what is a swot analysis in a business plan

How to Write a SWOT Analysis for a Business Plan

• March 21, 2024
• Business Plan , How to Write

Navigating the complexities of business requires a clear understanding of your strategic position, and a SWOT analysis is an essential tool to help you achieve this clarity. It’s a straightforward method that breaks down into Strengths, Weaknesses, Opportunities, and Threats, providing a snapshot of where your business stands and guiding your future strategic moves.

With this guide, you’ll learn how to leverage your advantages, address challenges, seize new opportunities, and guard against potential threats. Let’s dive into the process together and set a strong foundation for your business’s strategic planning. Let’s dive in!

What is a SWOT Analysis?

A SWOT analysis is a strategic planning tool used to identify and understand the Strengths, Weaknesses, Opportunities, and Threats related to business competition or project planning. This method helps organizations in assessing both internal and external factors that could impact their objectives.

• Strengths : Positive attributes internal to the organization and within its control. Strengths are resources and capabilities that can be used as a basis for developing a competitive advantage.
• Weaknesses : Factors that are within an organization’s control but detract from its ability to attain the desired goal. These are areas the business needs to improve to remain competitive.
• Opportunities : External chances to improve performance in the environment. Opportunities reflect the potential you can leverage to grow your business or project.
• Threats : External challenges to the business’s performance or project’s success. Threats might stem from various sources, such as economic downturns, increased competition, or changes in regulatory landscapes.

Why Use a SWOT Analysis?

We use a SWOT analysis for several important reasons in business and strategic planning:

• Strategic Overview : It provides a concise and comprehensive overview of the current strategic position of the business or project. By examining internal and external factors, stakeholders can get a clear picture of their situation.
• Decision Making : SWOT analysis aids in decision-making by highlighting the strengths to leverage, weaknesses to address, opportunities to pursue, and threats to mitigate. It helps in prioritizing actions based on the analysis.
• Opportunity Identification : SWOT analysis is instrumental in identifying new opportunities for growth and expansion. Opportunities might come from market trends , economic shifts, or changes in technology.
• Risk Management : By identifying threats, organizations can develop strategies to address or mitigate these risks before they become significant issues. It’s a proactive approach to managing potential external challenges.
• Resource Allocation : Understanding the organization’s strengths and weaknesses helps in the effective allocation of resources. Resources can be directed to areas where they are needed most or where they will have the highest impact.
• Competitive Advantage : It helps businesses identify unique features and capabilities that give them a competitive edge in the market. Recognizing these strengths can guide marketing strategies and business development.

How to Write a SWOT Analysis

Writing a strength in a SWOT analysis involves identifying and articulating the internal attributes and resources of a business or project that contribute to its success and competitive advantage. Here’s how to effectively write a strength in a SWOT analysis:

• Identify Internal Positive Attributes : Focus on internal factors that are within the control of the business. These can include resources, skills, or other advantages relative to competitors. Consider areas like strong brand reputation, proprietary technology, skilled workforce, financial resources, strategic location, and efficient processes.
• Be Specific and Relevant : General statements like “we have a good team” are less helpful than specific ones like “our team includes industry-recognized experts in X field.” The more precise you are, the more actionable your analysis will be. Ensure that the strengths are directly relevant to achieving the business’s goals and objectives.
• Use Quantifiable Data When Possible : Whenever you can, back up your strengths with quantifiable data. For example, “a customer satisfaction rate of 95%” or “a 20% lower production cost than industry average” provides concrete evidence of your strengths.
• Compare to Competitors : Strengths are often relative to the competition. Identify areas where your business outperforms competitors or fills a gap in the market. This might involve superior product quality, a unique service model, or a more extensive distribution network.

Example: Instead of simply stating “Experienced management team” as a strength, you could write: “Our management team has over 50 years of combined experience in the tech industry, including a track record of successful product launches and market expansions. This depth of experience provides us with strategic insights and operational expertise that have consistently resulted in market share growth and above-industry-average profitability.”

Writing a weakness in a SWOT analysis involves acknowledging and detailing the internal factors that limit or challenge your business or project’s ability to achieve its goals. Here’s a structured approach to effectively articulate weaknesses in a SWOT analysis:

• Identify Internal Limitations : Focus on internal attributes that are within the control of the organization but currently act as disadvantages. Weaknesses might include insufficient resources, lack of expertise, outdated technology, poor location, limited product range, or inefficiencies in processes.
• Be Specific and Honest : It’s important to be honest and specific about your organization’s weaknesses. Vague statements won’t help in addressing these issues. For instance, rather than saying “we need to improve our marketing,” specify “our current marketing strategy does not effectively reach our target demographic of 18-25-year-olds on digital platforms.”
• Use Internal Comparisons and Feedback : Compare your performance, processes, and resources against your own past performance or industry benchmarks. Utilize customer feedback, employee insights, and performance data to identify areas of weakness.
• Keep it Constructive : While it’s crucial to be honest about weaknesses, frame them in a way that focuses on potential for improvement. Consider each weakness as an area for development and growth.

Example: Instead of a broad statement like “Inadequate online presence,” a more effective description would be: “Our business currently lacks a robust online presence, reflected in our outdated website and minimal engagement on key social media platforms. This limits our ability to attract younger demographics who predominantly discover and interact with brands online. Improving our online visibility and engagement could enhance brand awareness and customer acquisition.”

Opportunities

Writing opportunities in a SWOT analysis involves identifying and articulating external factors that your business or project could exploit to its advantage. Opportunities are elements in the environment that, if leveraged effectively, could provide a pathway for growth, improvement, or competitive advantage. Here’s how to systematically approach writing opportunities in your SWOT analysis:

• Spot External Trends : Focus on the trends and changes outside your organization that could be beneficial. These might include technological advancements, shifts in consumer behavior, market gaps, regulatory changes, or economic trends.
• Be Relevant and Actionable : Ensure that the opportunities you identify are relevant to your business and actionable. They should align with your business’s strengths and capabilities, allowing you to take practical steps toward capitalizing on them.
• Use Market Research : Base your identification of opportunities on solid market research. Understand your target market , industry trends, and the competitive landscape to pinpoint where the real opportunities lie.
• Detail Potential Benefits : Clearly articulate how each opportunity could benefit your business. Whether it’s entering a new market, launching a new product line, or adopting new technology, explain the potential impact on your business growth and success.

Example: Rather than vaguely stating “New market segments,” a more strategic description of an opportunity could be: “With increasing consumer interest in sustainable living, there’s a growing market segment for eco-friendly products. Our business’s strong commitment to sustainability and existing lineup of environmentally friendly products positions us well to capture this emerging market. Expanding our product range to include more items that cater to eco-conscious consumers can tap into this trend, potentially opening up new revenue streams and enhancing our brand’s reputation as a leader in sustainability.”

Writing threats in a SWOT analysis involves identifying external challenges that could pose risks to your business or project’s success. These are factors outside your control that have the potential to harm your operations, financial performance, or strategic positioning. Addressing threats effectively in a SWOT analysis requires a focused approach:

• Identify External Challenges : Start by pinpointing the external factors that could negatively impact your business. This can include new competitors entering the market, changes in consumer preferences, technological advancements that render your product less desirable, regulatory changes, or economic downturns.
• Be Precise and Realistic : Clearly define each threat in specific terms, avoiding vague descriptions. Being realistic about the level of risk each threat poses is crucial; not every external challenge is a dire threat, but understanding the potential impact is key for strategic planning.
• Assess the Impact : For each threat identified, evaluate how it could impact your business. Consider the worst-case scenario and more likely outcomes to gauge the potential severity of the threat. This helps in prioritizing which threats need immediate attention and strategic response.
• Use Reliable Sources : Base your identification of threats on solid, reliable information. This might include industry reports, economic forecasts, and news sources that provide insights into market dynamics and external conditions.
• Consider Your Weaknesses : Link potential threats to your identified weaknesses. Understanding how external threats could exploit your vulnerabilities offers valuable insights for fortifying your business against these challenges.

Example: Instead of broadly stating “Economic uncertainty,” a more actionable description of a threat would be: “The looming economic downturn poses a significant threat to discretionary consumer spending. Given our business’s reliance on non-essential luxury products, a reduction in consumer spending could directly impact sales. This economic uncertainty requires us to diversify our product offerings and identify more value-oriented options to maintain customer engagement and spending during tighter economic conditions.”

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SWOT Analysis: How To Do One [With Template & Examples]

Published: October 05, 2023

As your business grows, you need a roadmap to help navigate the obstacles, challenges, opportunities, and projects that come your way. Enter: the SWOT analysis.

This framework can help you develop a plan to determine your priorities, maximize opportunities, and minimize roadblocks as you scale your organization. Below, let’s go over exactly what a SWOT analysis is, a few SWOT analysis examples, and how to conduct one for your business.

When you’re done reading, you’ll have all the inspiration and tactical advice you need to tackle a SWOT analysis for your business.

What is a SWOT analysis? Importance of a SWOT Analysis How to Write a Good SWOT Analysis SWOT Analysis Examples How to Act on a SWOT Analysis

What is a SWOT analysis?

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:

• Your business or brand.
• Market positioning.
• A new project or initiative.
• A specific campaign or channel.

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.

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Importance of a SWOT Analysis

You’ve 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.

But you shouldn’t. Doing a SWOT analysis is important. Here’s why.

SWOT gives you the chance to worry and to dream.

A SWOT analysis is an important step in your strategic process because it gives you the opportunity to explore both the potential risks and the exciting possibilities that lie ahead.  You’re giving yourself the space to dream, evaluate, and worry before taking action. Your insights then turn into assets as you create the roadmap for your initiative.

For instance, when you consider the weaknesses and threats that your business may face, you can address any concerns or challenges and strategize on how to mitigate those risks. At the same time, you can identify strengths and opportunities, which can inspire innovative ideas and help you dream big. Both are equally important. 

SWOT forces you to define your variables.

Instead of diving head first into planning and execution, you’re taking inventory of all your assets and roadblocks. This process will help you  develop strategies that leverage your strengths and opportunities while addressing and mitigating the impact of weaknesses and threats.

As a result, you'll gain a comprehensive understanding of your current situation and create a more specific and effective roadmap. Plus, a SWOT analysis is inherently proactive. That means you'll be better equipped to make informed decisions, allocate resources effectively, and set realistic goals. 

SWOT allows you to account for mitigating factors.

As you identify weaknesses and threats, you’re better able to account for them in your roadmap, improving your chances of success.

Moreover, accounting for mitigating factors allows you to allocate your resources wisely and make informed decisions that lead to sustainable growth. With a SWOT analysis as a guide, you can confidently face challenges and seize opportunities.

SWOT helps you keep a written record.

As your organization grows and changes, you’ll be able to strike things off your old SWOTs and make additions. You can look back at where you 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.

Parts of a SWOT Analysis

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.

Your 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. By identifying and capitalizing on your strengths, you can foster customer loyalty and build a solid foundation for growth.

No business is flawless. Weaknesses are areas where you may face challenges or fall short of your potential. It could be outdated processes, skill gaps within the team, or inadequate resources. By acknowledging these weaknesses, you can establish targeted initiatives for improvement, upskill your team, adopt new technologies, and enhance your overall operational efficiency.

Opportunities are external factors that can contribute to your company's progress. These may include emerging markets, technological advancements, changes in consumer behavior, or gaps in the market that your company can fill. By seizing these opportunities, you can expand your market reach, diversify your product offerings, forge strategic partnerships, or even venture into untapped territories.

Threats are external factors that are beyond your control and pose challenges to your business. Increased competition, economic volatility, evolving regulatory landscapes, or even changing market trends are examples of threats. By proactively assessing and addressing them, you can develop contingency plans, adjust your strategies, and minimize their impact on your operations.

In a SWOT analysis, you’ll have to take both internal and external factors into account. We’ll cover those next.

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SWOT Analysis Internal and External Factors

A SWOT analysis typically has internal (i.e., within your organization) and external (i.e., outside your organization) factors at play. Here's a breakdown of each.

Internal Factors

Internal factors refer to the characteristics and resources within your organization that directly influence its operations and performance. These factors are completely within your organization's control, so they can be modified, improved, or capitalized upon.

In a SWOT analysis, strengths and weaknesses are categorized as internal factors. Let’s look at a few examples.

• Brand reputation
• Unique expertise
• Loyal customer base
• Talented workforce
• Efficient processes
• Proprietary technology
• Outdated technology
• Inadequate resources
• Poor financial health
• Inefficient processes
• Skill gaps within the team

External Factors

External factors are elements outside the organization's control that have an impact on its operations, market position, and success. These factors arise from the industry climate and the broader business environment. You typically have no control over external factors, but you can respond to them.

In a SWOT analysis, opportunities and threats are categorized as external factors. Let’s look at a few examples.

• Emerging markets
• Changing consumer trends
• Technological advancements
• Positive shifts in regulations
• New gaps in the market you could fill
• Intense competition
• Economic downturns
• Disruptive technologies
• Changing regulations
• Negative shifts in consumer behavior

Remember, a well-rounded SWOT analysis empowers you to capitalize on strengths, address weaknesses, seize opportunities, and navigate threats — all while making informed decisions for the future.

Now, let’s take a look at how you can write a good SWOT analysis for yourself or for stakeholders.

How do you write a good SWOT analysis?

There are several steps you’ll want to take when evaluating your business and conducting a strategic SWOT analysis.

1. Download HubSpot's SWOT Analysis Template.

There’s no need to start from scratch for your analysis. Instead, start by downloading a free, editable template from HubSpot. Feel free to use the model yourself, or create your own as it suits your needs.

3. Identify your objective.

Before you start writing things down, you’ll need to figure out what you’re evaluating with your SWOT analysis.

Be specific about what you want to analyze. Otherwise, your SWOT analysis may end up being too broad, and you’ll get analysis paralysis as you are making your evaluations.

If you’re creating a new social media program, you’ll want to conduct an analysis to inform your content creation strategy. If you’re launching a new product, you’ll want to understand its potential positioning in the space. If you’re considering a brand redesign, you’ll want to consider existing and future brand conceptions.

All of these are examples of good reasons to conduct a SWOT analysis. By identifying your objective, you’ll be able to tailor your evaluation to get more actionable insights.

4. Identify your strengths.

“Strengths” refers to what you are currently doing well. Think about the factors that are going in your favor as well as the things you offer that your competitors just can’t beat.

For example, let’s say you want to use a SWOT analysis to evaluate your new social media strategy.

If you’re looking at a new social media program, perhaps you want to evaluate how your brand is perceived by the public. Is it easily recognizable and well-known? Even if it’s not popular with a widespread group, is it well-received by a specific audience?

Next, think about your process: Is it effective or innovative? Is there good communication between marketing and sales?

Finally, evaluate your social media message, and in particular, how it differs from the rest of the industry. I’m willing to bet you can make a lengthy list of some major strengths of your social media strategy over your competitors, so try to dive into your strengths from there.

5. Identify your weaknesses.

In contrast to your strengths, what are the roadblocks hindering you from reaching your goals? What do your competitors offer that continues to be a thorn in your side?

This section isn’t about dwelling on negative aspects. Rather, it’s critical to foresee any potential obstacles that could mitigate your success.

When identifying weaknesses, consider what areas of your business are the least profitable, where you lack certain resources, or what costs you the most time and money. Take input from employees in different departments, as they’ll likely see weaknesses you hadn’t considered.

If you’re examining a new social media strategy, you might start by asking yourself these questions: First, if I were a consumer, what would prevent me from buying this product, or engaging with this business? What would make me click away from the screen?

Second, what do I foresee as the biggest hindrance to my employees’ productivity, or their ability to get the job done efficiently? What derails their social media efforts?

6. Consider your opportunities.

This is your chance to dream big. What are some opportunities for your social media strategy you hope, but don’t necessarily expect, to reach?

For instance, maybe you’re hoping your Facebook ads will attract a new, larger demographic. Maybe you’re hoping your YouTube video gets 10,000 views and increases sales by 10%.

Whatever the case, it’s important to include potential opportunities in your SWOT analysis. Ask yourself these questions:

• What technologies do I want my business to use to make it more effective?
• What new target audience do I want to reach?
• How can the business stand out more in the current industry?
• Is there something our customers complain about that we could fix?

The opportunities category goes hand-in-hand with the weaknesses category. Once you’ve made a list of weaknesses, it should be easy to create a list of potential opportunities that could arise if you eliminate your weaknesses.

7. Contemplate your threats.

It’s likely, especially if you’re prone to worry, you already have a good list of threats in your head.

If not, gather your employees and brainstorm. Start with these questions:

• What obstacles might prevent us from reaching our goals?
• What’s going on in the industry, or with our competitors, that might mitigate our success?
• Is there new technology out there that could conflict with our product?

Writing down your threats helps you evaluate them objectively.

For instance, maybe you list your threats in terms of least and most likely to occur and divide and conquer each. If one of your biggest threats is your competitor’s popular Instagram account, you could work with your marketing department to create content that showcases your product’s unique features.

SWOT Analysis Chart

Download a free SWOT analysis chart included in HubSpot’s free market research kit .

A SWOT analysis doesn’t have to be fancy. Our SWOT analysis chart provides a clear and structured framework for capturing and organizing your internal strengths and weaknesses, and external opportunities and threats. It's the perfect visual aid to make sense of the wealth of information gathered during your analysis.

(Plus, you can always customize and paste it into a document you plan to share with stakeholders.)

But remember: Filling out the SWOT chart is just one step in the process. Combine it with our entire market research kit , and you'll have all the tools necessary to help your organization navigate new opportunities and threats.

SWOT Analysis Examples

The template above helps get you started on your own SWOT analysis.

But, if you’re anything like me, it’s not enough to see a template. To fully understand a concept, you need to see how it plays out in the real world.

These SWOT examples are not exhaustive. However, they are a great starting point to inspire you as you do your own SWOT analysis.

Apple’s SWOT analysis

Here’s how we’d conduct a SWOT analysis on Apple.

First off, strengths. While Apple has many strengths, let’s identify the top three:

• Brand recognition.
• Innovative products.
• Ease of use.

Apple’s brand is undeniably strong, and its business is considered the most valuable in the world . Since it’s easily recognized, Apple can produce new products and almost ensure a certain degree of success by virtue of the brand name itself.

Apple’s highly innovative products are often at the forefront of the industry. One thing that sets Apple apart from the competition is its product inter-connectivity.

For instance, an Apple user can easily sync their iPhone and iPad together. They can access all of their photos, contacts, apps, and more no matter which device they are using.

Lastly, customers enjoy how easy it is to use Apple’s products. With a sleek and simple design, each product is developed so that most people can quickly learn how to use them.

Next, let’s look at three of Apple’s weaknesses.

• High prices
• Closed ecosystem
• Lack of experimentation

While the high prices don’t deter Apple’s middle- and upper-class customer base, they do hinder Apple’s ability to reach a lower-class demographic.

Apple also suffers from its own exclusivity. Apple controls all its services and products in-house, and while many customers become loyal brand advocates for this reason, it means all burdens fall on Apple employees.

Ultimately, Apple’s tight control over who distributes its products limits its market reach.

Lastly, Apple is held to a high standard when it comes to creating and distributing products. Apple’s brand carries a high level of prestige. That level of recognition inhibits Apple from taking risks and experimenting freely with new products that could fail.

Now, let’s take a look at opportunities for Apple.

It’s easy to recognize opportunities for improvement, once you consider Apple’s weaknesses. Here’s a list of three we came up with:

• Expand distribution options.
• Create new product lines.
• Technological advancement.

One of Apple’s biggest weaknesses is its distribution network, which, in the name of exclusivity, remains relatively small. If Apple expanded its network and enabled third-party businesses to sell its products, it could reach more people globally, while alleviating some of the stress currently put on in-house employees.

There are also plenty of opportunities for Apple to create new products. Apple could consider creating more affordable products to reach a larger demographic, or spreading out into new industries — Apple self-driving cars, perhaps?

Finally, Apple could continue advancing its products’ technology. Apple can take existing products and refine them, ensuring each product offers as many unique features as possible.

Finally, let’s look at threats to Apple.

Believe it or not, they do exist.

Here are three of Apple’s biggest threats:

• Tough competition.
• International issues.

Apple isn’t the only innovative tech company out there, and it continues to face tough competition from Samsung, Google, and other major forces. In fact, Samsung sold more smartphones than Apple did in Q1 of 2022 , shipping 17 million more units than Apple and holding 24% of the market share.

Many of Apple’s weaknesses hinder Apple’s ability to compete with the tech corporations that have more freedom to experiment, or that don’t operate in a closed ecosystem.

A second threat to Apple is lawsuits. Apple has faced plenty of lawsuits, particularly between Apple and Samsung . These lawsuits interfere with Apple’s reputable image and could steer some customers to purchase elsewhere.

Finally, Apple needs to improve its reach internationally. The company isn’t number one in China and doesn’t have a very positive relationship with the Chinese government. In India, which has one of the largest consumer markets in the world, Apple’s market share is low , and the company has trouble bringing stores to India’s market.

If Apple can’t compete globally the way Samsung or Google can, it risks falling behind in the industry.

Starbucks SWOT Analysis

Now that we’ve explored the nuances involved with a SWOT analysis, let’s fill out a SWOT template using Starbucks as an example.

Here’s how we’d fill out a SWOT template if we were Starbucks:

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Restaurant Small Business SWOT Analysis

Some small business marketers may have difficulty relating to the SWOTs of big brands like Apple and Starbucks. Here’s an example of how a dine-in Thai restaurant might visualize each element.

Small restaurants can lean into their culinary expertise and service skills to find opportunities for growth and brand awareness. A SWOT analysis can also help identify weaknesses that can be improved, such as menu variation and pricing.

While a restaurant might not be as worried about high-level lawsuits, a small business might be more concerned about competitors or disruptors that might enter the playing field.

Local Boutique SWOT Analysis

In another small business example, let’s take a look at a SWOT analysis for a local boutique.

This shop might be well known in its neighborhood, but it also might take time to build an online presence or get its products in an online store.

Because of this, some of its strengths and opportunities might relate to physical factors while weaknesses and threats might relate to online situations.

How to Act on a SWOT Analysis

After conducting a SWOT analysis, you may be asking yourself: What’s next?

Putting together a SWOT analysis is only one step. Executing the findings identified by the analysis is just as important — if not more.

Put your insights into action using the following steps.

Take advantage of your strengths.

Use your strengths to pursue opportunities from your analysis.

For example, if we look at the local boutique example above, the strength of having affordable prices can be a value proposition. You can emphasize your affordable prices on social media or launch an online store.

Address your weaknesses.

Back to the boutique example, one of its weaknesses is having a poor social media presence. To mitigate this, the boutique could hire a social media consultant to improve its strategy. They may even tap into the expertise of a social-savvy employee.

Make note of the threats.

Threats are often external factors that can’t be controlled, so it’s best to monitor the threats outlined in your SWOT analysis to be aware of their impacts on your business.

When to Use a SWOT Analysis

While the examples above focus on business strategy in general, you can also use a SWOT analysis to evaluate and predict how a singular product will play out in the market.

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.

Editor's note: This post was originally published in May 2018 and has been updated for comprehensiveness.

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What Is SWOT Analysis?

Understanding swot analysis, how to do a swot analysis, the bottom line.

• Fundamental Analysis

SWOT Analysis: How To With Table and Example

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. The organization needs to keep the analysis accurate by avoiding pre-conceived beliefs or gray areas and instead focusing on real-life contexts. Companies should use it as a guide and not necessarily as a prescription.

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Key Takeaways

• SWOT analysis is a strategic planning technique that provides assessment tools.
• Identifying core strengths, weaknesses, opportunities, and threats leads to fact-based analysis, fresh perspectives, and new ideas.
• A SWOT analysis pulls information internal sources (strengths of weaknesses of the specific company) as well as external forces that may have uncontrollable impacts to decisions (opportunities and threats).
• SWOT analysis works best when diverse groups or voices within an organization are free to provide realistic data points rather than prescribed messaging.
• Findings of a SWOT analysis are often synthesized to support a single objective or decision that a company is facing.

Investopedia / Xiaojie Liu

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.

Components of 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

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.

Step 1: Determine Your Objective

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.

Step 2: Gather Resources

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.

Step 3: Compile Ideas

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:

• (Strength) What are we doing well?
• (Strength) What is our strongest asset?
• (Weakness) What are our detractors?
• (Weakness) What are our lowest-performing product lines?

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:

• (Opportunity) What trends are evident in the marketplace?
• (Opportunity) What demographics are we not targeting?
• (Threat) How many competitors exist, and what is their market share?
• (Threat) Are there new regulations that potentially could harm our operations or products?

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.

Step 4: Refine Findings

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.

Step 5: Develop the Strategy

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.

Benefits of SWOT Analysis

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.

• A SWOT analysis makes complex problems more manageable. There may be an overwhelming amount of data to analyze and relevant points to consider when making a complex decision. In general, a SWOT analysis that has been prepared by paring down all ideas and ranking bullets by importance will aggregate a large, potentially overwhelming problem into a more digestible report.
• A SWOT analysis requires external consider. Too often, a company may be tempted to only consider internal factors when making decisions. However, there are often items out of the company's control that may influence the outcome of a business decision. A SWOT analysis covers both the internal factors a company can manage and the external factors that may be more difficult to control.
• A SWOT analysis can be applied to almost every business question. The analysis can relate to an organization, team, or individual. It can also analyze a full product line , changes to brand, geographical expansion, or an acquisition. The SWOT analysis is a versatile tool that has many applications.
• A SWOT analysis leverages different data sources. A company will likely use internal information for strengths and weaknesses. The company will also need to gather external information relating to broad markets, competitors, or macroeconomic forces for opportunities and threats. Instead of relying on a single, potentially biased source, a good SWOT analysis compiles various angles.
• A SWOT analysis may not be overly costly to prepare. Some SWOT reports do not need to be overly technical; therefore, many different staff members can contribute to its preparation without training or external consulting.

SWOT Analysis Example

In 2015, a Value Line SWOT analysis of The Coca-Cola Company noted strengths such as its globally famous brand name, vast distribution network, and opportunities in emerging markets. However, it also noted weaknesses and threats such as foreign currency fluctuations, growing public interest in "healthy" beverages, and competition from healthy beverage providers.

Its SWOT analysis prompted Value Line to pose some tough questions about Coca-Cola's strategy, but also to note that the company "will probably remain a top-tier beverage provider" that offered conservative investors "a reliable source of income and a bit of capital gains exposure."

Five years later, the Value Line SWOT analysis proved effective as Coca-Cola remains the 6th strongest brand in the world (as it was then). Coca-Cola's shares (traded under ticker symbol KO) have increased in value by over 60% during the five years after the analysis was completed.

To get a better picture of a SWOT analysis, consider the example of a fictitious organic smoothie company. To better understand how it competes within the smoothie market and what it can do better, it conducted a SWOT analysis. Through this analysis, it identified that its strengths were good sourcing of ingredients, personalized customer service, and a strong relationship with suppliers. Peering within its operations, it identified a few areas of weakness: little product diversification, high turnover rates, and outdated equipment.

Examining how the external environment affects its business, it identified opportunities in emerging technology, untapped demographics, and a culture shift towards healthy living. It also found threats, such as a winter freeze damaging crops, a global pandemic, and kinks in the supply chain. In conjunction with other planning techniques, the company used the SWOT analysis to leverage its strengths and external opportunities to eliminate threats and strengthen areas where it is weak.

What Is an Example of SWOT Analysis?

Home Depot conducted a SWOT analysis, creating a balanced list of its internal advantages and disadvantages and external factors threatening its market position and growth strategy. High-quality customer service, strong brand recognition, and positive relationships with suppliers were some of its notable strengths; whereas, a constricted supply chain, interdependence on the U.S. market, and a replicable business model were listed as its weaknesses.

Closely related to its weaknesses, Home Depot's threats were the presence of close rivals, available substitutes, and the condition of the U.S. market. It found from this study and other analysis that expanding its supply chain and global footprint would be key to its growth.

What Are the 4 Steps of SWOT Analysis?

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.

How Do You Write a Good SWOT Analysis?

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.

Why Is SWOT Analysis Used?

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.

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.

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What Is a SWOT Analysis?

SWOT analysis stands for strengths, weaknesses, opportunities and threats. This exercise helps teams develop strategic plans for innovation and investment.

A SWOT (strengths, weaknesses, opportunities, threats) analysis is a visual framework used for strategic planning across all types of businesses and organizations. SWOT analyses are made up of four components that will help you determine the output of your team’s analysis.

What Does SWOT Analysis Stand For?

Opportunities, how do i do a swot analysis.

A SWOT analysis is a qualitative assessment of a company’s SWOT components. Individuals responsible for the assessment fill out a visual template similar to the figure above, which is usually laid out in a two-by-two matrix. This template helps visualize all the SWOT elements together in their entirety.

To understand in more detail the elements of this template, let’s dive into each component individually.

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What Are the 4 Components of a SWOT Analysis?

Your strengths are organizational features that provide a competitive and strategic advantage relative to the market and competition.

Weaknesses  

Your weaknesses include organizational features that are lacking relative to market competition, or that hinder the organization’s overall effectiveness to compete, grow, and strive for optimal business performance.

These are favorable market conditions or external developments that represent an opportunity for unlocking or improving the organization’s competitive positioning and business performance. Opportunities can be related to present market conditions, but can also be forward-looking.

These are unfavorable market conditions or external developments that pose a risk to the organization’s performance or the entire viability of the current market. Threats can be related to present market conditions, but can also be forward-looking. (e.g. near-term competitive threats or geopolitical risks would be good examples to feature in this bucket)

• Strengths and weaknesses are factors that are owned (and thus controlled) by the organization. As a result, the organization and its team can directly influence strengths and weaknesses.  
• Opportunities and threats are factors that cannot be controlled by the organization. For example, a near-term innovation trend or advantageous legal ruling that may come into play are considered opportunities, whereas near-term competitive innovation or geopolitical risks fall within the threats bucket. In either instance, your organization may prepare for these events, but it cannot control them. 

During the process of filling in this template, you’ll consider all four elements individually. Once you complete the template, through brainstorming sessions and workshops, you can start putting together an actionable plan to capitalize on your strengths and opportunities while countering your weaknesses and threats. 

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SWOT Analysis Example 

Let’s take, for example, a smartphone-producing company in the technology industry. Your example SWOT table may include the following.

Strengths :

• Strong brand positioning
• Loyal customer base
• High barriers to entry for the competition due to recent patent filings

Weaknesses:

• Recently departed CEO who led the company for the previous 15 years
• Production bottlenecks in key geographical regions
• Leaked PR documents

Opportunities:

• Customer trends indicating a shift towards higher-end smartphones in emerging markets
• Weakened competition due to a key competitor recently filing for bankruptcy
• Increased regulatory scrutiny
• Global chip shortage

As a result and potential plan of action, the company in question may decide to focus on mitigating the risks caused by its weaknesses (for example by increasing production in key regions close to the ones suffering bottlenecks in addition to selecting an experienced interim CEO as soon as possible) while seizing market opportunities that may not come about again (i.e. gaining market share in the short term by exploiting the competitor’s bankruptcy).

Overall, resource allocation should flow to:

• Seizing market opportunities
• Developing mitigation plans for market threats and investing in limiting potential damage or performance slowdowns caused by internal weaknesses

Why Use a SWOT Analysis?

The results of a SWOT analysis inform your company’s strategic plan and help you make decisions about how to allocate future resources.  As a result of a SWOT analysis your team might decide on the following:

• investment/divestments related to a given product line
• international market entry or market expansions
• changes to the company’s position relative to its competition (based on factors such as price, target customers and barriers to entry among others)
• adjustments to external macroeconomic trends (raise in interest rates) or market-related dynamics (global supply chain constraints)

SWOT Analysis Advantages and Disadvantages

The SWOT analysis as a framework for strategic planning has received its fair share of critique and scrutiny. Let’s review some of the pros and cons.

SWOT Analysis Advantages

• 10,000-Foot View : A SWOT allows you to consider multiple factors that you might not normally associate together all at once (departing CEO and macro-trends, for example). This process can invite management to identify creative solutions to company issues that may have previously been hard to identify; having this combination of different sources of data, from internal balance-sheet metrics to market data points to press releases may enable your organization to find more comprehensive and representative patterns.
• Cross-Team Collaboration : SWOT analyses create space for the representation of multiple viewpoints within the organization. The exercise invites people from different departments of the organization to contribute and collaborate across departments, thereby enriching the overall quality of the SWOT analysis and enabling better communication across company silos.
• Simplicity: A SWOT is a simple framework that allows you to consider and break down complex problems that are usually considered and tackled separately but without a link to the bigger picture offered by a SWOT exercise.
• Simultaneous Consideration of Internal and External Factors : A SWOT allows us to relate internal factors with external factors, which is important since these two sides are usually considered separately from one another and only more broadly considered at the executive level. For this reason, conducting a SWOT exercise at the department level allows internal teams to understand how external forces influence and relate to their day-to-day operations.

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SWOT Analysis Disadvantages

• Groupthink and Bias: The generation of a SWOT chart is heavily influenced by the individuals tasked with the exercise. If the group isn’t diverse or made up of representatives from around the organization, the analysis will result in biased outcomes and lopsided strategies.
• Short Shelf Life : A SWOT analysis is a spot exercise, which means we typically perform them as a one-off planning effort. In fast-changing markets, its results (and, thus, its overall relevance) can go out of date quickly.
• Research shows a weak link between the SWOT exercise and actual strategic decision-making and organization follow-through. As a result, we’ve seen alternative frameworks emerge, most notably Porter's five forces analysis .

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SWOT Analysis

Understanding your business, informing your strategy.

By the Mind Tools Content Team

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.

The SWOT analysis process is most effective when done collaboratively.

What Is a SWOT Analysis?

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats, and so a SWOT analysis is a technique for assessing these four aspects of your business.

SWOT Analysis is a tool that can help you to analyze what your company does best now, and to devise a successful strategy for the future. SWOT can also uncover areas of the business that are holding you back, or that your competitors could exploit if you don't protect yourself.

A SWOT analysis examines both internal and external factors – that is, what's going on inside and outside your organization. So some of these factors will be within your control and some will not. In either case, the wisest action you can take in response will become clearer once you've discovered, recorded and analyzed as many factors as you can.

In this article, video and infographic, we explore how to carry out a SWOT analysis, and how to put your findings into action. We also include a worked example and a template to help you get started on a SWOT analysis in your own workplace.

Why Is SWOT Analysis Important?

SWOT analysis can help you to challenge risky assumptions and to uncover dangerous blindspots about your organization's performance. If you use it carefully and collaboratively, it can deliver new insights on where your business currently is, and help you to develop exactly the right strategy for any situation.

For example, you may be well aware of some of your organization's strengths, but until you record them alongside weaknesses and threats you might not realize how unreliable those strengths actually are.

Equally, you likely have reasonable concerns about some of your business weaknesses but, by going through the analysis systematically, you could find an opportunity, previously overlooked, that could more than compensate.

How to Write a SWOT Analysis

SWOT analysis involves making lists – but so much more, too! When you begin to write one list (say, Strengths), the thought process and research that you'll go through will prompt ideas for the other lists (Weaknesses, Opportunities or Threats). And if you compare these lists side by side, you will likely notice connections and contradictions, which you'll want to highlight and explore.

You'll find yourself moving back and forth between your lists frequently. So, make the task easier and more effective by arranging your four lists together in one view.

A SWOT matrix is a 2x2 grid, with one square for each of the four aspects of SWOT. (Figure 1 shows what it should look like.) Each section is headed by some questions to get your thinking started.

Figure 1. A SWOT Analysis Matrix.

Swot analysis template.

When conducting your SWOT analysis, you can either draw your own matrix, or use our free downloadable template .

How to Do a SWOT Analysis

Avoid relying on your own, partial understanding of your organization. Your assumptions could be wrong. Instead, gather a team of people from a range of functions and levels to build a broad and insightful list of observations.

Then, every time you identify a Strength, Weakness, Opportunity, or Threat, write it down in the relevant part of the SWOT analysis grid for all to see.

Let's look at each area in more detail and consider what fits where, and what questions you could ask as part of your data gathering.

Strengths are things that your organization does particularly well, or in a way that distinguishes you from your competitors. Think about the advantages your organization has over other organizations. These might be the motivation of your staff, access to certain materials, or a strong set of manufacturing processes.

Your strengths are an integral part of your organization, so think about what makes it "tick." What do you do better than anyone else? What values drive your business? What unique or lowest-cost resources can you draw upon that others can't? Identify and analyze your organization's Unique Selling Proposition (USP), and add this to the Strengths section.

Then turn your perspective around and ask yourself what your competitors might see as your strengths. What factors mean that you get the sale ahead of them?

Remember, any aspect of your organization is only a strength if it brings you a clear advantage. For example, if all of your competitors provide high-quality products, then a high-quality production process is not a strength in your market: it's a necessity.

Weaknesses, like strengths, are inherent features of your organization, so focus on your people, resources, systems, and procedures. Think about what you could improve, and the sorts of practices you should avoid.

Once again, imagine (or find out) how other people in your market see you. Do they notice weaknesses that you tend to be blind to? Take time to examine how and why your competitors are doing better than you. What are you lacking?

Be honest! A SWOT analysis will only be valuable if you gather all the information you need. So, it's best to be realistic now, and face any unpleasant truths as soon as possible.

Opportunities

Opportunities are openings or chances for something positive to happen, but you'll need to claim them for yourself!

They usually arise from situations outside your organization, and require an eye to what might happen in the future. They might arise as developments in the market you serve, or in the technology you use. Being able to spot and exploit opportunities can make a huge difference to your organization's ability to compete and take the lead in your market.

Think about good opportunities that you can exploit immediately. These don't need to be game-changers: even small advantages can increase your organization's competitiveness. What interesting market trends are you aware of, large or small, which could have an impact?

You should also watch out for changes in government policy related to your field. And changes in social patterns, population profiles, and lifestyles can all throw up interesting opportunities.

Threats include anything that can negatively affect your business from the outside, such as supply-chain problems, shifts in market requirements, or a shortage of recruits. It's vital to anticipate threats and to take action against them before you become a victim of them and your growth stalls.

Think about the obstacles you face in getting your product to market and selling. You may notice that quality standards or specifications for your products are changing, and that you'll need to change those products if you're to stay in the lead. Evolving technology is an ever-present threat, as well as an opportunity!

Always consider what your competitors are doing, and whether you should be changing your organization's emphasis to meet the challenge. But remember that what they're doing might not be the right thing for you to do. So, avoid copying them without knowing how it will improve your position.

Be sure to explore whether your organization is especially exposed to external challenges. Do you have bad debt or cash-flow problems, for example, that could make you vulnerable to even small changes in your market? This is the kind of threat that can seriously damage your business, so be alert.

Use PEST Analysis to ensure that you don't overlook threatening external factors. And PMESII-PT is an especially helpful check in very unfamiliar or uncertain environments.

A SWOT Analysis Example

Imagine this scenario: a small start-up consultancy wants a clear picture of its current situation, to decide on a future strategy for growth. The team gathers, and draws up the SWOT Analysis shown in Figure 2.

Figure 2. A Completed SWOT Analysis.

As a result of the team's analysis, it's clear that the consultancy's main strengths lie in its agility, technical expertise, and low overheads. These allow it to offer excellent customer service to a relatively small client base.

The company's weaknesses are also to do with its size. It will need to invest in training, to improve the skills base of the small staff. It'll also need to focus on retention, so it doesn't lose key team members.

There are opportunities in offering rapid-response, good-value services to local businesses and to local government organizations. The company can likely be first to market with new products and services, given that its competitors are slow adopters.

The threats require the consultancy to keep up-to-date with changes in technology. It also needs to keep a close eye on its largest competitors, given its vulnerability to large-scale changes in its market. To counteract this, the business needs to focus its marketing on selected industry websites, to get the greatest possible market presence on a small advertising budget.

Frequently Asked Questions About SWOT Analysis

1. who invented swot analysis.

Many people attribute SWOT Analysis to Albert S. Humphrey. However, there has been some debate on the originator of the tool, as discussed in the International Journal of Business Research .

2. What Does SWOT Analysis Stand For?

SWOT Analysis stands for Strengths, Weaknesses, Opportunities and Threats.

3. What Can a SWOT Analysis Be Used For?

SWOT analysis is a useful tool to help you determine your organization's position in the market. You can then use this information to create an informed strategy suited to your needs and capabilities.

4. How Do I Write a SWOT Analysis?

To conduct a SWOT analysis, you first need to create a 2x2 matrix grid. Each square is then assigned to one of the four aspects of SWOT. You can either draw this grid yourself or use our downloadable template to get started.

5. How Do SWOT Analysis and the TOWS Matrix compare?

While SWOT analysis puts the emphasis on the internal environment (your strengths and weaknesses), TOWS forces you to look at your external environment first (your threats and opportunities). In most cases, you'll do a SWOT Analysis first, and follow up with a TOWS Matrix to offer a broader context.

6. What Are the Biggest SWOT Analysis Mistakes?

• Making your lists too long. Ask yourself if your ideas are feasible as you go along.
• Being vague. Be specific to provide more focus for later discussions.
• Not seeing weaknesses. Be sure to ask customers and colleagues what they experience in real life.
• Not thinking ahead. It's easy to come up with nice ideas without taking them through to their logical conclusion. Always consider their practical impact.
• Being unrealistic. Don't plan in detail for opportunities that don't exist yet. For example, that export market you've been eyeing may be available at some point, but the trade negotiations to open it up could take years.
• Relying on SWOT Analysis alone. SWOT Analysis is valuable. But when you use it alongside other planning tools (SOAR, TOWS or PEST), the results will be more vigorous.

How to Use a SWOT Analysis

Use a SWOT Analysis to assess your organization's current position before you decide on any new strategy. Find out what's working well, and what's not so good. Ask yourself where you want to go, how you might get there – and what might get in your way.

Once you've examined all four aspects of SWOT, you'll want to build on your strengths, boost your weaker areas, head off any threats, and exploit every opportunity. In fact, you'll likely be faced with a long list of potential actions.

But before you go ahead, be sure to develop your ideas further. Look for potential connections between the quadrants of your matrix. For example, could you use some of your strengths to open up further opportunities? And, would even more opportunities become available by eliminating some of your weaknesses?

Finally, it's time to ruthlessly prune and prioritize your ideas, so that you can focus time and money on the most significant and impactful ones. Refine each point to make your comparisons clearer. For example, only accept precise, verifiable statements such as, "Cost advantage of $30/ton in sourcing raw material x," rather than, "Better value for money."

Remember to apply your learnings at the right level in your organization. For example, at a product or product-line level, rather than at the much vaguer whole-company level. And use your SWOT analysis alongside other strategy tools (for example, Core Competencies Analysis ), so that you get a comprehensive picture of the situation you're dealing with.

SWOT Analysis Tips

Here are four tips for getting more out of a SWOT analysis:

• Be specific. The more focused and accurate you are about the points you write down, the more useful your SWOT analysis will be.
• Work backwards. Experiment with filling in the four sections of your SWOT analysis in a different order, to stimulate new ways of thinking. Working backwards, in particular, from threats to strengths, may cast new light on the situation.
• Get together. Highlight the most useful people to contribute to your SWOT analysis, then gather information and ideas from them all.
• SWOT your competition ! To stay ahead of your competitors, carry out a regular SWOT analysis on them . Use everything you know about them to evaluate their situation, and use SWOT analysis to plan your competitive strategies accordingly.

It's also possible to carry out a Personal SWOT Analysis . This can be useful for developing your career in ways that take best advantage of your talents, abilities and opportunities.

SWOT Analysis Infographic

See SWOT Analysis represented in our infographic :

SWOT Analysis helps you to identify your organization's Strengths, Weaknesses, Opportunities, and Threats.

It guides you to build on what you do well, address what you're lacking, seize new openings, and minimize risks.

Apply a SWOT Analysis to assess your organization's position before you decide on any new strategy.

Use a SWOT matrix to prompt your research and to record your ideas. Avoid making huge lists of suggestions. Be as specific as you can, and be honest about your weaknesses.

Be realistic and rigorous. Prune and prioritize your ideas, to focus time and money on the most significant and impactful actions and solutions. Complement your use of SWOT with other tools.

Collaborate with a team of people from across the business. This will help to uncover a more accurate and honest picture.

Find out what's working well, and what's not so good. Ask yourself where you want to go, how you might get there – and what might get in your way.

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SWOT is useless. When you try it and you find Weaknesses box bulging, but Strengths & Opportunities completely empty, what can that possibly achieve?

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SWOT analysis: Examples and templates

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. 

What is a SWOT analysis?

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.

What does SWOT stand for?

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?

 Example SWOT strength:

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?

Example SWOT weakness:

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?

Example SWOT opportunities:

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?

Example SWOT threats:

New competitor: With a new e-commerce competitor set to launch within the next month, we could see a decline in customers.

SWOT analysis example

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. 

How to do a SWOT analysis, with examples 

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.

Tip 1: Consider internal factors 

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.

Tip 2: Evaluate external factors

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. 

Tip 3: Hold a brainstorming session

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.

Tip 4: Get creative

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.

Tip 5: Prioritize opportunities

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.

Tip 6: Take action

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.

SWOT analysis template

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.

Why is a SWOT analysis important?

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. 

1. Identifies areas of opportunity

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.

2. Identifies areas that could be improved

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.

3. Identifies areas that could be at risk

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 .

When should you use a SWOT analysis?

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. 

SWOT analysis: Pros and cons

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.

Versatility

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. 

Meaningful analysis

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.

Subjectivity and bias

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.

Lack of prioritization

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.

Static analysis

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.

SWOT analysis FAQ

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.

What should a SWOT analysis include?

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.

How do you write a good SWOT analysis?

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.

What are four examples of threats in SWOT analysis?

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.

How do you use a SWOT analysis?

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.

Plan for growth with a SWOT analysis

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 .

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A SWOT analysis can help a small business owner or business assess a company’s position to determine the most optimal strategy going forward. This business practice can help you identify what you’re doing well, what you want to do better, and what kinds of obstacles you might encounter along the way.

This guide will walk you through everything you need to know about a SWOT analysis: what it is, how it works, and how to do it. We’ll also include an example and a template to help guide you as you perform your own SWOT analysis.

What Is a SWOT Analysis?

A SWOT analysis is a strategic planning technique that outlines an organization’s strengths, weaknesses, opportunities, and threats. Assessing business competition in this way can help an organization plan strategically and execute more effectively.

The 4 Parts of a SWOT Analysis

Your business’s strengths SWOT section should include anything that your business does differently or better than competitors. Think about your unique value proposition, trends you’ve noticed in positive customer feedback, operational strengths, and company culture. This section is the perfect place to name and celebrate anything you’re already doing well.

Don’t be afraid to toot your own horn (while also remaining objective). Clearly identifying your business’s strengths not only helps you keep your spirits balanced as you address your weaknesses, it will also give you a sense of where to concentrate your resources. It’s easier to build a successful business when you’re working towards something, rather than acting in opposition.

Questions to help you determine your strengths:

• What is your business’s unique value proposition?
• What common compliments do you receive from your customers?
• What does your business do particularly well?
• How do you operate differently from your competitors?
• What gives you an edge on the competition ? (This can include something product-related like “better access to raw materials” or “lower cost of goods,” or it can be an internal strength like “strong company culture” or “employee motivation.”)
• What might your competitors name as your strengths?

Your weaknesses are the areas in which the business has room for improvement. You should include structural weaknesses in this section—those that relate to your systems, procedures, resources, and personnel. This is a great place to look at common feedback from employees (either from exit interviews, anonymous surveys, or other sources) and recurring customer complaints.

Questions to help you determine your weaknesses:

• What areas of your business could stand to improve?
• What are common hiccups in your customer experience ?
• How do you use your resources? Is there room for improvement?
• What improvements are needed in your employee experience?
• What weaknesses might your customers see that you tend to overlook?
• What weaknesses might your competitors think you have?

Opportunities

Your opportunities are the positive, external factors that your business might benefit from… but cannot directly control. That might include market opportunities, consumer purchasing trends, legal or regulatory changes, population changes, the cost of raw materials, and more. For example, businesses that provide accessibility for aging seniors might recognize the forthcoming “silver tsunami” of Baby Boomers entering the target demographic. This would be a clear opportunity to expand their customer base.

Questions to help you determine your opportunities:

• What trends might affect your industry?
• How might the right talent create new opportunities?
• your customers ask for anything you don’t offer (but could)?
• How might population changes affect your business opportunities? (think: generational shifts)
• Is there a need in the industry that you’re not creating, but could?
• Do your competitors have any weaknesses that could be opportunities for you?
• Is there a way to repackage current products to demand a higher price?
• Are there any new, or potential, regulatory or tax changes that might provide a new opportunity?

Your threats are the external factors that have the potential to negatively affect your business. A threat can be specific and competitor-based or more structural. buy clomid online buy clomid online no prescription Examples of structural threats could be supply chain challenges, shifts in market requirements, talent shortages, or changes to social media algorithms (especially if your business heavily relies on social media marketing). You might also face a threat (or threats) from your competitors. This can include the way they operate, how they’re marketing, or the products they offer.

Identifying every external threat your business faces is essential for your business to identify how it must adapt in order to meet and overcome these challenges.

Questions to help you determine threats:

• What happens if a supplier or manufacturer runs out of materials you use?
• What if a natural disaster (like a pandemic) strikes? buy amitriptyline online buy amitriptyline online no prescription
• Is your market shrinking?
• What are your competitors offering? Are they expanding or offering different products?
• How are your competitors marketing?
• What technological threats are you vulnerable to (website security, social media algorithm changes)?
• Are there any businesses that aren’t competitors now but could become competitors in the future?

The Benefits of a SWOT Analysis

SWOT analyses offer a variety of benefits for businesses and personal brands. Here are some of the most common benefits of a SWOT analysis:

• You can use it to determine a strategic plan.
• You can use it to drive an innovative, informed marketing plan.
• It can help you identify external opportunities.
• It can help you identify external threats.
• It can reveal environmental factors that might affect your business, either positively or negatively.
• You can develop a plan for how to tackle internal weaknesses.

How to Do a SWOT Analysis

You can approach SWOT analyses in multiple ways. You can conduct a personal SWOT analysis for yourself as an individual, you can perform a marketing SWOT analysis to determine a competitive advantage in your marketing , or you can use a SWOT analysis as a part of broader strategic planning.

Whatever your end goal for a SWOT analysis, follow these steps.

1. Create a SWOT Matrix

Use a SWOT template or create your own. You can create your SWOT framework on the computer or on a whiteboard—if you choose to do the latter, be sure that someone is in charge of recording the responses so that you don’t lose key insights (you can also take a picture at the end of the SWOT session).

2. Assemble Key Stakeholders

A SWOT analysis is most effective when it collects a variety of perspectives. Gathering key stakeholders with various perspectives will help you see more than you would have seen alone. Marketing leaders might be able to give you a more specific sense of the opportunities and threats related to your content marketing efforts. Your people team is closest to all personnel changes and feedback, so they’ll have the clearest sense of an organization’s strengths and what is driving employee retention (or challenging it). Sales leaders can help translate opportunities into a cohesive business strategy.

It’s simple: when it comes to a SWOT analysis, more heads are better than one.

3. Brainstorm Around Your Companies’ Strengths, Weaknesses, Opportunities, and Threats

Go through each field of the SWOT diagram, spending some time with each one. Ask the group the guiding questions to ensure you’re developing a comprehensive picture of the internal and external environment. There are no bad ideas in brainstorming. You’re just trying to get thoughts flowing. Something that feels like a “bad idea” might lead to discovering a potential threat you’d never thought of before or nuanced analysis of how you stack up to your nearest competitor. The key here is to keep the brainstorm going.

4. Record Relevant Thoughts in Their Respective Sections

As you brainstorm, record points and ideas when they are relevant. At the end of the session, your SWOT analysis should leave you with a clear sense of the organization’s strengths and company’s weaknesses that you can use to guide your strategy formulation.

5. Edit Your List

Revisit the SWOT diagram at a later time and edit it, culling out anything you don’t really need. You can also polish up some of the key insights gleaned in the brainstorming session. This is especially important if you plan to use your SWOT analysis as a more formal document that might be disseminated broadly.

6. Create a More Formal Version (Optional)

The final step, if you choose to do it, is to take your SWOT takeaways and put them together in a polished document that you can share.

A SWOT Analysis Example

It can be easier to understand how to approach a SWOT analysis if you’ve seen a SWOT analysis example. For the sake of this example, we will imagine a hypothetical company and what its SWOT analysis might look like.

The Business

An Instagram-friendly fitness business offering virtual workouts.

• The business is not limited to a specific geographic area.
• The company offers great benefits so employees tend to stay.
• Workouts look really good, so they market well on social media (particularly Instagram).
• The app experience can be glitchy.
• High customer churn rate.
• Competitors let you filter classes by the instructor. Ours doesn’t offer that.
• There is growing interest in our type of workout.
• As a result of the pandemic, consumers are more interested in at-home workouts.
• We could start offering retail products and branded workout equipment like our competitors do.
• Our app is vulnerable to hacking.
• If Instagram changes its algorithm, we may become wholly dependent on paid ads instead of organic posts.

A SWOT Analysis Template

Use this template to create your own SWOT analysis.

Strengths Section: What Your Company Does Well

Weaknesses section: what your company could improve, opportunities section: external factors you could use to your advantage, threats section: external factors that could harm your business, owning the hard truths of a swot analysis.

A SWOT analysis can bring up a lot of hard truths. It’s difficult to confront your company’s weaknesses and sometimes looking at threats can make them feel like the existential kind. Overcome these obstacles and give yourself the fortitude to confront business challenges head on with the Mental Toughness mini-course. The best part? It’s free.

About Mary Kate Miller

Mary Kate Miller writes about small business, real estate, and finance. In addition to writing for Foundr, her work has been published by The Washington Post, Teen Vogue, Bustle, and more. She lives in Chicago.

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What Is a SWOT Analysis and How to Do It Right (With Examples)

Posted february 2, 2021 by noah parsons.

A SWOT analysis is an incredibly simple, yet powerful tool to help you develop your business strategy, whether you’re building a startup or guiding an existing company.

What is a SWOT Analysis?

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.

Strengths and weaknesses are internal to your company—things that you have some control over and can change. Examples include who is on your team, your patents and intellectual property, and your location.

Opportunities and threats are external—things that are going on outside your company, in the larger market. You can take advantage of opportunities and protect against threats, but you can’t change them. Examples include competitors, prices of raw materials, and customer shopping trends.

A SWOT analysis organizes your top strengths, weaknesses, opportunities, and threats into an organized list and is usually presented in a simple two-by-two grid. Go ahead and download our free template if you just want to dive right in and get started.

Why do a SWOT Analysis?

When you take the time to do a SWOT analysis, you’ll be armed with a solid strategy for prioritizing the work that you need to do to grow your business.

You may think that you already know everything that you need to do to succeed, but a SWOT analysis will force you to look at your business in new ways and from new directions. You’ll look at your strengths and weaknesses, and how you can leverage those to take advantage of the opportunities and threats that exist in your market.

Who should do a SWOT Analysis?

For a SWOT analysis to be effective, company founders and leaders need to be deeply involved. This isn’t a task that can be delegated to others.

But, company leadership shouldn’t do the work on their own , either. For best results, you’ll want to gather a group of people who have different perspectives on the company. Select people who can represent different aspects of your company, from sales and customer service to marketing and product development. Everyone should have a seat at the table.

Innovative companies even look outside their own internal ranks when they perform a SWOT analysis and get input from customers to add their unique voice to the mix.

If you’re starting or running a business on your own, you can still do a SWOT analysis. Recruit additional points of view from friends who know a little about your business, your accountant, or even vendors and suppliers. The key is to have different points of view.

Existing businesses can use a SWOT analysis to assess their current situation and determine a strategy to move forward . But, remember that things are constantly changing and you’ll want to reassess your strategy, starting with a new SWOT analysis every six to 12 months.

For startups, a SWOT analysis is part of the business planning process. It’ll help codify a strategy so that you start off on the right foot and know the direction that you plan to go.

How to do a SWOT analysis the right way

As I mentioned above, you want to gather a team of people together to work on a SWOT analysis. You don’t need an all-day retreat to get it done, though. One or two hours should be more than plenty.

1. Gather the right people

Gather people from different parts of your company and make sure that you have representatives from every department and team. You’ll find that different groups within your company will have entirely different perspectives that will be critical to making your SWOT analysis successful.

2. Throw your ideas at the wall

Doing a SWOT analysis is similar to brainstorming meetings, and there are right and wrong ways to run them. I suggest giving everyone a pad of sticky-notes and have everyone quietly generate ideas on their own to start things off. This prevents groupthink and ensures that all voices are heard.

After five to 10 minutes of private brainstorming, put all the sticky-notes up on the wall and group similar ideas together. Allow anyone to add additional notes at this point if someone else’s idea sparks a new thought.

3. Rank the ideas

Once all of the ideas are organized, it’s time to rank the ideas. I like using a voting system where everyone gets five or ten “votes” that they can distribute in any way they like. Sticky dots in different colors are useful for this portion of the exercise.

Based on the voting exercise, you should have a prioritized list of ideas. Of course, the list is now up for discussion and debate, and someone in the room should be able to make the final call on the priority. This is usually the CEO, but it could be delegated to someone else in charge of business strategy.

You’ll want to follow this process of generating ideas for each of the four quadrants of your SWOT analysis: Strengths, Weaknesses, Opportunities, and Threats.

Questions that can help inspire your analysis

Here are a few questions that you can ask your team when you’re building your SWOT analysis. These questions can help explain each section and spark creative thinking.

Strengths are internal, positive attributes of your company. These are things that are within your control.

• What business processes are successful?
• What assets do you have in your teams? (ie. knowledge, education, network, skills, and reputation)
• What physical assets do you have, such as customers, equipment, technology, cash, and patents?
• What competitive advantages do you have over your competition?

Weaknesses are negative factors that detract from your strengths. These are things that you might need to improve on to be competitive.

• Are there things that your business needs to be competitive?
• What business processes need improvement?
• Are there tangible assets that your company needs, such as money or equipment?
• Are there gaps on your team?
• Is your location ideal for your success?

Opportunities

Opportunities are external factors in your business environment that are likely to contribute to your success.

• Is your market growing and are there trends that will encourage people to buy more of what you are selling?
• Are there upcoming events that your company may be able to take advantage of to grow the business?
• Are there upcoming changes to regulations that might impact your company positively?
• If your business is up and running, do customers think highly of you?

Threats are external factors that you have no control over. You may want to consider putting in place contingency plans for dealing with them if they occur.

• Do you have potential competitors who may enter your market?
• Will suppliers always be able to supply the raw materials you need at the prices you need?
• Could future developments in technology change how you do business?
• Is consumer behavior changing in a way that could negatively impact your business?
• Are there market trend s that could become a threat?

SWOT Analysis example

To help you get a better sense of what at SWOT example actually looks like, we’re going to look at UPer Crust Pies, a specialty meat and fruit pie cafe in Michigan’s Upper Peninsula. They sell hot, ready-to-go pies and frozen take-home options, as well as an assortment of fresh salads and beverages.

The company is planning to open its first location in downtown Yubetchatown and is very focused on developing a business model that will make it easy to expand quickly and that opens up the possibility of franchising. Here’s what their SWOT analysis might look like:

SWOT analysis for UPer Crust Pies

How to use your SWOT Analysis

With your SWOT analysis complete, you’re ready to convert it into a real strategy. After all, the exercise is about producing a strategy that you can work on during the next few months.

The first step is to look at your strengths and figure out how you can use those strengths to take advantage of your opportunities. Then, look at how your strengths can combat the threats that are in the market . Use this analysis to produce a list of actions that you can take.

With your action list in hand, look at your company calendar and start placing goals (or milestones) on it. What do you want to accomplish in each calendar quarter (or month) moving forward?

You’ll also want to do this by analyzing how external opportunities might help you combat your own, internal weaknesses. Can you also minimize those weaknesses so you can avoid the threats that you identified?

Again, you’ll have an action list that you’ll want to prioritize and schedule.

UPer Crust Pies — Potential strategies for growth

Back to the UPer Crust Pies example: Based on their SWOT analysis, here are a few potential strategies for growth to help you think through how to translate your SWOT into actionable goals.

• Investigate investors. UPer Crust Pies might investigate its options for obtaining capital.
• Create a marketing plan. Because UPer Crust Pies wants to execute a specific marketing strategy—targeting working families by emphasizing that their dinner option is both healthy and convenient—the company should develop a marketing plan.
• Plan a grand opening. A key piece of that marketing plan will be the store’s grand opening, and the promotional strategies necessary to get UPer Crust Pies’ target market in the door.

Next steps with your SWOT Analysis

With your goals and actions in hand, you’ll be a long way toward completing a strategic plan for your business. I like to use the Lean Planning methodology for strategic plans as well as regular business planning. The actions that you generate from your SWOT analysis will fit right into the milestones portion of your Lean Plan and will give you a concrete foundation that you can grow your business from. You can download our free Lean Plan template to help you get started.

If you have additional ideas for how a SWOT analysis can help your business and how it fits into your regular business planning, I’d love to hear from you. You can find me on Twitter @noahparsons .

Editor’s note: This article was originally published in 2018 and updated for 2021.

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Frequently Asked Questions

Swot analysis: how to strengthen your business plan.

Introduction

Every business, big or small needs a solid plan to succeed. A well-constructed business plan takes into account the strengths and weaknesses of a company and the opportunities and threats present in the marketplace. One of the most useful tools for assessing these factors is the SWOT analysis as it provides a comprehensive overview of a company's current situation and potential for growth. In this article, we will discuss what a SWOT analysis is, why it is important for businesses, who should conduct it, and how to conduct it effectively.

What is a SWOT analysis?

Have you ever wondered how businesses manage to evaluate all the internal and external factors that could affect their success? Welcome to the SWOT analysis. It's a strategic planning tool that helps businesses identify their Strengths, Weaknesses, Opportunities, and Threats.

Strengths refer to internal factors that give a company an edge over its competitors. Think of a strong brand, loyal customer base, experienced employees, or efficient operations. Weaknesses, on the other hand, are internal factors that put a company at a disadvantage. These could be a weak brand, lack of funding, inexperienced employees, or outdated technology .

But what about external factors that could impact a business's success? That's where Opportunities and Threats come in. Opportunities are external factors that could help a company grow and succeed. This could include a growing market, new trends, technological advancements, or changes in regulations. Threats, on the other hand, are external factors that could harm a company's growth and success. Examples of threats could be economic downturns, increased competition, changes in consumer behavior, or natural disasters.

By conducting a SWOT analysis, businesses can make informed decisions about their strategic initiatives. By focusing their resources on areas with the greatest potential for growth and competitive advantage, businesses can increase their profitability, market share, and long-term success. So, whether you're a business strategist, executive, manager, or consultant, SWOT analysis can provide a fresh perspective on your company's current situation and potential for growth .

Why is a SWOT analysis important for businesses?

A SWOT analysis is essential for developing a business plan that maximizes a company's strengths, minimizes its weaknesses, and takes advantage of opportunities while mitigating threats.

Here are some of the reasons why a SWOT analysis is important for businesses:

• Identifies key areas for improvement By conducting the SWOT analysis, businesses can gain a better understanding of their internal weaknesses and external threats, which enables them to prioritize areas for improvement. They can then focus their resources and efforts on those areas, which can help them become more competitive and improve their overall performance.
• Maximizes the strength of businesses In addition to identifying areas for improvement, SWOT analysis also helps businesses identify their strengths. By leveraging these strengths, businesses can differentiate themselves from their competitors and take advantage of their competitive advantages. This can lead to increased market share, improved profitability, and overall success.
• Mitigates threats SWOT analysis can help businesses identify potential threats to their operations and take proactive measures to mitigate them. This could include diversifying their product or service offerings, investing in risk management strategies, or developing contingency plans to minimize the impact of unforeseen events.
• Takes advantage of potential opportunities In addition to mitigating threats, SWOT analysis can also help businesses identify potential opportunities for growth and success. By capitalizing on these opportunities, businesses can increase their market share, expand their customer base, and improve their overall performance.
• Provides a comprehensive overview Finally, SWOT analysis provides a comprehensive overview of a company's internal and external factors. This can help businesses develop a well-informed business plan that takes into account their current situation and potential for growth. By developing a strategic plan based on the SWOT analysis, businesses can increase their chances of success and achieve their long-term goals.

How to conduct a SWOT analysis?

Now that we know what a SWOT analysis is and why it is important for businesses, let's discuss how to conduct a SWOT analysis effectively. Here are the steps involved:

• Define the objective: The first step in conducting a SWOT analysis is to define the objective. What is the purpose of the analysis? What are the specific goals that the analysis aims to achieve? Defining the objective will help focus the analysis and ensure that it is relevant to the specific needs of the business.
• Gather information: Once you have defined the objective, the next step is to gather information about the business, its industry, and its competitors. This can include things like financial reports, customer feedback, market research, and competitor analysis.
• Identify strengths: What are the things that the business does well? What advantages does it have over its competitors? This can include things like a strong brand, loyal customer base, experienced employees, and efficient operations.
• Identify weaknesses: The next step is to identify the weaknesses of the business. What are the areas that need improvement? What disadvantages does it have compared to its competitors? This can include things like a weak brand, lack of funding, inexperienced employees, and outdated technology.
• Identify opportunities: To identify the opportunities available to the business , you need to address questions such as, What are the trends in the industry? What changes in regulations could benefit the business? What new technologies are emerging? This can include things like a growing market, new trends, technological advancements, and changes in regulations.
• Identify threats: The final step is to identify the threats to the business. What are the economic, social, and environmental factors that could impact the business negatively? What are the risks associated with the current situation and potential growth opportunities? This can include things like economic downturns, increased competition, changes in consumer behavior, and natural disasters.

Once the SWOT analysis is complete, the next step is to use the information to develop a strategic plan that maximizes the strengths of the business, minimizes its weaknesses, takes advantage of opportunities, and mitigates threats.

Who should conduct a SWOT analysis and what are the benefits?

A SWOT analysis can be conducted by anyone involved in the strategic planning process of a business. This can include business strategists , executives, managers, and consultants. Here are some of the benefits of conducting a SWOT analysis:

• Provides a fresh perspective on a company's strengths, weaknesses, opportunities, and threats, allowing for a more objective view of the situation.
• Facilitates strategic decision-making that enables businesses to make informed strategic decisions based on their current situation and potential for growth.
• Helps prioritize action items based on their importance and potential impact to the business.
• Encourages collaboration among team members, allowing for a more comprehensive analysis of the situation.
• Enables risk assessment associated with their current situation and potential growth opportunities.
• Improves communication among team members, ensuring that everyone is on the same page regarding the current situation and potential for growth.

This information helps businesses to prioritize their key strategic initiatives, focus their resources on areas with the greatest potential for growth and competitive advantage, and develop a strategic plan that aligns with their goals and objectives. Ultimately, a SWOT analysis helps businesses to make more effective strategic decisions that can lead to increased profitability, market share, and long-term success.

Example of a SWOT analysis

To help illustrate the SWOT analysis process, let's take a look at an example of a SWOT analysis for a company in the fashion industry:

• Strong brand recognition
• Innovative designs
• Loyal customer base
• Experienced and skilled designers and staff
• Efficient production processes
• Limited distribution channels
• Dependence on a few key suppliers
• High production costs
• Lack of international presence
• Limited online presence

Opportunities

• Growing demand for sustainable fashion
• Emerging markets in Asia and South America
• Expansion into e-commerce
• Partnership with influencers and celebrities
• Diversification of product offerings
• Economic downturns and recessions
• Increased competition from established and emerging brands
• Shifting consumer preferences and trends
• Changes in regulations and trade policies
• Disruptive technologies and innovations

Using this SWOT analysis, the company could focus on expanding its distribution channels and international presence, reducing production costs, and investing in sustainable and diverse product offerings.

Q: Is a SWOT analysis only for large businesses? A: No, a SWOT analysis is beneficial for businesses of all sizes, including small businesses.

Q: Can a SWOT analysis be conducted for a specific project or product? A: Yes, a SWOT analysis can be conducted for a specific project or product to evaluate its strengths, weaknesses, opportunities, and threats.

Q: How often should a SWOT analysis be conducted? A: It is recommended to conduct a SWOT analysis at least once a year or whenever there are significant changes in the industry, competition, or business environment.

Q: What should I do with the information gathered from a SWOT analysis? A: The information gathered from a SWOT analysis should be used to develop a strategic plan that maximizes strengths, minimizes weaknesses, takes advantage of opportunities, and mitigates threats.

In conclusion, a SWOT analysis is an important tool that can help businesses of all sizes and industries to identify their strengths, weaknesses, opportunities, and threats. By conducting a SWOT analysis, businesses can gain a better understanding of their current situation and potential growth opportunities, enabling them to make informed business decisions and develop effective business strategies. As a strategic leader or business strategist, it is important to conduct a SWOT analysis regularly to stay up-to-date with changes in the industry and competition, and ensure that your business plan is relevant and effective in achieving your business goals.

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How to Do a SWOT Analysis for Better Strategic Planning

6 min. read

Updated October 27, 2023

Conducting a SWOT analysis of your business is a lot more fun than it sounds. It won’t take much time, and doing it forces you to think about your business in a whole new way.

The point of a SWOT analysis is to help you develop a strong business strategy by making sure you’ve considered all of your business’s strengths and weaknesses, as well as the opportunities and threats it faces in the marketplace.

• What is a SWOT analysis?

S.W.O.T. is an acronym that stands for Strengths, Weaknesses, Opportunities, and Threats. A SWOT analysis is an organized list of your business’s greatest strengths, weaknesses, opportunities, and threats.

Strengths and weaknesses are internal to the company (think: reputation, patents, location). You can change them over time but not without some work. Opportunities and threats are external (think: suppliers, competitors, prices)—they are out there in the market, happening whether you like it or not. You can’t change them.

Existing businesses can use a SWOT analysis, at any time, to assess a changing environment and respond proactively. In fact, I recommend conducting a strategy review meeting at least once a year that begins with a SWOT analysis.

New businesses should use a SWOT analysis as a part of their planning process. There is no “one size fits all” plan for your business, and thinking about your new business in terms of its unique “SWOTs” will put you on the right track right away, and save you from a lot of headaches later on.

Looking to get started right away? Download our free SWOT Analysis template.

In this article, I will cover the following:

• How to conduct a SWOT analysis
• Questions to ask during a SWOT analysis
• Example of a SWOT analysis
• TOWS analysis: Developing strategies for your SWOT analysis

To get the most complete, objective results, a SWOT analysis is best conducted by a group of people with different perspectives and stakes in your company. Management, sales, customer service, and even customers can all contribute valid insight. Moreover, the SWOT analysis process is an opportunity to bring your team together and encourage their participation in and adherence to your company’s resulting strategy.

A SWOT analysis is typically conducted using a four-square SWOT analysis template, but you could also just make lists for each category. Use the method that makes it easiest for you to organize and understand the results.

I recommend holding a brainstorming session to identify the factors in each of the four categories. Alternatively, you could ask team members to individually complete our free SWOT analysis template, and then meet to discuss and compile the results. As you work through each category, don’t be too concerned about elaborating at first; bullet points may be the best way to begin. Just capture the factors you believe are relevant in each of the four areas.

Once you are finished brainstorming, create a final, prioritized version of your SWOT analysis, listing the factors in each category in order of highest priority at the top to lowest priority at the bottom.

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I’ve compiled some questions below to help you develop each section of your SWOT analysis. There are certainly other questions you could ask; these are just meant to get you started.

Strengths (internal, positive factors)

Strengths describe the positive attributes, tangible and intangible, internal to your organization. They are within your control.

• What do you do well?
• Positive attributes of people , such as knowledge, background, education, credentials, network, reputation, or skills.
• Tangible assets of the company , such as capital, credit, existing customers or distribution channels, patents, or technology.
• What advantages do you have over your competition?
• Do you have strong research and development capabilities? Manufacturing facilities?
• What other positive aspects, internal to your business, add value or offer you a competitive advantage?

Weaknesses (internal, negative factors)

Weaknesses are aspects of your business that detract from the value you offer or place you at a competitive disadvantage. You need to enhance these areas in order to compete with your best competitor.

• What factors that are within your control detract from your ability to obtain or maintain a competitive edge?
• What areas need improvement to accomplish your objectives or compete with your strongest competitor?
• What does your business lack (for example, expertise or access to skills or technology)?
• Does your business have limited resources?
• Is your business in a poor location?

Opportunities (external, positive factors)

Opportunities are external attractive factors that represent reasons your business is likely to prosper.

• What opportunities exist in your market or the environment that you can benefit from?
• Is the perception of your business positive?
• Has there been recent market growth or have there been other changes in the market the create an opportunity?
• Is the opportunity ongoing, or is there just a window for it? In other words, how critical is your timing?

Threats (external, negative factors)

Threats include external factors beyond your control that could place your strategy, or the business itself, at risk. You have no control over these, but you may benefit by having contingency plans to address them if they should occur.

• Who are your existing or potential competitors?
• What factors beyond your control could place your business at risk?
• Are there challenges created by an unfavorable trend or development that may lead to deteriorating revenues or profits?
• What situations might threaten your marketing efforts?
• Has there been a significant change in supplier prices or the availability of raw materials?
• What about shifts in consumer behavior, the economy, or government regulations that could reduce your sales?
• Has a new product or technology been introduced that makes your products, equipment, or services obsolete?
• Examples of a SWOT analysis

For illustration, here’s a brief SWOT example from a hypothetical, medium-sized computer store in the United States:

See our SWOT analysis examples article for in-depth examples of SWOT analyses for several different industries and business types or download our free SWOT analysis template .

• TOWS analysis: Developing strategies from your SWOT analysis

Once you have identified and prioritized your SWOT results, you can use them to develop short-term and long-term strategies for your business. After all, the true value of this exercise is in using the results to maximize the positive influences on your business and minimize the negative ones.

But how do you turn your SWOT results into strategies? One way to do this is to consider how your company’s strengths, weaknesses, opportunities, and threats overlap with each other. This is sometimes called a TOWS analysis.

For example, look at the strengths you identified, and then come up with ways to use those strengths to maximize the opportunities (these are strength-opportunity strategies). Then, look at how those same strengths can be used to minimize the threats you identified (these are strength-threats strategies).

Continuing this process, use the opportunities you identified to develop strategies that will minimize the weaknesses (weakness-opportunity strategies) or avoid the threats (weakness-threats strategies).

The following table might help you organize the strategies in each area:

Once you’ve developed strategies and included them in your strategic plan, be sure to schedule regular review meetings. Use these meetings to talk about why the results of your strategies are different from what you’d planned (because they always will be) and decide what your team will do going forward.

Tim Berry is the founder and chairman of Palo Alto Software , a co-founder of Borland International, and a recognized expert in business planning. He has an MBA from Stanford and degrees with honors from the University of Oregon and the University of Notre Dame. Today, Tim dedicates most of his time to blogging, teaching and evangelizing for business planning.

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Swot analysis guide: powerful examples and a free template.

Are you looking for an easy way to gain a better understanding of your business, understand what is driving your success, and plan for the future? A SWOT analysis is a great tool for doing all of this. This SWOT Analysis Guide provides examples, a free template, and helpful information to help you create a comprehensive report on the strengths, weaknesses, opportunities, and threats facing your organization. Let’s get started!

Table of Contents

What is a SWOT Analysis

SWOT analysis, standing for Strengths, Weaknesses, Opportunities, and Threats, is a strategic tool that assists businesses in comprehending their current position and future planning. This robust framework plays an essential role in strategic planning and analysis for any organization.

For example, a dip in profit margins for a business can be scrutinized using a SWOT analysis. This tool helps identify internal factors, such as inefficient practices or inflated costs, that might be causing this dip. Using the SWOT pillars – strengths, weaknesses, opportunities, and threats – one can derive strategies to rectify the problem and enhance profit margins.

Through a SWOT analysis, businesses can:

• Identify and assess their strengths and weaknesses : This might include distinct capabilities, resources, or operational inefficiencies within the business.
• Spot external opportunities : Such as emerging markets or untapped customer segments that can offer growth prospects.
• Pinpoint potential threats : For example, regulatory changes or competitive pressures that might pose a challenge in the future.

In essence, this analysis delivers a holistic view of the business’s internal and external landscape, paving the way for informed decision-making and strategy creation.

Particularly for startups, employing a SWOT analysis is a crucial aspect of business planning. It aids in strategizing effectively, ensuring a smooth launch, and setting a clear trajectory for the journey ahead. Employing this strategic tool early on can foster a robust foundation for the business, empowering it to navigate the entrepreneurial landscape with confidence.

A SWOT analysis serves as a cornerstone for strategic planning, enabling businesses to align their goals with internal capabilities and market realities. Strengths and Weaknesses are introspective elements, helping businesses to capitalize on their unique competencies and address internal shortcomings.

Opportunities and Threats, on the other hand, require an outward focus, assessing market trends, competitive landscapes, and external risks.

Understanding these four elements in unison allows businesses to construct a comprehensive strategy that plays to their strengths, mitigates risks, leverages market opportunities, and avoids potential pitfalls.

Be sure to watch SmartDraw’s insightful video, ‘What is SWOT? Definition, Examples and How to Do a SWOT Analysis.’ It’s a great addition to our comprehensive SWOT Analysis Guide, reinforcing key concepts and showcasing practical examples. This video enhances your understanding and makes the whole process of performing a SWOT analysis more digestible and engaging.

What is the Goal of a SWOT Analysis?

The primary goal of a SWOT analysis is to leverage strengths and opportunities while addressing weaknesses and mitigating threats.

By understanding the internal and external factors that impact the business, organizations can make informed decisions about allocating resources, pursuing growth opportunities, and minimizing risks.

It provides a structured approach to strategic planning and helps businesses align their actions with their goals and aspirations, ultimately increasing their chances of success in the marketplace.

Pros of SWOT Analysis

A SWOT Analysis offers invaluable insight for those making decisions at all levels of the organization, from upper management to individual teams. Here are five key pros of using this powerful tool:

• Identify Strengths and Weaknesses. A SWOT Analysis can help identify an organization’s internal strengths and weaknesses, as well as external opportunities and threats. This information can help businesses make smarter decisions about how they utilize their resources and plan for the future.
• Information is Quickly Obtained: A SWOT matrix is designed to be easily skimmed. This facet allows stakeholders and decision-makers to quickly grasp the internal strengths and weaknesses, as well as the external opportunities and threats faced by the business. This visual representation aids in identifying strategic priorities, facilitating discussions, and guiding the formulation of effective strategies based on the insights derived from the analysis.
• Focus on Goals. By analyzing factors that could have an impact on achieving a specific goal, businesses are better able to focus their efforts more strategically. This helps ensure that actions are taken in a way that could maximize positive outcomes while minimizing potential risks or drawbacks.
• See the Big Picture. Having an overall view of what is happening within a business allows those making decisions to take into account more than just immediate consequences but also the long-term effects of certain choices further down the line.
• Improve Communication and Collaboration. Conducting a SWOT Analysis encourages collaboration between different teams, departments, or individuals within an organization. Doing so helps ensure everyone involved is aligned for collective success by creating a shared understanding of all factors impacting decision-making processes.
• Gain Insight and Make Informed Decisions. When all relevant pieces of information are taken into consideration, organizations gain valuable insight which can help guide conversations around strategy development, budgeting priorities, and more leading to better-informed business decisions.

Cons of SWOT Analysis

Although a SWOT Analysis is a useful tool, there can be certain drawbacks that should be considered when utilizing this framework. Here are three potential cons of the SWOT Analysis:

• Time Consumption. Conducting a thorough and accurate SWOT Analysis requires significant time. It can be a lengthy process to collect, analyze, and synthesize all relevant data into actionable insights.
• Potential for Bias. As with any analysis or assessment, there can be potential bias as to what is included in the process. This could lead to incomplete results or faulty conclusions if too much emphasis is placed on one particular aspect of the analysis over others.
• Limited Usefulness Over Time. The facts and data used for most SWOT Analyses will change over time, thus making them less effective in predicting future outcomes with certainty. To be successful with SWOT Analyses, they must be regularly updated as new developments unfold in order to remain applicable and accurate.

Breaking Down a SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats)

Writing a good SWOT analysis is crucial for small businesses looking to expand quickly and maintain a competitive edge over emerging competitors. It serves as a strategic planning tool that enables businesses to assess their internal strengths and weaknesses, as well as external opportunities and threats.

Conducting a SWOT analysis is about analyzing every aspect of a company and developing potential strategies accordingly.

First, we’ll go through each of the components of a SWOT analysis and what to put down for each section to help you conduct a SWOT analysis. Make sure to research how to do a competitive analysis to get an idea of what your competitors’ strengths and weaknesses are.

Your first step is to identify and list these business strengths. Your strengths are internal factors that are positive and within your control.

To help build your list of business strengths, ask yourself the following:

• What internal processes of your company are successful? These could be good supplier relations, an advantage in the market over others, marketing, and online presence, additional services offered/value-adds, etc.
• What assets does your marketing team possess? Examples can be education, skills, knowledge, reputation, networking, and technical expertise.
• What assets does your company have: Assets can be in the form of location, equipment, software tools, unique selling points, robust processes, intellectual property, patents and other factors contributing to your business’s success.
• What competitive advantages does your company have? This refers to unique strengths or capabilities that set your business apart from the competition and give you an edge in the market. It could include factors such as proprietary technology, exclusive partnerships, strong brand reputation, superior customer service, efficient supply chain management, or a highly skilled and experienced team.

This is the tough part of the four quadrants since it’s difficult to confront the strengths and weaknesses of a business objectively. But your main priority here is to identify the company’s weaknesses both internally and externally.

Think of this as the building blocks to help you convert weaknesses into strengths.

This could include external environment factors such as pricing, competition, lowered demand, and more. It can also include internal weaknesses that negatively affect the business, such as a lack of budget, small teams, etc.

Opportunities

Now that you’ve done a deep dive into your business’s strengths and your business’s weaknesses, it’s time to identify potential opportunities. Based on the strengths and weaknesses you’ve laid out, where does your company have the advantage?

Are there markets where you’re performing well that can be further expanded? Do you have a strong marketing strategy that you could ramp up to drive demand? Think of the external factors you’ve identified and where your business might have an opportunity to grow.

Research how to create a one-page marketing plan and other business marketing plan tips to help you further develop your strategies.

The threats part of SWOT analyses can also scare off many. Essentially, the goal here is to look at potential threats that could negatively impact your business. Again, this can include internal issues and external threats that you identify.

Internal threats can include lack of staff, budgetary constraints, and other threats. External threats, as an example, can include markets you are not taking advantage of, negative reviews, strong competitors, and supplier issues.

When breaking down the SWOT analysis, businesses should consider questions like: For strengths, what unique resources do we possess? For weaknesses, what areas need improvement to compete effectively?

Opportunities can be identified by analyzing market trends: What new customer needs can we meet? Lastly, for threats, consider external changes like technological shifts: How can these disrupt our business model?

By methodically examining these elements, a business can develop strategies that leverage their strong points, improve weaknesses, reinforce opportunities, and guard against external threats.

External and Internal Factors

When looking at internal versus external factors, it’s important to differentiate between the two and understand how they could impact your business. Let’s take a look at both below…

Internal Factors

Internal factors are crucial components of your business’s internal environment, encompassing various aspects such as team size, resources, budget, processes, equipment, and other internal elements.

These factors are under the direct control of your business and hold the potential to exert a significant impact on your outcomes. By effectively managing and optimizing these internal factors, you can enhance efficiency, productivity, and overall performance.

It is essential to understand your strengths and weaknesses in these areas to make strategic decisions and strengthen your competitive position.

Human resources play a vital role in internal factors. A skilled and motivated team can contribute to higher productivity levels and increased customer satisfaction. Properly allocating resources and implementing well-defined processes ensures smooth operations and streamlined workflows.

Conversely, challenges such as limited budgets can pose constraints on hiring and training, while outdated equipment may impede efficiency and hinder progress. By assessing and addressing the specific needs of your human resources, you can optimize their potential and drive positive outcomes.

Financials are another critical aspect of internal factors. Managing your budget effectively allows for the proper allocation of resources and investment in growth opportunities.

It enables you to make informed financial decisions, such as allocating funds for research and development, marketing campaigns, or infrastructure improvements.

Monitoring and analyzing your financial data provides insights into cash flow, profitability, and overall financial health, allowing you to identify areas of improvement and make strategic adjustments.

External Factors

External factors, in contrast, refer to elements that are outside of your control and exist in the external environment of your business. These factors can include market size, economic conditions, technological advancements, legal and regulatory changes, and consumer trends.

While you may not have direct control over these factors, it is essential to be aware of their potential impact on your business.

External factors can present opportunities or threats to your business. For example, a growing market or favorable economic conditions can create opportunities for expansion and increased demand for your products or services.

On the other hand, factors such as economic downturns or disruptive technological advancements can pose challenges and require adaptation in order to remain competitive.

By closely monitoring and understanding external factors, you can anticipate changes, adjust your strategies, and take advantage of opportunities while mitigating potential risks.

Home Depot Example

One successful instance of SWOT analysis can be observed in the case of Home Depot. The company conducted a comprehensive evaluation of its internal strengths and weaknesses, as well as external factors that posed potential threats to its market position and growth strategy.

Home Depot identified several noteworthy strengths, including high-quality customer service, strong brand recognition, and positive supplier relationships. Conversely, its weaknesses were identified as a constrained supply chain, reliance on the U.S. market, and a business model that could be easily replicated.

Aligned with its weaknesses, Home Depot recognized various threats, such as the presence of close competitors, the availability of substitute products, and the condition of the U.S. market.

Through the SWOT analysis and other assessments, the company concluded that expanding its supply chain and global footprint would be essential for its growth and success.

By addressing its weaknesses and mitigating potential threats, Home Depot aimed to capitalize on its strengths and enhance its competitive position in the market.

How do You do a SWOT Analysis?

The following table breaks down the SWOT analysis that follows into simple steps, making it easy to understand and follow. It serves as a concise, clear guide, making the process less overwhelming and more manageable.

A SWOT analysis provides businesses with an outline of the current state and tangible areas to focus on for improved performance or development. Research how to perform a personal swot analysis if you are conducting a SWOT analysis for yourself. Here’s a step-by-step guide on how to do a successful business SWOT analysis:

Step 1: Gather Data

The first step in conducting a SWOT Analysis is to gather internal and external data about you or your company. Internal data includes financial statements, customer feedback surveys, and employee reviews, while external data may include industry trends and news reports from around the world.

This data will help identify your strengths and weaknesses as well as potential opportunities and threats in the environment.

Financial Statements

Financial statements are key for any company wanting to conduct a SWOT Analysis. These documents provide insight into your company’s revenue, expenses, assets, and liabilities. Knowing these numbers can help you identify where your company stands financially.

Employee Feedback

Employee feedback is an essential resource for any company looking to conduct an effective SWOT Analysis. This data can provide insight into the issues facing your business, as well as potential solutions that could be beneficial for the company.

Step 2: Brainstorm

Once you have gathered the necessary data, it’s time to start brainstorming around it. Break down the information into categories such as strengths, weaknesses, opportunities, and threats. Start by listing out any ideas that come up during the brainstorming process without any judgments or filters.

Don’t worry if some of these seem far-fetched or irrelevant. This list is simply meant as a starting point for further examination into each category.

Some of the strongest areas for your business could include a strong brand, motivated employees, an excellent track record with customers, a presence in multiple markets, and more.

As an illustration, let’s consider a hedge fund that has devised an exclusive trading strategy generating exceptional returns that outperform the market. The fund now faces the task of determining the most effective approach to utilize these outcomes in order to appeal to prospective investors and expand its investor base.

Similarly, for your business, notable strengths may encompass a well-established brand, a highly motivated workforce, a stellar history of customer satisfaction, a strong market presence across multiple sectors, and various other aspects that can help attract new investors.

Areas where you could stand to improve include communication, customer service, lack of employees with specific skill sets, limited resources, etc.

Potential areas of growth could include international expansion, increased market share in a certain region, new products, or a better customer experience.

External factors to keep an eye on could include new competition, changes in the economy, or shifting customer preferences.

Step 3: Analyze Strengths

The next step is analyzing the strength category by asking questions such as what are your main advantages, what resources do you have access to, or what makes your company stand out in the market. Looking at these inquiries objectively will allow you to gain insight into what makes you or your company successful.

Some of the main advantages could include a great reputation in the industry, a team of experienced employees, access to capital resources, and more.

What resources do you have access to that others in the market may not? This could include things such as experienced advisors, research and development teams, or reliable suppliers.

Unique Features

What makes your company stand out in the market? This could include a strong brand, state-of-the-art technology, or a diversified product line.

Step 4: Analyze Weaknesses

Continuing on from analyzing strengths comes looking at weaknesses within yourself or your organization. What processes could be improved?

Where can decisions be better informed? Allowing yourself and your team time to think about areas that need attention ensures that possible solutions can be discussed further down the line.

Improvements

Are there any processes that could be improved upon or streamlined? This can include anything from the way customer complaints are handled to the approval process for new projects.

Decision-Making

Are decisions being made with enough information? Having access to the right data is key for making informed decisions that will benefit the company.

Do you have access to the right experts that can help make better decisions or provide assistance in certain areas of the business? If not, what steps can be taken to obtain the necessary expertise?

Step 5: Identify Opportunities

In order to find potential opportunities for change and growth look toward external factors such as what new technologies are emerging, what regulations are changing, and whether there are gaps in current products or services providing space for improvement. Keeping up with current events opens your mind up to alternative options.

Step 6: Analyze Threats

External factors can also bring along with them possible threats. What competition exists in your market? Does anything pose a risk of disruption within existing services or products being provided? Monitoring all aspects of outside forces should be continuously done in order to optimize decision-making abilities when needed quickly.

Step 7: Construct an Action Plan + Implement Solutions

Applying possible solutions found through each of these steps comes down to constructing an action plan on how they can be implemented within your organization.

Writing out desired goals in regards to members responsible for obtaining them by certain dates set out beforehand coupled with methods of their achievement should lead towards meeting targets quickly and efficiently.

SWOT Analysis Template

Now that we’ve gone through some examples in different industries, how do you get started on creating a SWOT analysis of your own? Luckily, this kind of analysis is pretty easy to structure. You can create one using your computer or even just divide a piece of paper into four quadrants and start writing.

These videos by Starbucks and Tesla show how they performed SWOT analyses on their companies. These examples can give you real-life applications to get you started on your own SWOT analysis.

Watching how established companies like Starbucks and Tesla conduct their SWOT analyses provides valuable insights and practical examples. It can help you understand the intricacies of the process and effectively implement it in your own business scenario.

As a helpful tool, we’ve created a free SWOT Analysis template for different types of businesses. You can use them to get started with your analysis:

SWOT Analysis Examples

When trying to come up with a SWOT analysis for your own business, it’s sometimes easier to see what others in your industry are doing. Before conducting a SWOT analysis for your company, you can look at some examples below to get some inspiration.

SWOT Analysis Example: Small Business

Regardless of industry, it can be difficult for a small business to identify weaknesses, opportunities, and threats. Here’s a great example to help you understand how to structure your SWOT analysis:

Marketing SWOT Analysis

For businesses focusing on improving one specific aspect of the business, such as sales or marketing, here is a marketing SWOT analysis example that you can use as a starting point for your own SWOT analysis.

3. Company SWOT Analysis Example

For larger companies, it’s sometimes difficult to hone down and focus on strengths, weaknesses, opportunities, and threats because there are so many competing aspects. That’s why it can be helpful to look at a SWOT Analysis of a company example to help you structure your own.

SWOT Analysis Example for a Restaurant

Food service businesses tend to have their own unique challenges, so identifying potential strategies is often difficult. However, using a Restaurant SWOT analysis example, you can build off it and create a SWOT analysis for your business that’s reflective of the market.

Acting on Your Results

A SWOT analysis is a powerful tool for understanding the internal and external factors that are impacting your business and is useful for startups, along with a proper business plan. It’s important to use the results of the analysis to create actionable steps and set realistic timelines for reaching your goals.

By staying focused and organized, you can use a SWOT analysis to make analysis a part of your long-term business strategy to ensure the future success of your business. And if you don’t have a business plan, be sure to research how to write a business plan to help set your business up for success.

While on the subject of planning, make sure to also learn how to create a one-page marketing plan . With all the data you have from your SWOT analysis, you will be able to establish a more effective marketing strategy.

SWOT Analysis Tips

A strong SWOT analysis is about diving deep into your business and collating all the information in an organized way. The more you’re able to tap into what makes your business unique and what needs to improve, the more actionable your SWOT analysis will be.

Here are some tips to ensure you’re getting the most out of a SWOT analysis:

Don’t be Afraid

A good SWOT analysis is about confronting each part of the business: the good, the bad, and everything in between. Of course, it can be difficult to put down everything and objectively confront aspects of the business.

However, it’s important to move past that feeling and be truly objective about your business – that will ultimately help it improve.

Ask for Feedback

To make sure your SWOT analysis truly covers everything, ask for feedback and suggestions. Involving a mix of team members, including more senior and junior stakeholders, can help you spot problems you might not have known about.

Be Systematic

Sometimes, the easiest way to fill out a SWOT analysis is to have a system. That can mean going through internal issues across each quadrant first and then moving to external factors. Or you can choose to do two quadrants at a time, such as strengths and opportunities if that is easier.

Create Timelines

In order for your SWOT analysis to be actionable, you need to create timelines alongside to meet your goals. For all the opportunities you identify, what is a reasonable timeframe to make them happen? For threats, think about how close or far threats are so you can prioritize action items more realistically.

Learn Business Abbreviations and Acronyms

In order to make sure you’re accounting for everything in the business, it’s important to learn any business abbreviations or acronyms that are used in the industry, especially for external factors.

The Takeaways

As you can see, a SWOT analysis is an essential tool for businesses and organizations to evaluate their internal strengths and weaknesses, as well as external opportunities and threats.

By conducting a thorough SWOT analysis, businesses can gain valuable insights into their current position and make informed decisions to drive success and growth.

Whether it’s identifying areas for improvement, capitalizing on strengths, or mitigating risks, the SWOT analysis provides a structured framework for strategic planning and decision-making.

Utilizing the examples and free template provided in this article, businesses can effectively apply the SWOT analysis to enhance their competitiveness and achieve their goals.

Image: Envato Elements

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BUSINESS STRATEGIES

SWOT analysis: what is it and how to do it for your business

• Cecilia Lazzaro Blasbalg
• Jul 27, 2021

You can be a seasoned company with an established business plan, or be starting out and create a website for your new venture. Either way, identifying and understanding your competitors at each step of the process can lead to building a better business strategy.

This is where a SWOT analysis comes into play. It is a useful tool for making improvements and keeping your marketing goals on track. In this guide, we’ll explain what this method is all about and how to do a SWOT analysis of your own.

What is a SWOT analysis?

SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats. A SWOT analysis is a strategy used by businesses for measuring and evaluating their overall performance, and that of competitors, in an objective manner. All these factors help business owners make smarter decisions for their company, such as if a venture should grow into a new field or rebrand itself.

The first two parameters, strengths and weaknesses, involve internal factors such as your reputation, team, location and intellectual property. These considerations are not necessarily permanent, and can fluctuate over time. It’s within an organization's own control to keep or change them (which can happen for the better or the worse). So, assuming you want to make a positive change, you’re going to need to put forth the effort and time to see that happen.

Opportunities and threats are related to external influences such as competitors, market trends, and prices of materials. Unfortunately, these are not within an organization’s control, and therefore you are not able to change them. That said, successful businesses and corporations learn how to work with these factors to their advantage, and also adapt their strategies accordingly in order to compete with others in the field.

Why do a SWOT analysis

As mentioned earlier, SWOT analysis is a lengthy process that can help different types of businesses draw conclusions by enabling them to see the bigger picture clearly. Once they have obtained valuable data and insight, only then can businesses formulate a clever and strategic plan accordingly.

Furthermore, a SWOT analysis forces you to examine your business in new and interesting ways vis-à-vis your strengths and weaknesses. This preparedness enables you to not only be ready for any challenges that might impact your business, but also offers a deeper understanding of potential opportunities or threats within your target market .

How to do a SWOT analysis

SWOT analysis should be a collaborative and inclusive process, so before you can really dive in, be sure to assemble your partners, stakeholders and any other decision-makers who will bring their ideas to the table. This way you’ll ensure you hear multiple opinions and diverse outlooks that’ll enrich your overall SWOT discussion ahead.

Below, we’ll walk through the stages of how to do a SWOT analysis for reviewing both your own company and competitors. For each one, grab a white board, sheet of paper, or another note-taking device. On this, create four sections for each company you’ll analyze. Label the sections with these parts: strengths, weaknesses, opportunities, and threats. And remember that when it comes to this type of analysis, leave out the bias. The more honest you are, the better and more useful your results will be.

Steps on how to do a SWOT analysis:

In order to get a better sense of what a complete SWOT analysis might look like, we’ve taken the example of a hypothetical massage therapist who is starting a service business.

Identify your company strengths

Be aware of your weaknesses

Recognize business opportunities

Understand potential threats

Make a business plan

01. Identify your strengths

Strengths are the big things that a particular company is doing well, which gives them a competitive advantage in their industry and benefits their customers. For your own business, identifying your strengths can help you leverage these by making them stronger.

For competitors, consider their strengths a goal to aim for. Ask yourself, How can I do what they do, but better? or, How can I create my own twist on this idea that outsmarts theirs?

Here are a few questions to consider as you begin your SWOT analysis:

What are this company’s competitive advantages in the industry?

What features do they offer that are unique and valuable?

What processes are they excelling in?

What draws customers in?

Are they a market leader? If so, how did they get here?

Is the organization expanding and hiring new employees?

What strong assets does the company have, i.e., intellectual property, stakeholders, buildings, etc.?

02. Be aware of your weaknesses

These are the aspects of an organization that could use some improvement. During this stage of a SWOT analysis, it’s especially important to be honest with yourself. It might be a bit uncomfortable at first, but if you don’t draw attention to a weakness, there won’t be room for you to make it better.

Note that many of the points you analyzed from the strengths above can be addressed in this section as well, but with a reverse meaning. For example, a strength might be “expanding their business and hiring new people,” while a weakness could be “losing employees to competition.” So think about those as options in addition to these kinds of questions:

What could this company do better?

What processes could be improved?

Is this company lacking an established reputation?

What is this company struggling with compared to others in the industry?

What do customers often complain about?

Is the organization losing employees?

What assets is the company lacking, from patents to funding to employee positions and more?

03. Recognize business opportunities

Owning a business is all about seizing the moment. Opportunities are probably the same for yourself and your competition, if not very similar. Recognizing them is the first step, and taking advantage of them before your competition does is the second. Likewise, you should do so at the determined time that makes the most sense for your business, depending on what stage of development you’re in. Here are more questions for doing a SWOT analysis the right way:

What is the latest trend, such as a green initiative to use recycled packaging or working with social media influencers for promotion?

What are some upcoming events to take advantage of, such as a trade show, holiday or recent news release?

Is there a loophole in your market, such as a cheaper supplier or opportunity to eliminate the middleman?

Is there an opportunity to expand to a larger building or better location?

Could the business be sold soon? Or on the other hand, could this business buy smaller, local businesses to expand?

04. Understand potential threats

These are external factors which can put a business in a negative light. And just like opportunities, threats are often similar for both you and your competitors. However, some threats can be individual to an organization, such as a particularly bad PR scandal from an unhappy customer. It’s extremely important to learn how to mitigate these, and prevent them from turning into larger issues in the future.

Although threats come last in the SWOT analysis, it might be a good idea to address them first off paper. Like a small fire, if you don’t act quickly, threats can sometimes cause irreplaceable damage.

Here are examples of potential threats:

Is a customer expressly unhappy with a particular product or service?

Is the market fluctuating, i.e., are prices rising, are consumers purchasing alternatives, etc.?

Are there new government regulations to watch out for?

What is it that they are doing better? Do some market research to find out.

Will new technology become available in the near future that could make this business’s products or services obsolete?

Are consumers no longer expressing interest in these services?

05. Make a business plan

Now that you’ve laid out the most important components affecting the success of your organization and your competition, you have the tools you need to develop a strategy. This plan will guide you to make improvements in your company, and compete on a level playground with your competition.

Consider these five steps in working through your plan:

Get feedback on your own SWOT analysis from your employees and other relevant stakeholders.

Draw out a plan, which involves using your strengths to counteract your weaknesses, as well as finding opportunities through your threats. If you’re just starting a business , write out these components as a part of your business plan , too.

Communicate your ideas to your team members, making sure that everyone is on board and held accountable.

Prioritize your action items, starting with the most important factors first. (Perhaps these are your threats if they are urgent matters.)

Execute your plan with a business proposal . Introduce the plan in the format of listed action items for your team, making sure to assign a designated person for each topic.

As your business continues to grow and evolve, know that this is just a snapshot of a moment in time. Many of these factors are subject to change at a later date. It’s a good idea to come back to this exercise in the future so that you can properly assess where your business stands in your industry and how far along you came.

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What is a SWOT Analysis? (And When To Use It)

Use a SWOT (strengths, weaknesses, opportunities, threats) analysis to grow your business.

Table of Contents

A SWOT analysis is a planning process that helps your company overcome challenges and determine which new leads to pursue. “SWOT” stands for strengths, weaknesses, opportunities and threats. You should perform a SWOT analysis before you commit to any sort of company action, whether you are exploring new initiatives, revamping internal policies, considering opportunities to pivot or altering a plan midway through its execution.

While there are numerous ways to assess your company, one of the most effective is to conduct a SWOT analysis. Learn all about this approach below.

What is the objective of a SWOT analysis?

The primary objective of a SWOT analysis is to help organizations develop a full awareness of all the factors involved in making a business decision . Albert Humphrey of the Stanford Research Institute created this method in the 1960s during a study conducted to identify why corporate planning consistently failed. Since its creation, the SWOT analysis has become one of the most useful tools for business owners to start and grow their companies.

“It is impossible to accurately map out a small business’s future without first evaluating it from all angles, which includes an exhaustive look at all internal and external resources and threats,” Bonnie Taylor, chief marketing officer at CCS Innovations, told Business News Daily. “A SWOT accomplishes this in four straightforward steps that even rookie business owners can understand and embrace.”

When to perform a SWOT analysis

Employ a SWOT analysis before you commit to any company action, whether that’s exploring new initiatives, revamping internal policies, considering opportunities to pivot or altering a plan midway through its execution. Sometimes it’s wise to perform a general SWOT analysis to check on the current landscape of your business and improve operations as needed. The analysis can show you key areas where your organization is performing optimally and areas where operations need adjustment.

Don’t make the mistake of thinking about your business operations informally, in hopes that they will all come together on their own. If you take the time to put together a formal SWOT analysis, you’ll be able to see the whole picture of your business. From there, you can discover ways to improve or eliminate your company’s weaknesses and capitalize on its strengths.

While the business owner should certainly be involved in creating a SWOT analysis, it is often helpful to include other team members in the process. Ask for input from a variety of team members and openly discuss any contributions made. The collective knowledge of the team will allow you to adequately analyze your business from all sides. 

You can also conduct a personal SWOT analysis in your own life, whether for professional or other purposes. 

What does a SWOT analysis include?

A SWOT analysis focuses on the four elements of the acronym, allowing companies to identify the forces influencing a strategy, action or initiative. Knowing these positive and negative elements can help companies more effectively communicate what parts of a plan need to be recognized.

When drafting a SWOT analysis, individuals typically create a table split into four columns to list each impacting element side by side for comparison. Strengths and weaknesses won’t typically match listed opportunities and threats verbatim, although they should correlate, since they are tied together.

Billy Bauer, owner of ROYCE New York, noted that pairing external threats with internal weaknesses can highlight the most serious issues a company faces.

“Once you’ve identified your risks, you can then decide whether it is most appropriate to eliminate the internal weakness by assigning company resources to fix the problems, or to reduce the external threat by abandoning the threatened area of business and meeting it after strengthening your business,” said Bauer.

Internal factors

Strengths (S) and weaknesses (W) refer to internal factors, which are the resources and experience readily available to you.

These are some common internal factors:

• Financial resources (funding, sources of income and investment opportunities)
• Physical resources (location, facilities and equipment)
• Human resources (employees, volunteers and target audiences)
• Access to natural resources, trademarks , patents and copyrights
• Current processes (employee programs, department hierarchies and software systems) [See related articles: Best CRM software of 2024 and The Best Business Accounting Software Services of 2024 ]

External factors

External forces influence and affect every company, organization and individual. Whether these factors are connected directly or indirectly to opportunities (O) or threats (T), it is important to note and document each one.

External factors are typically things you or your company do not control, such as the following:

• Market trends (new products, technology advancements and shifts in audience needs)
• Economic trends (local, national and international financial trends)
• Funding (donations, legislature and other sources)
• Demographics
• Relationships with suppliers and partners
• Political, environmental and economic regulations

After you create your SWOT framework and fill out your SWOT analysis, you will need to come up with some recommendations and strategies based on the results. Linda Pophal, strategic marketing communication consultant and content marketer at Strategic Communications, said these strategies should focus on leveraging strengths and opportunities to overcome weaknesses and threats.

“This is actually the area of strategy development where organizations have an opportunity to be most creative and where innovative ideas can emerge, but only if the analysis has been appropriately prepared in the first place,” said Pophal.

SWOT examples

Bryan Weaver, an in-house advisor to Scholefield Construction Attorneys, was heavily involved in creating a SWOT analysis for his firm. He provided Business News Daily with a sample SWOT analysis template and example that was used in the firm’s decision to expand its practice to include dispute mediation services. His SWOT matrix included the following:

Resulting strategy: Take mediation courses to eliminate weaknesses and launch Scholefield Mediation, which uses name recognition with the law firm, and highlights that the firm’s construction and construction law experience makes it different.

“Our SWOT analysis forced us to methodically and objectively look at what we had to work with and what the marketplace was offering,” Weaver said. “We then crafted our business plan to emphasize the advantages of our strongest features while exploiting opportunities based on marketplace weaknesses.”

Additional business analysis strategies

The SWOT analysis is a simple but comprehensive strategy for identifying not only the weaknesses and threats of an action plan, but also the strengths and opportunities it makes possible. However, a SWOT analysis is just one tool in your business strategy. Additional analytic tools to consider include the PEST analysis (political, economic, social and technological), MOST analysis (mission, objective, strategies and tactics) and SCRS analysis (strategy, current state, requirements and solution).

Consistent business analysis and strategic planning is the best way to keep track of growth, strengths and weaknesses. Use a series of analysis strategies, like SWOT, in your decision-making process to examine and execute strategies in a more balanced, in-depth way.

Max Freedman and Nicole Fallon contributed to this article. Some source interviews were conducted for a previous version of this article.

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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. This 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.

What is a SWOT analysis?

SWOT — which stands for “strengths, weaknesses, opportunities and threats” — 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?

A SWOT analysis gives you a detailed, unbiased overview of your business as a whole or a specific product or campaign. 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.

“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 five effective ways to differentiate your product .] 

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 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 ?
• 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

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.”

Next, look at your weaknesses and identify which aspects of your business each weakness is related to. For example, is poor customer retention due to staff? Location? Competitors? “Identify where the problem is coming from so you can begin to plan to address it,” said Pratt.

Then, you can 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.

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.”

As you’re evaluating your results, 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 and 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.

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; rather, 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 of GSA Focus.

Additional reporting by Sean Peek.

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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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SWOT Analysis

What is a swot analysis.

A SWOT analysis is a planning framework that a business can use to identify a strategic endeavor’s strengths, weaknesses, opportunities, and threats. The term SWOT is an acronym for these four factors.

In a SWOT analysis, a project’s (or product’s) strengths and weaknesses are internal factors. Strengths might include the company’s domain expertise or intellectual property. Weaknesses might include missing skillsets or a lack of budget. Opportunities and threats, by contrast, are external and refer to competition, the market, or changing trends that could affect the company.

SWOT analysis examples

How does a SWOT analysis work?

An organization or team should conduct a SWOT analysis in the early stages of any new large-scale strategic endeavor.

This execution will vary by company and industry, but here is an overview of the basic steps involved.

Step 1: Identify the objective.

This could include launching a new product, building out a new staff, or responding to competitive or market pressure by adding new functionality to your existing solution.

Step 2: Assemble your team.

A SWOT analysis is a team undertaking and should involve the right people. This will probably include the leadership team and the people directly involved in the project. But SWOT analyses also benefit from varied perspectives, which means they should include people across the organization including sales and support professionals.

Step 3: Build your SWOT matrix.

This is a simple, two-by-two grid like the one shown here. It should include boxes labeled strengths, weaknesses, opportunities, and threats.

Step 4: Fill in the grid.

Now your team can begin brainstorming, discussing, offering their thoughts on each of these four categories in relation to the proposed new project.

The points you list under each category can be based on data, or they can be anecdotal. They can be a fact or opinion. But they should all be clear and concise, ideally in bullet form, so that everyone can review them quickly when the grid is complete.

Step 5: Talk it out—and draw conclusions.

In this final step, your team will examine your completed SWOT matrix, and discuss what all of the details mean for the proposed project. The strategic question you will need to answer is whether or not the potential strengths and opportunities are likely to outweigh the weaknesses and threats your SWOT analysis revealed.

How can product managers use a SWOT analysis?

Product managers can use a SWOT analysis for several areas of valuable business intelligence about their products, including:

• To learn how an existing product is performing in the market
• To determine whether or not developing a new product makes strategic sense
• To decide whether or not it will be feasible to enter a new market

Product managers can also use SWOT to quickly communicate to stakeholders where they stand today with their existing product line and with products under development.

A SWOT analysis is a valuable planning framework that any team within an organization can use to quickly get a sense of the feasibility of moving forward with a new project. The SWOT matrix is easy to build, completing the matrix can lead to the use of brainstorming and ideas, and the entire process is quick and simple. We recommend using a SWOT analysis for any important strategic undertaking at your company.

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Money Talks News

Plan Your Job and Career With a SWOT Analysis

Posted: January 3, 2024 | Last updated: May 23, 2024

Editor's Note: This story originally appeared on FlexJobs.com .

Are you looking to gain insight into your next career move? Whether you’ve already launched your job search or you’re simply analyzing your career map, are you seeking a direction that’s intentional and not based on circumstance? If so, consider using a SWOT analysis to strategize your job search and your career as a whole.

Businesses frequently use SWOT analyses to strategize and plan based on an overview of their current strengths, weaknesses, opportunities, and threats (SWOT). Even though the SWOT analysis was created for project management and large strategizing, it can be just as effective for career planning. A SWOT analysis involves two areas: The first involves factors you can control — internal strengths and weaknesses; the second involves analyzing factors outside of your control — external opportunities and threats.

When you work through a SWOT analysis, you’ll better understand how you can impact external factors in your career by highlighting or developing your skills.

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How Does a SWOT Analysis Work? (Template)

Break your brainstorming and analysis into four distinct sections: strengths, weaknesses, opportunities, and threats.

Although a traditional SWOT analysis comprises a large square broken into four separate segments, you can also create four lists. The key is to create them independently but in a way that allows you to analyze correlations between them.

As the name implies, this is what you’re good at. However, digging deeper into your strengths is vital to career success. In the context of your job search, it’s your on-the-job experience, certificates, and education. Along with all of those hard skills , list out your soft skills .

Include anything that sets you apart or might give you an edge over the competition. If you’re drawing a blank, think back to previous performance reviews or feedback from professors, previous managers, or coworkers. That should give you a good starting place for your list.

Perhaps you’re an excellent communicator, able to articulate complex ideas in a way anyone can understand. Or, maybe your project management skills have kept your previous teams on track and under budget. These experiences, skills, and talents make you a catch for employers.

Brainstorming questions :

• What top three skills help me approach projects uniquely from others with the same title?
• What tasks or situations have made me feel the most confident and effective?
• What personal qualities do my bosses and coworkers acknowledge or praise (team leadership, innovative thinking, attention to detail)?
• What accomplishment am I most proud of in my career?

Avoid spiraling into self-criticism. Consider your weaknesses in the context of a future job or promotion you’d like. Be honest about where your skills lie and where they need improvement in order to achieve your goals.

• What skills do I feel less confident in, but need to advance in my field?
• Have I received feedback from colleagues, supervisors, or clients about specific aspects of my work that need improving?
• Are there recurring patterns in my professional life that lead to being overwhelmed?
• What gaps in my education, certification, or professional development do I need to address?

No one’s perfect, and recognizing areas for improvement is good. Perhaps you need help with public speaking or getting too anxious when it’s time to present in a meeting. Or, maybe you’ve received specific feedback, such as your writing could be more transparent, or you can only progress once you become proficient in specific software.

Your weaknesses might not be interpersonal. They could be qualifications you need, such as specific software or certification. These aren’t failures but areas where you can grow.

Opportunities

At first glance, your opportunities overlap with your weaknesses. But they’re two very distinct categories. Opportunities refer to external factors that you don’t control. You’ll add potential careers and positions that you might pursue. That could be a company whose products or mission aligns more closely with your interests.

You may be tech-savvy with a passion for helping others. Have new digital tools created opportunities in health or finance that weren’t there before? This could be a perfect niche for you to explore.

On the other hand, it could be a more lucrative salary or flexible schedule that you’re after. Maybe technology is advancing and creating growth in a specific area of your job. Are there new roles opening up because of that? Those are opportunities for your job search and your career.

• Are there any projects or initiatives your team hasn’t approached yet but would be a great fit?
• What industry advancements are happening that you could lean into and help your team embrace?
• Is there growth potential on the horizon due to company expansion or retirement? How do you set yourself up for promotion when those opportunities arise?
• Is there a specific aspect of your role that you really enjoy? How could you set yourself up for a career move where you can focus more heavily on that aspect?

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When assessing threats in the context of your job search or career plan , consider all of the factors beyond your control. Analyze industry trends, job market competition, technological advancements, or economic conditions. Although you can’t eliminate these external factors, you can develop strategies to mitigate their impact on your career path.

• Is your company considering a merger or acquisition that could limit your momentum?
• Are technology advances significantly impacting your industry, possibly leading to fewer high-quality positions?
• Has your life situation or health impacted your ability to fulfill your duties?
• Does your current situation lack opportunity for growth?

Economic factors, like local and national financial concerns, are well outside your control. As you craft your job search and overall career plan, strategize effectively to weather any threats.

Related: 17 Surprising Things You Can Sell for Extra Money

Apply SWOT Analysis in Your Job Search

Once you’ve got a target, you can create a plan to get there. Consider how your experiences align with your target and what development you need, and plan to meet any external threats you listed.

Self-awareness is powerful! But you still need to take action on your findings. Create an actionable plan using SMART goal-setting — make your goals specific, measurable, achievable, relevant, and timely (SMART).

Break down larger tasks into smaller, more approachable tasks to build momentum.

If you need help building a clear path from where you’re at to where you want to be, consider working with a mentor or career coach to help you strategize. Remember to put a placeholder on your calendar for each quarter to reassess your SWOT analysis and adjust as needed.

Using a SWOT analysis to help you create a clear pathway is an innovative way to take a step back and strategize your career moves. It can offer a powerful insight that enables you to navigate the job market with more focus, intention, and confidence. So, roll up your sleeves and start SWOT-ing your way to a successful career!

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