customer experience as well as cooking top-quality meals.
Another option they could look into is utilizing the reach of social media as an avenue to build a strong online food delivery service. The fact that many of their customers are local and live relatively close to the establishment also makes this feasible. This also has the added advantage of diversifying their revenue stream .
Lastly, the company can focus on using its reputation for providing great meals as a focal point for expanding into new territories and new markets.
Now that we have discussed how to perform a SWOT analysis on both large and small companies, let’s focus on the last example in this article: How to perform a SWOT analysis on a hypothetical product launch.
For this example, we will perform a SWOT analysis on the rollout of a hypothetical high-end gas stove known as the Turbo Burner 2000. This example will highlight the competitive advantage of the product as well as the challenges it may face during its launch.
Catering to a narrow niche allows them to better target their branding efforts and increase their profit margin by focusing resources on their key market, which reduces their customer acquisition cost. It also creates an impression of exclusivity, which only serves to further drive up the image of the company as a luxury brand;
Performing a SWOT analysis may be one of the most important activities that any business can carry out within its lifetime. Whether this is done regularly or just as a one-time evaluation, understanding how to get the best out of the technique is key to fully utilizing the benefits and understanding the limitations of the technique.
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Swot analysis: the most overlooked business tool, and how to use it.
Alisha M Pennington is the owner of ATvantage Athletic Training and a business development mentor.
For those of us who never went to business school but found our way into entrepreneurship, it takes practical experience to determine which tools best serve us in the real world. After 10 years of starting and scaling multiple businesses, I can unequivocally state that SWOT analysis is one of the most efficient tools for quickly auditing a business at any stage and determining necessary next steps.
Having its origins date back to the Stanford Research Institute in the 1960s, SWOT analysis has been used across corporate planning for decades; however, it is equally applicable for businesses in any industry that are in the infant and scaling stages. It represents an opportunity to objectively approach the planning process in business while also providing accountability within each section so as not to lean too heavily into either strengths and opportunities or weaknesses and threats. For better or worse, it visually offers a snapshot of the current state of a business and market in a simple four-quadrant table.
Admittedly though, the exercise of conducting a SWOT can feel stale and/or incredibly daunting. With new techniques popping up regularly, it can be tempting to step away from the traditional approach and test out an alternative. But it isn’t called “trusty dusty” for no reason — it is tried and true! So, how does one go about utilizing this tool in their business? Here are three easy steps:
1. Conduct A Business Brain Dump
To effectively evaluate your business, you must be thorough in what is being considered. Whether you enlist heads of departments or you're a sole proprietor, it is important to look at the primary areas of your business and brain dump your inner workings associated with them. These can include, but are not limited to:
• Legalities: This includes business entity formation, compliance, contracts/agreements, insurances, trademarks, licenses, governing oversight and contractors versus employees.
• Accounting: This includes taxes, accounting software, accounts payable and receivable, tracking income and expenses, projections, profit margins, budgeting, procedures for payment processing and cash flow.
• Quality control: This includes customer journey, onboarding/hiring procedures, compliance, customer and product reviews, quality improvement, customer service and processes and automation.
• Marketing: This includes current brand and messaging, public relations, website functionality, social media presence, future growth strategy or customer acquisition plan, scalability of current procedures and future marketing opportunities.
2. Categorize Your Responses
Once you have a full list of what's working and what needs work in your business, categorize it into three primary areas: current markets/strategies, current roadblocks/hurdles and future/long-term aspirations.
Within the current markets/strategies, list out what is going well, the areas you're surpassing the competition and what your market knows you for. In the current roadblocks/hurdles, detail those services you're trying to bring to market, any bottlenecks or systems/procedures that are inefficient or areas within your industry or market that pose a threat. Finally, in the future/long-term aspirations, share the information that is currently in R&D, the future direction of the market/industry and aspirational projections of the business.
3. Create Your SWOT
Use a template, write on a whiteboard or use paper and pen to draw the SWOT and then begin filling it in. This will require your business brain dump and your categorized responses.
Strengths are internal areas within your business that are well taken care of. These could be key personnel, particular characteristics or attributes within the business that give it an advantage or even areas that have been well-developed that put the business ahead of the competition. This could be as simple as strong branding or as exemplary as a nameworthy CEO. Scan your business brain dump and look for areas that stand out as "green" or "very good" or that you could easily respond with because they've been addressed for a long time. In the categorized responses, this will primarily be in the current markets/strategies.
Weaknesses are the internal areas within your business that need to be addressed or that prove to be roadblocks. This might be communication strategy or lack of efficient processes and systems. These might be patterns of behavior you know about your business, areas you purposely avoid because they bring up feelings of dread and may have even been avoided for a lack of knowledge or support to execute. When looking at your brain dump, you may have "redlined" these, let out an audible sigh or cringed at the thought of having to address them. And they're likely in the current roadblocks/hurdles areas of the categorized responses.
Opportunities are external areas in the environment or market that allow us to expand and create growth for the business. Sometimes this is a future version of the industry, known technology that is emerging, an offer/service that is actively being developed or partnerships that will elevate the brand. When looking over the business brain dump, these are the areas that really excite the business owner, probably are front of mind and may have additional resources allocated to them. In the categorized responses, they're either in the current markets/strategies or under the longer-term aspirations.
Threats are the external areas in the environment or market that pose danger to the current state or future of the business. These may have already affected the revenue or profit of the business or could be impending competition or a shift in the market creating concern for the current business model. These items keep the business owner awake at night or dreading opening the email/answering the phone. In the brain dump, these are lingering "in between the lines," likely not explicitly stated but known as the cause for reduced profit margins or limited growth.
Use SWOT analysis not just to determine the next steps for your business but to also help prioritize which areas to focus on. Then strategically detail the opportunity available, being careful to minimize threats and take full advantage of strengths. This can be done as consistently as required but is best served as an annual exercise to evaluate the procedural activity of the business year over year.
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SWOT Analysis is an analysis method used to. evaluate the 'trengths', 'weaknesses, 'opportunities' and threats' involved in an organization, a plan, a project, a person or a business ...
How to do SWOT Analysis. You can conduct a SWOT analysis with the following four steps: Step 1: Selecting a company. If your assignment requires conducting a SWOT analysis, you are either given a case study company by your educational institution or you are free to analyze a company of your own choice.
Panagiotou, 2003). After the 1960s, the SWOT analysis was used by numerous researchers and scholars of strategic planning. In the 1980s, the SWOT analysis was extensively reintroduced (Hadighi & Mahdavi, 2011; Wernerfelt, 1984). Hoskisson et al. (1999) stated that SWOT had become a dominant framework in the field of strategic management in the ...
The SOFT approach is the progenitor of SWOT analysis in all its variations. ... Future research should reflect further on SWOT's long-lasting presence in the field: akin to Laamanen's (2017, p. 6) call to explore taken-for-granted 'strategic planning and strategic issue management systems.' After TAPP's disbandment by SRI in 1971, SWOT ...
SWOT Analysis is an analysis method used to evaluate the Strengths, Weaknesses, Opportunities and Threats involved in an o rganization, a. plan, a pr oject, a program, a person or any kind of ...
Abstract and Figures. A strengths, weaknesses, opportunities, and threats (SWOT) analysis has become a key tool used by businesses for strategic planning. Scholars have conducted SWOT research for ...
The empirical basis of SWOT started in 1952 within the Lockheed's Corporate Development Planning Department. One of its thus far unknown pioneers, Robert Franklin Stewart, became the head of the Theory and Practice of Planning group at the Stanford Research Institute in 1962. In 1965, Stewart published the so-called SOFT Approach in a report ...
Research supports SWOT analysis as a tool for planning purposes. Over the past decade, SWOT research has focused on analyzing organizations for recommended strategic actions. As a methodology for strategic positioning, SWOT analysis has been extended beyond companies to countries and industries and is used in virtually every published business ...
SWOT Analysis (short for strengths, weaknesses, opportunities, threats) is a business strategy tool to assess how an organization compares to its competition. The strategy is historically credited to Albert Humphrey in the 1960s, but this attribution remains debatable. There is no universally-accepted creator. Also known as the SWOT Matrix, it has achieved recognition as useful in ...
Online Resources. Coalition Vision, Mission, and Goals defines SWOT Analysis, coalition vision and mission statements, and goals and strategies.. The Essential Guide to SWOT Analysis from Jackson Hille, content associate for FormSwift, a SF-based startup that helps organizations, entrepreneurs, and businesses go paperless.. Mind Tools: SWOT Analysis provides a quick overview of SWOT
Key Takeaways: SWOT stands for S trengths, W eaknesses, O pportunities, and T hreats. A "SWOT analysis" involves carefully assessing these four factors in order to make clear and effective plans. A SWOT analysis can help you to challenge risky assumptions, uncover dangerous blindspots, and reveal important new insights.
"Make sure your SWOT analysis is based on data and evidence, not just subjective opinions or assumptions. Wherever possible, we tried to back up our assessments with hard numbers and examples, such as revenue figures, client feedback, and competitive research." -Sam Kadel, founder of KBA Web "SWOT analysis shouldn't be done theoretically.
Key Highlights. SWOT is used to help assess the internal and external factors that contribute to a company's relative advantages and disadvantages. A SWOT analysis is generally used in conjunction with other assessment frameworks, like PESTEL and Porter's 5-Forces. Findings from a SWOT analysis will help inform model assumptions for the ...
SWOT analysis is a strategy used to assess the internal strengths and weaknesses, as well as external opportunities and threats, of a business, organization, or project. The name itself is an acronym of the four main elements in the analysis process. SWOT analysis is widely used across various industries and sectors, including business ...
Some SWOT items may be easy to identify, but others may need a bit more research. Gathering data for this analysis can be daunting, but if leaders know where to look for information, the process can be a lot easier. For strengths and weaknesses, having a look at core competencies, resources, value chain activities, R&D processes, all functional ...
Research supports SWOT analysis as a tool for planning purposes. Over the past decade, SWOT research has focused on analyzing organizations for recommended strategic actions.
Writing an effective SWOT analysis begins with research. Start by identifying your strengths, like a strong brand, and your weaknesses, like a small human resources department. Following that, look outward to find opportunities, possibly in technological advancement, and threats, like fluctuations in market share.
SWOT (strengths, weaknesses, opportunities, and threats) analysis is a framework used to evaluate a company's competitive position and to develop strategic planning.
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 ...
Step 6: Draw the SWOT Analysis Table. The final step is crafting a swot analysis table. This involves creating a matrix and dividing it into four sections. The internal factors (strengths and weaknesses) are listed above, with the strengths on the left and the weaknesses on the right. On the other hand, the external factors (opportunities and ...
Research supports SWOT analysis as a tool for planning purposes. Over the past decade, SWOT research has focused on analyzing organizations for recommended strategic actions.
Having its origins date back to the Stanford Research Institute in the 1960s, SWOT analysis has been used across corporate planning for decades; however, it is equally applicable for businesses in ...
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