SWOT Analysis
A strategic planning technique for identifying strengths, weaknesses, opportunities, and threats.
A SWOT analysis is a strategic planning tool used to help an organization identify its strengths, weaknesses, opportunities, and threats related to business competition or project planning. It is intended to specify the objectives of the business venture or project and identify the internal and external factors that are favorable and unfavorable to achieving those objectives.
Users of a SWOT analysis often ask and answer questions to generate meaningful information for each category to make the tool useful and identify their competitive advantage.
- Type: Business Framework
- Core Idea: Strategic Planning
- Key Elements: Strengths, Weaknesses, Opportunities, Threats
The Four Components
Breaking down the SWOT matrix.
Strengths
Strengths are internal, positive attributes of your company. These are things that are within your control. Examples include a strong brand, loyal customer base, a strong balance sheet, unique technology, and so on.
Weaknesses
Weaknesses are negative factors that detract from your strengths. These are things that you might need to improve on to be competitive. Examples include a weak brand, higher-than-average turnover, high levels of debt, an inadequate supply chain, or lack of capital.
Opportunities
Opportunities are external factors in your business environment that are likely to contribute to your success. Examples include a new international market, a market niche that is underserved, or new technology.
Threats
Threats are external factors that you have no control over. You may want to consider putting in place contingency plans for dealing them if they occur. Examples include a new competitor in your home market, price wars with competitors, a competitor has a new, innovative product or service, or new regulations.
Implementation & Strategy
Costs, timelines, and strategic considerations for adopting SWOT Analysis.
Estimated Project Costs
SWOT analysis is a strategic planning tool, so it doesn't have a direct cost. However, there are costs associated with the time and resources that you dedicate to the process. These costs can range from a few hundred dollars to several thousand dollars, depending on the size and complexity of the organization.
Implementation Strategy
A typical SWOT analysis starts with a brainstorming session to identify the organization's strengths, weaknesses, opportunities, and threats. From there, the organization can develop a strategic plan to address the issues that were identified. The final step is to implement the plan and to monitor and adjust it over time.
Comparisons
How SWOT Analysis stacks up against other business frameworks.