analisis swot business plan

– Zeeshan Akhtar , head of marketing at Mailmodo

“It's easy to fall into a groupthink because usually, SWOT analysis is conducted by management. What we did differently in this case, given the issue we wanted to tackle, was involve an external consultant as well as internal employees to get more diverse perspectives and creative solutions.”

– Zach Dannett , cofounder at Tumble

“ During a SWOT analysis, delving deep into competitors' operations to uncover their vulnerabilities can be invaluable. For instance, discovering a key competitor struggling with customer service inefficiencies through reviews and market feedback can highlight an opportunity for differentiation.”

– Harrison Tang , CEO of Spokeo

“Set priorities and focus on the most impactful areas first. Allocate resources strategically, prioritizing initiatives that promise the greatest returns.”

Arham Khan , CEO of Pixated

“ In terms of leveraging the results, businesses need to be proactive. Don't just see it as a one-time report - use it as a roadmap. Whether reinforcing strengths, addressing weaknesses or pursuing opportunities, SWOT should influence strategic planning and product roadmaps. Revisit it annually too, as situations evolve. ”

– Kelly Indah , editor-in-chief at Increditools

Ultimately, a SWOT analysis can measure and tackle both big and small challenges, from deciding whether or not to launch a new product to refining your social media strategy.

When conducting your own SWOT analysis, you may face problems like data overload, differing opinions, and actionability. I certainly did. However in my experience, these problems can be solved by:

• Focusing on the most relevant information and filtering out the noise.
• Facilitating discussions to reach an agreement or using a neutral moderator.
• Ensuring each point is specific and actionable, providing clear direction for your strategies.

I will conclude this piece by saying don‘t underestimate the power of taking a step back from time to time to assess where you’ve been, where you‘re at, and where you’re going.

I firmly believe that regularly conducting a SWOT analysis is critical for any entrepreneur looking to grow.

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

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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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What Is A SWOT Analysis? Download Our Free Template

Updated: May 28, 2024, 9:59pm

A SWOT analysis is a framework used in a business’s strategic planning to evaluate its competitive positioning in the marketplace. The analysis looks at four key characteristics that are typically used to compare how competitive the business can be within its industry. A proper SWOT analysis can give you a fact-based analysis to make decisions from, or it could spark your creativity for new products or directions.

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The Four Points of SWOT

The four points of a proper SWOT analysis are Strengths, Weaknesses, Opportunities and Threats. Strengths and Weaknesses focus internally on the business being evaluated, while Opportunities and Threats look at competition and things going on externally. Let’s look at the four points in more detail to determine how you can correctly evaluate each one.

• Strengths. Your Strengths are internal positives about your company that you can control and that often provide you with a competitive advantage. Some examples might be the quality of your product, the effectiveness of your processes, your access to physical or team assets or other competitive advantages.
• Weaknesses. A Weakness is an adverse internal attribute about your company that negatively takes away from your Strengths. Some examples might include knowledge gaps on your team, a low-quality product, a lack of money or other tangible assets, bad locations and more.
• Opportunities. An Opportunity is an external factor that provides promise or is likely to contribute to your potential success. Some examples might include the growth rate in your industry, specific laws or policies that will benefit the need for your product, positive customer feedback or technology advancements.
• Threats. A Threat is an external factor that you have no control over, which could negatively impact your success. These are typically acknowledged so that you can provide a plan to overcome each one. Some examples include potential future competitors, costs of supply, upcoming market trends, negative technology changes and upcoming regulations or laws.

The key to a strong SWOT analysis is accuracy in your research across all four points. Once you have the right information, you need to display it in an efficient and appealing way so that the data can easily be shared across your organization, with potential investors or with whoever might benefit the most from receiving it.

Downloadable SWOT Template

A SWOT analysis is usually presented in a grid form that provides the most important information from the analysis in each of the four points or areas. We have created a downloadable template that you can use to easily make your own SWOT analysis and include it as part of your next presentation or proposal. If preferred, you can also make a copy in Google Docs.

Download Free Template

How To Do an Effective SWOT Analysis

Every SWOT analysis is somewhat unique to each business but, ultimately, there is a straightforward process that can work for everyone. For example, you’ll have to complete all four points for a proper SWOT analysis but the research and method of getting the information could vary. The depth of each point might also vary depending on the age of your business, and the competition or opportunity in your industry.

The three steps to complete a proper SWOT analysis are:

• Gather the right stakeholders together. You need to involve more than yourself when going through a SWOT analysis. Key leaders and decision makers in your organization should be involved in going through the exercise. If you’re starting a business, you should include all who are involved in the business at this point in time.
• Brainstorm and capture SWOT data. The second step is to go through the process of identifying the information related to each of the four points. Everyone should do this independently as well as collectively.
• Analyze the data. Take all of the information collected through the brainstorming and come to an agreement on what factors should be represented in each of the main points. Then you can plug your information into the SWOT analysis template above and use this to strategically plan for future growth.

Questions To Aide Your Research for Each SWOT Point

When conducting the SWOT analysis, the most important part is making sure you’re as inclusive as possible with the analysis of each point. We’ve compiled a list of questions that you can use to start working through each point in your SWOT analysis so that you don’t leave anything off your list.

Use-case Examples

You can use a SWOT analysis for a number of activities, from deciding whether to invest in a business to helping an individual perform better at a non-profit. The use of SWOT is industry agnostic, as long as there are both internal and external factors that relate to the team, business or person being evaluated.

Some use-case examples for SWOT analysis include:

• A new business venture. Whenever a new business is launching it is a good idea to create a SWOT analysis to see where your Strengths and shortcomings lie. If you’re looking to raise money, then it will be expected that you’ve completed this analysis.
• Launching a new product. Whenever you’re launching a new product, you can treat it like a new business and complete the SWOT analysis to ensure success. Not doing your research beforehand could lead to targeting the wrong customers or not preparing for the competitive landscape.
• Improving team processes. From time to time, it could be beneficial to evaluate the performance of your team and see where you’re succeeding and what Opportunities exist to improve.
• Product team adding features. Every time a new feature is added to your product, your team can complete a SWOT analysis to see what impact it could have on the competitive landscape.
• Marketing team launching a campaign. Whenever a new target audience or method for reaching them is considered, the marketing team can complete a SWOT analysis to determine its potential.

As you can see, the sky’s the limit for use cases since you can use a SWOT analysis to determine the potential Strengths or roadblocks for just about anything.

Alternatives To SWOT Analysis

Depending on your situation, or your business, you may want to consider an alternative to a SWOT analysis. There are several options that can give you similar results, but these four alternatives are the most popular amongst businesses and teams looking at SWOT.

• SOAR analysis. SOAR stands for Strengths, Opportunities, Aspirations and Results. This is the most positive analysis on the list and is one of the most popular with those who dislike the SWOT analysis. This method requires you to evaluate the “six Is” of collaboration (initiate, inquire, imagine, innovate, inspire and implement).
• SCORE analysis. SCORE stands for Strengths, Challenges, Options, Responses and Effectiveness. Many like the “challenges” point of SCORE because it encompasses Threats, Weaknesses and obstacles in a single point while making all of them more of a positive opportunity. The SCORE methodology also focuses on actions you can take to improve instead of just focusing on the information from the analysis.
• NOISE analysis. NOISE stands for Needs, Opportunities, Improvements, Strengths and exceptions. The needs point focuses on the things your business or team needs to succeed instead of focusing on your shortcomings as things that stand in your way. This approach really trains you to see potential growth instead of roadblocks.
• Gap analysis. Gap is the only analysis on this list that doesn’t stand for anything. A gap analysis looks at where you’re at right now, where you want to go and how you close the gap between the two.

Check out our full guide to cost benefit analysis .

When To Use SWOT

When you need a broad analysis of your business, department, organizational or team potential, you should look no further than the SWOT analysis. It can provide a good overview of all of the major points that add up to potential success and help you draft a road map for potential growth. A SWOT analysis is also a good fit if you just need a quick comparison of your business to the competitive landscape that is out there.

When To Use an Alternative

If you need to dive deeper into specific factors or points of your business or team potential, then you may want to consider another alternative to the SWOT analysis. Alternatively, many pundits think that the word choices in SWOT are either vague or that they promote defeat. If you agree with that before you begin the SWOT analysis, then another option might be best for you so that the end goal of growing your business or team is met without obstacles.

Frequently Asked Questions

Who should complete a swot analysis.

Anyone looking to determine how a business or organization matches up against the competition, if there are both internal and external factors involved, should do a SWOT analysis. While a SWOT analysis is mostly used by new businesses or businesses launching a new product, it can also be used for any other type of organization and even for your local economy .

When should you do a SWOT analysis?

If you want to change your strategic positioning or launch a new product or service, then you should complete a SWOT analysis. Some also complete the exercise if they are just curious about their current positioning in their market or industry.

How do you write a good SWOT analysis?

A good SWOT analysis includes a full analysis of each point (Strengths, Weaknesses, Opportunities, Threats) as well as a clear and concise way of displaying the end results. The three primary steps to writing a good SWOT analysis are:

• Gather the right stakeholders together.
• Brainstorm and capture SWOT data.
• Analyze the data.

What are examples of threats in a SWOT analysis?

Threats are often external influences outside of your control; things that you risk by doing business. Inclement weather is one good example of something that you can’t combat and will have to deal with as it happens. Having a plan in place for dangerous storms will help you be prepared when they inevitably happen. Waiting for permits, supply chain failures and manufacturing errors can all impact your business negatively.

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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 SWOT analysis 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 trends  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 .

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How to do a SWOT Analysis in 7 Steps (with Examples & Template)

A SWOT analysis is a strategic planning tool that an organization can use to thoroughly evaluate a business or product. SWOT is an acronym that stands for strengths, weaknesses, opportunities, and threats. 

It allows businesses to evaluate their company’s competitive advantage and the flaws of its current business model and create strategies to capitalize on or reduce these observations.

In this article, we’ll discuss the key steps on how to do a SWOT analysis and give several brief examples highlighting the strategy being utilized in different situations.

How To do a SWOT Analysis?

One of the best things about performing a SWOT analysis is that it can be learned quite quickly and mastered with just a few attempts. Even though each framework is individualized, here are the basic steps involved in building a standard SWOT analysis .

Step 1: Determine Your Objective

Before embarking on a SWOT, it is vital to define your objectives. This could include things such as developing a comprehensive schematic of the business model and organization as well as the interactions between the various components, determining the competitive advantage and weaknesses of a new product before its rollout, or determining the feasibility of a new policy.

Step 2: Gather the Necessary Resources

During this stage, it is crucial to determine the resources that would be necessary for you to carry out the exercise, note which of these are accessible, gather these materials, verify the authenticity and reliability of this data, and what limitations you face in terms of data gathering and accuracy. It is also important to ensure that this data is gathered from different sources, perspectives, and levels of the organization to enable you to create a holistic SWOT analysis.

Step 3: Craft a List of Inferences Using the Data

After obtaining data from a wide range of sources, analyze these facts into helpful information and use them to form evidence-based observ–ations. For example, a business that has maintained a strong growth trajectory and a healthy balance sheet over the years can be said to have positive fiscal indicators.

This stage should be akin to a brainstorming session, with members from different divisions within the organization as well as external parties, being allowed to contribute significantly. At this stage, the focus is more on getting as many points as possible, rather than the relevancy or credibility of these inferences.

Step 4: Compile This Information Into the Relevant Sections

After making several key points such as the one above, each of these inferences should be arranged in the relevant sections (namely strengths, weaknesses, opportunities, and threats) using the general principles outlined in the article.

Step 5: Refine These Ideas

Here, the ideas which have been obtained are further refined and can be prioritized according to relevance and importance. Points that are less credible or only minimally important can as well be discarded, allowing you to craft a more concise schematic.

Step 6: Draw the SWOT Analysis Table

The final step is crafting a swot analysis table. This involves creating a matrix and dividing it into four sections. The internal factors (strengths and weaknesses) are listed above, with the strengths on the left and the weaknesses on the right. On the other hand, the external factors (opportunities and threats) are listed below, with opportunities on the left and threats on the right. Simply list your key points under the appropriate sections to complete the SWOT analysis.

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Step 7: Craft Your Strategy

This is not technically a part of the SWOT analysis technique; however, it is important to remember that the entire point of creating this analytic framework was to carry out a strategic management plan. This means that the business will set out a series of plans to meet the objectives which it has previously outlined, as well as create some reliable metrics or milestones which enable it to measure its progress toward achieving these goals.

SWOT Analysis Examples

To better understand how a SWOT analysis is created, let’s take a look at some examples of SWOT analysis. We’ll analyze three examples, the multinational activewear brand Nike , a hypothetical mom-and-pop diner called Joe’s Brooklyn Burgers, and another hypothetical scenario involving a new product rollout.

Large Company SWOT Analysis — Nike SWOT Analysis

From their iconic “swoosh” logo to their equally iconic range of footwear, Nike, Inc. is one of the most easily recognizable activewear brands in the world. While probably best known for its range of iconic footwear, most notably the Air Jordan brand of sneakers, Nike, Inc. is also a leading brand in other sports gear, such as activewear, sports equipment, and wearable fitness tech.

The Nike business model is famous for finding the perfect balance between fashion and functionality when it comes to their products, making them quite popular among both athletes and non-athletes alike. Let’s take a look through this Nike SWOT analysis , which was designed by our platform to figure out how the brand came to dominate the sportswear market.

• Solid brand equity: The brand has one of the most recognizable identities in the business world. Also, it commands solid brand equity (the commercial value of the public’s perception of its products or services). This is because the brand has cultivated a reputation associated with innovation, quality, and social justice;
• Low-cost manufacturing is a key part of its business model: Nike has invested heavily in low-cost manufacturing by outsourcing its manufacturing process to countries that have a favorable wage structure and investing in innovative technologies. This keeps costs low and profit margins high;
• Innovative marketing strategies: Through the smart use of celebrity endorsements, iconic marketing campaigns, effective use of social media, and iconic imagery like the Nike “swoosh” logo, the brand has aligned itself with positive associations such as innovation, stylishness, maximum performance, winning, and self-empowerment;
• Increasing direct-to-consumer sales: Nike has increased direct-to-consumer sales by cutting ties with its major retailers and investing in e-commerce. This increases its profit margin, brand visibility, and control over its image;
• Impressive R&D department: The company is well known for outspending its closest competitors in this area. It has introduced some of the most iconic developments in competitive sportswear, making it a favorite for many top athletes.
• Controversial labor practices: Several reports published in the late 1990s indicated that the low-cost manufacturing strategy used by Nike may have involved unethical labor practices such as poor working conditions, long working hours, and abysmal pay;
• The brand is too dependent on its U.S. market: Nike is seen as a global brand, but careful analysis shows a significant portion of its revenue comes from the U.S. market. This leaves the company vulnerable to market shocks or economic downturns within the U.S. market;
• Worrying about financial indicators: While Nike is still by far the most valuable sports apparel company in the world, recent worrying financial trends have been brought to the spotlight. One of them is the steadily increasing long-term debt profile of the company. It is also worrisome that the company’s profit margins have steadily declined over the past few years;
• Unfavorable relationship with retailers: Using third-party retailers exposes the company to some of the disadvantages associated with this strategy, such as lower profit margins, as well as less control over their branding, and the risk of counterfeit merchandise;
• Reduced quality control: One of the disadvantages of outsourcing your manufacturing process is that you have reduced control over the quality of your products. Outsourcing can also increase the risk of the market being flooded with counterfeit Nike products.

Opportunities

• Investing in new markets: Nike still has room to expand its role as a global market by making inroads into new markets, such as increasing their presence in Europe, Africa, and Asian markets outside of China;
• Diversify their product range: Another area the brand could look into is investing in sports technology, such as wearable sports gear like smartwatches and other forms of digital sports technology. They could also invest in promoting their other sports products besides footwear;
• Invest in new technologies: This includes examples such as anti-counterfeiting technology, green energy, and more efficient sportswear technology.
• Counterfeit Nike products: Counterfeit products reduce the trust customers have in brand quality and create a negative brand image. This is especially important for Nike because the brand is one of the most counterfeited in the world, with footwear being one of the most commonly faked products;
• Competition from other brands: Nike is significantly ahead of other sporting wear companies such as Adidas, Reebok, Under Armour, and Puma. However, some of these companies, such as Adidas, command a significant market share and pull in revenue that is indeed threatening Nike’s continued dominance of the industry;
• High-profile patent disputes: As one of the market leaders in terms of research and development, Nike fiercely protects its intellectual property, such as patents. Therefore, it was certainly newsworthy when the company got into a series of legal battles with its nearest competitor Adidas over accusations of patent infringement related to the Nike Flyknit technology;
• International trade tensions: As an international brand, Nike is exposed to the nuances of trade agreements, embargoes, protectionism, as well as trade tensions;
• Its competitors are investing more heavily in advertising: Nike spends more than its closest competitor Adidas on advertising, having spent approximately $3.8 billion on advertising in 2018 (less than 10% of its total revenue), while Adidas spent $3.5 billion (representing roughly 14% of its total revenue) in that same year.

The objective of this SWOT analysis was to identify the competitive advantage of the brand and educate readers on how the corporation came to dominate the world of activewear. This was identified to be its strong brand equity, low-cost manufacturing, heavy investment in innovative technologies, as well as improving direct-to-consumer sales.

Small Business SWOT Analysis — Bob’s Brooklyn Burgers

Next, let’s take a look at a SWOT analysis for a small, independent restaurant called Bob’s Brooklyn Burgers. This will allow us to examine how the SWOT analysis of a small business differs from that of a large multinational corporation.

Our hypothetical business is a small, family-owned diner based in Brooklyn that caters to a number of local customers and offers a unique Brooklyn-themed menu. The business has been operating successfully over several decades but has run into some lean times in recent years. Let’s examine the SWOT analysis of this business to better understand the issues it faces and as well craft a brief outline of how it can reclaim its former glory.

Proximity to customers. One of the advantages of being a locally popular restaurant is that they are closer to their customers, which gives them local dominance as well as an advantage over franchised restaurants that may be located further away.

• They offer a great customer experience: The restaurant offers amazing customer service due to the personalized nature of its services, its familiarity with regular customers as well as its unique branding style, which resonates with locals;
• The restaurant is known for its top-notch cuisine: One advantage the diner enjoys as a small independent restaurant is greater control over its supply chains and, by extension, greater control over the quality of its ingredients and food. This means that the restaurant can offer higher cuisine than fast-food restaurants;
• The establishment has a great reputation: Bob’s Brooklyn Burgers has been a trusted part of the community for over two decades and has built a reputation for itself as a great local destination for top-notch cuisine as well as an enjoyable dining experience. Not only does this help it retain its pool of loyal clientele, but it has also transformed the location into a local hotspot for tourists and NY-themed food enthusiasts;
• Their small size offers them a greater degree of flexibility: Another key advantage enjoyed by the restaurant is the advantage that being a small, independent business offers in terms of flexibility. This allows for quicker decision-making and rapid changes in internal policies to deal with new challenges. It also allows the business to take more risks in the form of pivots and brand adjustments due to a more streamlined decision-making process;
• A strong workplace culture: As we mentioned earlier, Bob’s Brooklyn Burgers is a family-owned establishment. A significant number of employees are either directly related to the owner or close associates, and have worked at the establishment for years. This creates a positive work environment due to their familiarity with each other and experiences working together, which in turn increases efficiency and enhances customer satisfaction.
• Low-profit margin: Despite its popularity and great reputation, due to several factors, including mounting debt, poor financial management, and rising labor costs, the restaurant has been operating on an increasingly thin profit margin. This poses a significant challenge to the growth and continued existence of the business if not properly addressed either through increasing revenue or cutting down costs;
• Lack of professional services: Similar to most small businesses, the diner suffers from a lack of professional expertise in certain areas such as marketing, accounting as well as legal services. Therefore, these services are often carried out by untrained staff, thereby reducing efficiency and driving up costs in terms of both man-hours lost and monetary losses;
• Poor management: Despite the best efforts of its management staff, the diner has been suffering from poor oversight and a range of conflicting internal policies, which have reduced the overall efficiency of the business;
• Lack of professional hiring practices: Bob’s Brooklyn Burgers is a family-owned establishment and thus maintains a rather informal hiring process. While this may create a familiar, friendly, and cozy working environment, it does so at the cost of hiring the best possible staff. This leads to employing personnel who may not be optimally suited for certain roles, as well as makes the process of letting go of staff difficult;
• Higher per unit costs: The business also runs higher per unit costs than larger restaurant franchises that enjoy the advantages of economies of scale as well as bulk purchases. This further drives up operating costs and reduces the profit margins of the business.
• Outsourcing some of its key operations: Bob’s Brooklyn Burgers would do well to outsource several specialized functions within its business operation, such as advertising and marketing, accounting, and legal services. Not only will they enjoy increased efficiency by allowing professionals to handle these tasks, but it also allows both staff and management to focus on tasks for which they are better suited;
• Further expansion and scaling: Even though the business is quite successful locally, there is still much potential for expansion. It can capitalize on its popularity and positive reputation to build similarly themed restaurants and other iconic locations both within and outside the state;
• Diversification: Currently, the restaurant operates using a limited menu. While this is adequate for most local clientele, expanding the menu may attract more customers as well, this allows the restaurant to diversify and keep up with changing customer preferences;
• Expanding into online food delivery: Bob’s Brooklyn Burgers does not currently operate an online food delivery service. Creating such a service will increase its reach, further expanding its customer base and, by extension, revenue;
• Investing in a strong social media presence: Bob’s Brooklyn Burgers has not yet invested in the power of social media as a marketing tool as well as a customer channel which will allow them to reach out to a much broader and more diverse customer base.
• Changing government health regulations: Certain local legislation introduced by the state government has made it harder and more expensive for the business to source certain ingredients. This has driven up costs, further restricted their menu, and reduced their profit margin;
• Increasing competition from other dining establishments: The business has been facing increasing competition from both fast-food franchises and independent restaurants. This is a significant challenge to their local dominance and has eaten into their market share and, by extension, revenue;
• Lack of adequate access to capital: Small businesses such as Bob’s Brooklyn Burgers have a harder time accessing capital than larger franchises and businesses. This makes it harder for them to expand and also puts them in a more difficult situation during times of significant reductions in revenue, such as a global pandemic.

The objective of this SWOT analysis was to determine the issues plaguing the diner and help it design a strategy to improve its current business model. To achieve this, a matching and converting strategy will be used. This means that we will attempt to combine the strengths and opportunities of the business while converting the weaknesses and threats into positive indicators, or at least reducing their negative effects.

First of all, the company can outsource the various professional services listed above in order to enable it to focus on the parts of the business operation where it has a significant advantage over its competitors. This includes providing a top-notch customer experience as well as cooking top-quality meals.

Another option they could look into is utilizing the reach of social media as an avenue to build a strong online food delivery service. The fact that many of their customers are local and live relatively close to the establishment also makes this feasible. This also has the added advantage of diversifying their revenue stream .

Lastly, the company can focus on using its reputation for providing great meals as a focal point for expanding into new territories and new markets.

Product Rollout SWOT Analysis — The Turbo 2000 Product Rollout

Now that we have discussed how to perform a SWOT analysis on both large and small companies, let’s focus on the last example in this article: How to perform a SWOT analysis on a hypothetical product launch.

For this example, we will perform a SWOT analysis on the rollout of a hypothetical high-end gas stove known as the Turbo Burner 2000. This example will highlight the competitive advantage of the product as well as the challenges it may face during its launch.

• The product is coming from a well-trusted brand: One of the advantages enjoyed by the Turbo Burner 2000 is that the product comes from a well-respected company with strong brand equity and a reputation for making top-notch cooking appliances. This will boost consumer confidence and encourage more people to purchase the product;
• It makes use of revolutionary cooking ware technology: The product incorporates revolutionary gas stove technology and has been found to increase thermal efficiency and reduce fuel consumption. This helps cut down costs in the long run, shorten cooking time, reduce emissions, and enhance customer satisfaction with the entire process;
• Targeted branding and marketing: The company has created a niche for itself and is the go-to brand for high-end cooking appliances and equipment. They cater to a range of customers who may require such products, including professional chefs, restaurants, and middle- to upper-class cooking enthusiasts. 

Catering to a narrow niche allows them to better target their branding efforts and increase their profit margin by focusing resources on their key market, which reduces their customer acquisition cost. It also creates an impression of exclusivity, which only serves to further drive up the image of the company as a luxury brand;

• Improved product design and ergonomics: The new product has a more ergonomic design than its predecessor and is very user-friendly. It is made from lighter materials, making it more portable as well as compact. There are also more useful functions, such as a sleeker self-lighting feature, color-coded indicator lights, and a more sensitive temperature control;
• Backed by a company in a strong financial position: The parent company of the product is currently enjoying a strong financial position, which helps them to financially support the launch of the new product in terms of marketing and advertising;
• Very successful first model: The first model (the Turbo Burner 1000) was a massive success within the cooking industry and likely encouraged many buyers to upgrade to the newer model.
• The product is quite expensive: The Turbo Burner 2000 is quite costly for a gas stove, and this is likely going to scare off most buyers except professionals and cooking enthusiasts;
• It is seen as a luxury good: Even though gas stoves are used by people of all economic backgrounds, the price of the product, its marketing strategy, as well as the reputation of its parent brand has given it the image of a luxury product. This may alienate some buyers from utilizing the product, as well as runs the risk of creating a negative association with the brand;
• It is marketed to a narrow niche: While there are several advantages that come with targeting your product at a narrow portion of the market, there are also some drawbacks as well. First of all, it reduces your reach and may alienate a range of potential customers, leading to less actualized revenue. It also increases your vulnerability to rapid changes in market conditions and consumer sentiment, as your income is significantly less diversified;
• Costly R&D and marketing: The Turbo Burner 2000 is a top-notch product and required significant investment in R&D to design. Also, although the company caters to a much narrower niche than most competitors, its Customer Acquisition Costs are much higher.
• Expand its market share by offering cheaper versions: The brand could seek to diversify its business model by offering a range of cheaper alternatives to the standard model. This opens up the business to new customers and by extension increases its potential revenue. It also reduces their vulnerability to sudden shifts in market sentiment;
• Focusing on further innovation: The parent brand has a strong reputation for being an innovative powerhouse in the industry and can capitalize on the strong R&D department it has built to create more innovative technologies and improve on existing designs. This will help keep it a step ahead of its competitors and also increase the reputation of the brand as an innovator within the industry;
• Investing in sustainability: The fossil fuel industry has been under pressure in recent years and, by extension, materials and equipment are driven by fossil fuels. Investing in technologies and technologies that increase the eco-friendliness of the product is a great way to boost positive consumer associations with the brand;
• Increased supply chain efficiencies: By investing in improving the efficiency of its supply chain, the company can further drive down the cost of individual units of the product, increasing sales and also improving its profit margin as well.
• Supply chain disruptions: Significant disruptions to the supply chain of the product may lead to a wide variety of issues such as increased cost per unit as well as reduced production capacity. Overall, this may negatively affect the price or availability of the product and by extension its introduction into the market;
• Changing consumer sentiment: With more consumer interest in climate change and sustainable technologies, the fossil fuel industry and other industries which are dependent on it have attracted much criticism. For example, there has been increasing concern among consumers concerning the long-term health effects of cooking gas and its links to a range of chronic illnesses;
• Changing macroeconomics: Rapid changes in macroeconomics such as recessions and rapid rises in inflation weaken the purchasing power of buyers. This may affect the ability of a lot of individuals to purchase consumer goods such as high-end gas stoves;
• The success of the initial rollout. The widespread success of the first model may discourage buyers from upgrading to the newer product, even with the improved specifications.

Performing a SWOT analysis may be one of the most important activities that any business can carry out within its lifetime. Whether this is done regularly or just as a one-time evaluation, understanding how to get the best out of the technique is key to fully utilizing the benefits and understanding the limitations of the technique.

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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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Swot analysis guide: powerful examples and a free template.

Table of Contents

What is a SWOT Analysis

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.

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.

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?

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.

Pros of SWOT Analysis

Cons of swot analysis, 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.

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

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.

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

Internal factors.

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

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

External Factors

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.

Home Depot Example

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.

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.

Step 1: Gather Data

Financial statements, 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

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.

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.

Unique Features

Step 4: analyze weaknesses.

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

Decision-making, 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

Step 7: construct an action plan + implement solutions, 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.

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

Marketing swot analysis, 3. company swot analysis example, 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

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.

Don’t be Afraid

Ask for feedback, 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.

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Learn business abbreviations and acronyms, the takeaways.

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

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What Is SWOT Analysis?

Understanding swot analysis, how to do a swot analysis.

• Common Mistakes

The Bottom Line

• Fundamental Analysis

How to Perform a SWOT Analysis

These frameworks are essential to fundamentally analyzing companies

Ariel Courage is an experienced editor, researcher, and former fact-checker. She has performed editing and fact-checking work for several leading finance publications, including The Motley Fool and Passport to Wall Street.

SWOT (strengths, weaknesses, opportunities, and threats) analysis is a framework used to evaluate a company's competitive position and to develop strategic planning. SWOT analysis assesses internal and external factors, as well as current and future potential. A SWOT analysis is designed to facilitate a realistic, fact-based, data-driven look at the strengths and weaknesses of an organization, initiatives, or within its industry.

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 from internal sources (strengths or weaknesses of the specific company) and external forces that may have uncontrollable impacts on decisions (opportunities and threats).
• SWOT analysis works best when diverse groups or voices within an organization can provide realistic data points rather than prescribed messaging.
• The findings of a SWOT analysis are often synthesized to support a single objective or decision that a company is facing.

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.

Common Mistakes When Preparing SWOT Analysis

When preparing a SWOT analysis, several common mistakes can undermine its effectiveness. Let's take a look at some ways your SWOT analysis may go awry.

One easy error to make when preparing a SWOT analysis is failing to be objective and honest in the assessment. Companies often tend to overemphasize their strengths while downplaying weaknesses, resulting in an overly optimistic and unrealistic analysis. This bias can lead to missed opportunities for improvement and leave the organization vulnerable to unforeseen threats. As difficult as it may be to be honest in your analysis, the validity of underlying assumptions is the cornerstone of how useful the SWOT analysis will be.

Another significant mistake is conducting the analysis in isolation, without input from diverse key stakeholders . You should try get to input from employees at various levels, customers, suppliers, and industry experts. Each may have a unique view of your company, and each may come up with different items to be listed in each quadrant based on how they specifically interact with the company.

Yet another common pitfall is neglecting to prioritize or weight the factors identified in the SWOT analysis. Not all strengths, weaknesses, opportunities, and threats are equally important or impactful. Failing to distinguish between major and minor factors can lead to misallocation of resources and misguided strategic decisions. It can be easy for the important items to be buried if too many non-material items are identified.

Another frequent error is treating the SWOT analysis as a one-time exercise. You should be prepared to do a SWOT analysis periodically, The business environment is constantly changing, and a SWOT analysis should be regularly updated to remain relevant. In addition, the analysis itself is just the beginning; its true value lies in using the findings to develop and implement strategic actions. You can then check future SWOT analysis to make sure the company is addressing the major points.

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 considerations. 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

Let's perform a SWOT analysis together by analyzing the strengths, weaknesses, opportunities, and threats of Tesla.

• Strengths: Tesla has a strong position in the EV market because of its strong brand recognition as an industry pioneer. The company's advanced battery technology allows for superior range in its vehicles. Tesla's extensive Supercharger network also provides a significant advantage in terms of charging infrastructure.
• Weaknesses: Tesla has struggled with production capacity limitations, often failing to meet demand and delivery targets. Quality control issues have also been a recurring problem from time to time. Tesla's vehicles are generally priced higher than those of competitors, which may limit market penetration in more price-sensitive regions.
• Opportunities: Tesla stands to benefit from the growing global demand for electric vehicles. The company has opportunities to expand beyond automotive into related fields such as energy storage and solar power, leveraging its battery expertise. The development of autonomous driving technology also presents another significant growth avenue, as Tesla has already begun implementing self-driving cars. Additionally, Tesla has the potential to tap into large, emerging markets like China and India where EV adoption could accelerate where it hasn't already.
• Threats: The competitive landscape for Tesla is intensifying as traditional automakers and new entrants invest heavily in electric vehicle technology. This increased competition could erode Tesla's market share and profit margins. Economic factors such as economic downturns could impact sales of Tesla's primarily luxury-oriented vehicles. The company also faces risks related to supply chain disruptions, particularly for critical materials used in battery production where it may already have manufacturing constraints.

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.

What Are the Limitations of SWOT Analysis?

While SWOT analysis is a powerful tool, it does have some limitations. It can sometimes oversimplify complex situations and is susceptible to the subjectivity and bias of participants. The analysis also doesn't provide specific guidance on how to address identified issues and can lead to analysis paralysis if not followed by concrete action.

A SWOT analysis is a great way to guide business-strategy meetings. It's powerful to have everyone in the room discuss the company's core strengths and weaknesses, define the opportunities and threats, and brainstorm ideas. Oftentimes, the SWOT analysis you envision before the session changes throughout to reflect factors you were unaware of and would never have captured if not for the group’s input.

A company can use a SWOT for overall business strategy sessions or for a specific segment such as marketing, production, or sales. This way, you can see how the overall strategy developed from the SWOT analysis will filter down to the segments below before committing to it. You can also work in reverse with a segment-specific SWOT analysis that feeds into an overall SWOT analysis.

Although a useful planning tool, SWOT has limitations. It is one of several business planning techniques to consider and should not be used alone. Also, each point listed within the categories is not prioritized the same. SWOT does not account for the differences in weight. Therefore, a deeper analysis is needed, using another planning technique.

Business News Daily. " SWOT Analysis: What It Is and When to Use It ."

Tesla. " Supercharger ."

Reuters. " Tesla Quarterly Deliveries Decline for the First Time in Nearly Four Years ."

Tesla. " Autopilot and Full Self-Driving Capability ."

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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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What Is A SWOT Analysis? A Thorough Explanation With Examples

Ted Jackson

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

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

Table of Contents

Historically, corporate planning has always been difficult. Many organizations have failed at trying to get everyone on the same page and agree to the details of a plan—more often than not, their efforts proved to be both ineffective and time consuming. Something had to be done.

What is a SWOT analysis?

Albert Humphrey of the Stanford Research Institute determined in the 1960s to identify why corporate planning consistently failed. Thus the origination of the SWOT analysis. Today, the SWOT analysis is one of the most important concepts in the business world and is widely used by all types of organizations to help build a strategic plan.

So, what is a SWOT analysis, how do you create one, and what do you do with it? In this article, we’ll explain it all (and share some SWOT analysis examples to boot) from start to finish.

A SWOT analysis is a high-level strategic planning model that helps organizations identify where they’re doing well and where they can improve, both from an internal and an external perspective. SWOT is an acronym for “Strengths, Weaknesses, Opportunities, and Threats.

SWOT works because it helps you evaluate your business by considering multiple factors:

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

Organizations use SWOT to plot out a future course that plays on their strengths and minimizes risks. Taking the time to look at your organization from different perspectives and honestly assess your future prospects is a worthwhile activity; the insights you glean as a result you should then use constructively as part of the strategic planning process.

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How to do a swot analysis.

To help you get started, we’ve created this step-by-step SWOT analysis template. The examples below are specific to the airline industry (since that’s the example we use in our grid), but the SWOT analysis exercise is applicable to all businesses.

You’ll notice we divided our hypothetical examples for strengths, weaknesses, opportunities, and threats based on the four Balanced Scorecard perspectives. You don’t have to use the Balanced Scorecard to be successful with your SWOT analysis, but this method does provide a strong framework for your discussion.

Not using the Balanced Scorecard? Look to the guiding principles of whatever strategic management framework you are using for ways to think about your business. For example, the VRIO framework emphasizes value, rarity, imitability, and organization; you can conduct a SWOT analysis through the lens of these criteria instead.

1. Create a SWOT matrix

This is the grid-like matrix that will house the information you gather. As you can see in the SWOT analysis template below, each quadrant features one of the four elements you’ll be focusing on—strengths, weaknesses, opportunities, and threats. Using a matrix helps present your findings in a clear, easy-to-understand way.

2. Gather the right participants

Pull people from all departments to participate in the analysis. Your entire leadership team should be involved because they can provide a broad view of the organization and offer insight into the competitive landscape.

But having lots of different perspectives is beneficial, and that means including leaders from every department—and anyone else you think might have valuable input. The more diverse the group, the better insights you’ll generate.

Not all ideas will make it to the final list, but it’s important to consider them all.

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3. list your strengths.

Ask the group: What are we good at? How are we better than our competitors? These are broad questions, but in the beginning stages of your discussion, you should accept all answers.

Examine these questions in relation to the Balanced Scorecard perspectives. For the fictional company Upward Airlines, the discussion might look like this:

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

Having considered these questions for your own organization, you might come up with multiple responses in some categories. Below is a sample of the strengths portion of the SWOT analysis for Upward Airlines:

TIP: As mentioned above, you can use ClearPoint to simplify this and the remaining information-gathering steps. Rather than asking everyone to brainstorm simultaneously in a conference room, give people time to review relevant data (also housed in ClearPoint) that would help identify strengths and weaknesses, as well as potential opportunities. Participants can then input their thoughts into ClearPoint, link to key supporting metrics, and even add contextual information surrounding their thought process.

Doing your analysis within a single tool not only makes it easier to collect the information but also gives you the visibility to see how the various components that make up your SWOT might be linked. Further, ClearPoint has a discussion feature that allows users to @ mention other users, and thus facilitates conversations about your strengths and weaknesses.

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4. list your weaknesses.

Ask the group: What are we not good at? Where can we grow? What are we lacking? The Upward Airlines discussion might look like this:

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

5. Identify your opportunities

Ask the group: Where do we see big (and small) possibilities for our organization? What do we see happening in the future?

The Upward Airlines group might discuss the following:

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

Upward Airlines’ opportunities for the foreseeable future might be:

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6. identify your potential threats.

Ask the group: What do we see as a threat? What obstacles do we anticipate? What is changing that could hurt us? As a travel-related company in a tough economy, Upward Airlines might uncover a number of potential threats:

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

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

7. Examine your matrix for connections

In looking at your SWOT matrix, do some of your strengths naturally support the identified opportunities? If you eliminate weaknesses, would that present additional opportunities?

At this point, we recommend running a “brown paper exercise”—print your SWOT matrix in large size, and ask employees to add post-it notes in any or all of the matrix’s four boxes if they feel the leadership team missed something. (You can also ask employees to add their names next to their suggestions so leadership can follow up with them.) Not only is this exercise great for inter-office discussion, but it also gives leaders the chance to consider opinions from staff in the field.

Done correctly, the SWOT analysis is another valuable tool in your toolbox for improving business performance and minimizing threats and weaknesses going forward. It can also prompt organizations to be more innovative with their strategy—new ideas may emerge that leadership would not normally have considered without such a thorough examination of the business from all angles.

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Complement your swot with a pest analysis.

A SWOT analysis is a way of understanding and evaluating all facets of your company so you’re in a better position to make decisions about the future. But there are also external factors that will impact your company’s future; these things are beyond your control but still require consideration as you map out your strategy.

That’s why many organizations choose to complement a SWOT analysis with a PEST analysis—together, they provide a complete picture of your business environment for effective strategic planning.

PEST stands for political, economic, social, and technological—the four key areas outside your business that are likely to impact it. These factors tend to play out over long time frames. An economic slowdown, for instance, could take years to resolve, but you can take action to address staff training issues fairly quickly.

Thus, a PEST analysis is more valuable than SWOT when it comes to formulating longer-term plans and business strategies. Our recommendation is to do a SWOT analysis first, followed by a PEST analysis, to get a complete picture of the business landscape.

What Should You Do with Your SWOT Analysis?

Congratulations! Hopefully, you understand your business a little better after completing your SWOT analysis; now it’s time to put those insights to good use. Your ideas on how to use your strengths and overcome your weaknesses should inform your strategy.

Developing a strategy is in and of itself a big step. It involves defining objectives for your company to move toward, creating priority initiatives (projects) to help make them a reality, and identifying measures to make sure the strategy is unfolding the way it should.

Our Upward Airlines SWOT analysis example, for instance, lists four weaknesses:

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

Some of these weaknesses are easier to address than others, such as improving employee satisfaction and your project management practices. Others, like the lack of direct travel routes, may be difficult to address in a time when airlines are still recovering from the COVID-19 fallout and profits are low. Similarly, you want to continue supporting your current strengths.

While you shouldn’t let your excellent training program lapse, it needn’t be a focus if you expect the number of new hires over the next year to be low. However, improving your virtual communication practices will most likely prove to be beneficial moving forward.

Therefore, the Upward Airlines SWOT analysis above might drive strategy in the following ways:

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

Make sure there is a clear and strong link between your SWOT analysis and your strategy map. For example, if you’re a for-profit organization, your financial perspective will be the top priority—build your analysis into your map in a manner that drives those finances in the right direction.

Maybe your SWOT analysis foretold an opportunity to hit a new line of business or forecast that a line of business would dry up. Your strategy needs to reflect that information.

If you’re using ClearPoint for strategy execution, you can make sure the projects you initiate as a result of your SWOT will actually have an impact by a) creating links within the software to show clear connections between projects and objectives, and b) tracking progress on your goals and initiatives over time.

That way, you’ll be able to see if, for example, your revised capacity plan positively impacted revenue in any substantial way—or if it had a negative effect on the bottom line. If you’re continuously monitoring progress, you’ll be able to adjust your course of action in a timely manner if needed.

Those insights will also be useful for your next SWOT analysis.

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Real-world swot analysis examples.

Still uncertain as to how your team can use the information produced by a SWOT analysis? We reached out to the business community to ask about their experiences with SWOT.

Their answers, listed below, show that SWOT can be applied to any number of business activities, from developing a long-term overall strategy to launching campaigns, new products, and more.

Seize New Opportunities

"We focus on the opportunity aspect of SWOT. We are always looking to find new ways of growing our company, and we use this analysis to show us areas where our business might thrive. A SWOT analysis showed us how important it would be for us to partner with over 15 different insurance companies, so that we can freely match each client with whichever one is best for them. Most companies like ours only work with one or two companies, but we have seized the opportunity, and we are growing because of it."

—Anthony Martin of Choice Mutual

"We took action to understand that it's not enough to simply have a great product; we need to make sure our customers know how it can help them. By servicing the market, we found ways to add value for our customers and build relationships with them by providing helpful resources on our website and offering free trials. This has helped us to focus on creating and providing value to our customers, rather than just trying to get them to buy our product. As a result, we've created a much more sustainable and successful business."

—Diana Stepanova of Monitask

"One of the most important things that came out of our SWOT analysis was identifying untapped opportunities. After changing the game with our magnetic lashes, we saw a gap in the acrylic nail market. Through a SWOT analysis, we have realized our strength in reimagining highly used beauty products and making them better for the consumer. That has opened up even more opportunities to revolutionize the billion-dollar beauty industry."

—Ann McFerran of Glamnetic

"Our SWOT analysis revealed that we could create additional revenue streams by white-labeling our writing service and marketing it to other agencies. We offered interested parties discounts on our already-competitive rates, which made working with us very attractive and profitable for both sides. This allowed us to effectively double the size of our market. Most of the work we do now is for our agency partners, which means we can spend less time chasing sales and instead focus on ensuring quality in our service."

—Milo Cruz of Freelance Writing Jobs

“The best insight I gained from performing a SWOT analysis of my organization is that we are very good at what we do and have a lot of growth potential. One action that we took because of this insight was to expand our product line. We now offer various [photo] backdrops, including some specifically designed for events. We have also started marketing to new customers, which has helped us grow our business.At first, we didn't think that expanding our product line would help us much, but it has been one of the best things we've done for our business. It's enabled us to attract new customers and grow our sales. Marketing to new customers has also been helpful in terms of growing our business. These actions have made us a more prosperous and well-rounded company. "

—Kate Zhang of Kate Backdrop

Evaluate Your Competitive Advantage

"The SWOT analysis helped us identify potential opportunities that were unique to us in terms of reach. This allowed us to focus on key areas and strategies that would allow us to be the go-to choice of a specific market."Knowing where your company stands in relation to its competitors is crucial for developing strategies that will give you a competitive advantage. It also gives you insight into your unique opportunities that your competitors may not have. This is the kind of information that can help you make decisions that will take your company to the next level."

—Linda Shaffer of Checkr

"There are many roofing contractors competing for business, and it can be difficult for customers to understand what sets us apart from the rest. In order to address this issue, we have revamped our marketing materials to better communicate our unique selling points.As a result, potential customers can now see that our company is the best choice for quality roofing services, and we have experienced a significant increase in sales."

—Marty Ford of BulletpRoof Roof Systems Ltd.

“Owners of startups and small businesses need, but cannot find, a system to start, market, operate, or finance a business. Through our SWOT analysis, we noticed that our competitors left important questions and needs unanswered. For example, a competitor might help you set up a corporation, but have nothing for you after that.You started the business, but now need marketing, operational, or finance help. We strive to be the entrepreneur's best friend by giving you the needed tools."

—James Chittenden of One Click Advisor

Learn Business Strengths

"SWOT analysis was incredibly helpful when it came to understanding the strengths of my business. I was then able to play to those strengths and build on them.One strength was integrity—my business is always honest—and I’ve built that honesty into our brand."

—Keith Terrell of Backpacks Global

"Overcoming our weaknesses doesn't mean we are not keeping an eye on our existing strengths. If there's one thing SWOT analysis has taught us, it’s that we should treasure the things that keep our company strong by being innovative. Our positive attributes can become a weakness if we refuse to adapt to changes. Consistently monitoring our strengths has allowed us to hit all our targets and go beyond our goals. As a result, we have outperformed our competitors by always bringing something new to the table."

—Adam Garcia of The Stock Dork

Address Future Business Challenges

"Two of the issues we identified were the great resignation and the recession. Knowing them in advance gave us plenty of time to make the necessary changes (like retaining your best employees by offering new benefits—remote work, PTO, and unlimited growth opportunities). We also changed our inventory strategy and made sure we had enough to counter the price increases, shortages, and demand.These strategy changes helped us limit the adverse effects of the recession, optimize our stocks, and make sure all our orders were fulfilled on time. The changes were also able to help us retain our best employees; thus, we never even had any problems throughout the great resignation."

—Michael Perry of Fitness Fixed Gear

Shore up Weaknesses

"In our SWOT analysis, we were able to pinpoint areas where our employees may be lacking the skills they needed to succeed in our company. We decided to offer free online learning to our workers to help them add to their skill set.This has helped us not only improve the skill sets of our employees, but it has also increased employee retention. Employees want to stay loyal to a company that helps them grow."

—Mark Daoust of Quiet Light

"Prior to the SWOT analysis, I had always approached marketing from a product-centric perspective; however, the SWOT analysis made me realize that we needed to focus more on customer-centric marketing. We needed to connect with our target audience and build relationships with them.As a result, we've made some changes to our marketing approach, and I believe that these changes will help us to be more successful in the long run."

—Jacob Villa of Authority

"We have always prided ourselves on having good client relationships, but this exercise showed us that we needed to have strong client relationships. We have studied our weakness (why we have monthly policy cancellations or non-renewals) and the results showed that we need to focus on building and maintaining client relationships. After doing that, we have seen a significant increase in the average tenure of our clients and customer satisfaction scores."

—Loran Marmes of Medicare Solutions Team

"One threat we encountered in our business was the sudden and huge dip in our customer satisfaction score, which has never happened in the past five years. To resolve this issue and ensure we eliminate the threat that's harming our relationship with customers, we allocated time to engage with our employees and immediately gave them intensive customer service training.Our urgent action to eradicate this threat has helped our business bounce back and we’ve regained the trust of our customers. It has also taught us to listen to customer feedback seriously and do our best to live up to their expectations."

—Jake Smith of Absolute Reg LTD

See Different Perspectives

"A successful SWOT analysis encourages discussion from employees of different levels, from operational, to managerial, to administrative level. By doing this, everyone contributes their thoughts on the status and standing of the company—it’s not just about how one person sees it. This way, all aspects of the business are considered and addressed from all levels."

—Corey Morgan of Kind Home Painting

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Swot analysis best practices.

To create the most accurate and effective SWOT analysis, we recommend the following best practices:

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

If you need some guidance with this process, download our free strategic planning booklet. It includes eight of the most popular templates to build strategic plans, including a SWOT analysis template.

The strategic plan you develop from your SWOT analysis is powerful, so once you’ve created it, don’t let it sit! Use strategy execution software like ClearPoint to track your progress over time.

Optimize Your Strategic Planning with ClearPoint

Undertaking a SWOT analysis requires planning and organization; it can also be a lengthy process. For those reasons, we recommend treating it like a project. If you already have project management (PM) software, by all means use it.

If you don’t have software (or if you’re considering making a change), we encourage you to take a look at ClearPoint. It’s ideal for keeping individual projects on track, but it also does much more than that— it shows you how important projects impact your organization’s overall strategy. Are your projects moving the needle when it comes to your larger goals? That’s an important aspect of project management you can’t get with any other PM tool.

Viewing your SWOT analysis as a project within ClearPoint has multiple benefits:

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

Another benefit of treating your SWOT analysis as a project in ClearPoint: You won’t have to reinvent the wheel every time you repeat the process. You can just duplicate the framework, make any necessary adjustments, and then repeat the process as before, even comparing your newest SWOT to the previous analysis if necessary.

Below is a screenshot of what it might look like to set up a SWOT analysis as a project within ClearPoint, with some sample milestones shown.

Ready to streamline your SWOT analysis and take your strategic planning to the next level? ClearPoint Strategy is here to guide you. Our comprehensive software solution simplifies the SWOT analysis process, ensuring you gain valuable insights and effectively integrate them into your strategic plan.

Book a personalized demo with our experts and see how our software can help you efficiently conduct SWOT analyses, track progress, and achieve your strategic goals.

Frequently Asked Questions

What are the 4 dimensions of swot analysis.

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

When and where should you develop a SWOT analysis?

You need a few uninterrupted hours to conduct a strong SWOT analysis. You should conduct a SWOT analysis around the same time of your strategy refresh. Include key leaders within the company to get comprehensive insights on the current state of your business.

How do you use your SWOT analysis?

Use your SWOT analysis to influence your strategic plan! Don't let the insights from your SWOT analysis just sit in a shelf. Learn how to utilize your strengths to achieve your long-term goals, and make plans to strengthen your weaknesses.

Why should I conduct a SWOT analysis?

A SWOT analysis offers many benefits for your organization. It allows you to better understand your business. By taking the time to identify where your company succeeds, and where they struggle, you can create plans to leverage your strengths and mitigate risks in your weaknesses.

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

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

What are the benefits of using SWOT analysis?

The benefits of using SWOT analysis include:

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

How can SWOT analysis help your business?

SWOT analysis can help your business by:

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

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

Common mistakes to avoid when conducting a SWOT analysis include:

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

How often should you conduct a SWOT analysis?

You should conduct a SWOT analysis:

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

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

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

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

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How to Write a SWOT Analysis Report for Business Plan [Sample Template]

Writing a SWOT analysis is the first step to writing a business plan. Without any doubt, the number one secret of a successful business is planning, and more specifically writing your own business plan. But before you begin planning, you should make sure that you understand your business, your competitive environment and what it is going to take to be successful.

In his book “ The Art of War ”, an ancient general known as Sun Su said that if you know your enemy and know yourself, you need not fear the result of a hundred battles, if you know yourself but not the enemy, for every victory gained you will suffer a defeat and if you know neither the enemy nor yourself, you will succumb in every battle.

With the above analogy, he created a sort of SWOT analysis that will allow you to see yourself and your enemy or competitors more clearly. A lot of small business owners only see just a small part of their competitive environment.

They make decisions at a snap based on what seems to them to be the biggest issue or problem in front of them or they buy equipment thinking that they know their market and then end up not being able to pay for it. In addition, almost every lender or investor will want to make sure that they see the whole picture before they will be willing to part with their money. Before you make any decision you should be sure that you see everything.

What is SWOT Analysis?

SWOT stands for strengths, weaknesses, opportunities and threats and just like its name implies, it tends to review those four aforementioned parameters. SWOT analysis provides an avenue by which the management team identifies the internal and external factors that will affect how the company performs and ultimately its future.

A businesses strengths and weaknesses constitute its internal factors while the opportunities and threats faced by the business makes up its external or environmental factors.

SWOT analysis is done as part of the overall corporate planning process in which financial and operational goals are set for the upcoming year and strategies are created to accomplish these goals. It is also a very important and crucial ingredient in a business plan.

1. Strengths

Strengths refer to those things that a company does that provides it with . It is those things that a company can do which no other company does better than them. It includes what the company is known for.

For instance, for a company like Walmart, one of its main strengths is the fact that they are able to maintain very low cost. This allows them to price their products much lower than a lot of their competitors can because they have the ability to keep their costs low.

Positive brand recognition is also another very good example of strength . Some companies are well known. When you see their image and logo, it evokes positive emotions in you about that brand in particular. These types of companies just have to put their logo on a particular brand and people will buy it just because they have strong brand recognition. They are viewed positively because they are known for the quality they possess.

Yet another example is a skilled work force . This is a very significant strength in the sense that human resources is to a large part the greatest asset that most companies can have. Good employees are hard to come by and employers that can retain their workers and continually train them use it as a competitive advantage. A good example of a company that has this is Costco. They have a well-known reputation of having longer tenure track than most other industries in the same area.

Normally in the retail industry, if you want to maintain low prices , you will have to maintain lower costs which usually means that you will not pay your staff very significantly. Costco on the other hand has done something that is quite different from the norm in that industry.

They pay high wages for the industry, they also offer benefits for part time employees and they also have a lot of other attractive perks that other companies in the line do not offer. This provides them with a benefit of having workers that stay there longer. If workers stay in a particular work for a longer period, they will ultimately get better at what they do.

An employee who has stayed in a business for 3 to 5 years will definitely be better at the job than an employee who has stayed for less than a year in a particular work. This also allows the management to save more money that would have been used to hire and train new staff. Other strengths include access to financial resources, intellectual property, cost advantage et al.

2. Weaknesses

Weaknesses are the things that a company does that are not necessarily positive and could potentially be a liability for them. Sometimes when a factor is not a strength, it may tend to be a weakness. Poor customer service constitutes a significant weakness for a company because it may affect the rate at which future customers will go to that company to purchase their products or services especially if they have heard about someone having a bad experience with them in the past.

Expiring intellectual properties, patents, trademarks and copy rights are also weaknesses . Rising cost is also a major weakness because it will reduce the profit margin of a company. Having an unskilled workforce also provides a weakness because you will have to commit multiple resources to training.

And of course, lack of financial resources can be a major weakness for a company. Just because something is a weakness for a company does not mean that it has to keep being that way. The company can devote more time and resources to reverse this negative trend.

3. Opportunities and Threats

Opportunities and threats are considered to be external to a company because the company cannot necessarily affect or change these elements. These things just happen and it is up to the company to try to recognize an opportunity. If they are able to recognize an opportunity, that can serve as a potential avenue for growth and profitability.

If an opportunity is not ceased, it can quickly turn into a threat. One of the most notable opportunities that exist in recent times is new technology.

Technology has undergone some rapid changes in the past decade or so and this has provided a lot of opportunities for businesses. For example, Amazon was able to look into the option of digital books and digital market and were the first to come up with an e-book reader.

At that time, it was almost impossible to imagine that digital books can even become popular but Amazon was able to key into the opportunity that technology provided and today is the number one in digital books.

Technology could also pose a threat too . Borders is an example of a company that was negatively affected by technology after it failed to foresee the impact that it would have on the industry and as a result they are nonexistent today. The same thing happened when Apple came out with iTunes.

People could now purchase digital rights to songs and not necessarily a physical CD and as such a lot of businesses that specialize in CDs could no longer continue to operate. Technology was an opportunity at one point for them but due to the fact that they did not key into it, it became a threat. Other opportunities include relaxing government regulations, elimination of international barriers, changing consumer preference et al.

Threats are changes in the external environment that have the ability to impact the company . Opportunities and threats are very closely interlinked because opportunities that are not seized can tend to escalate into a threat. Examples of threats are emergence of new competitors into a market, pending government regulations, increased trade barriers, pending lawsuits, new technology et al.

Writing a SWOT Analysis Report for a Business Plan – A Sample Template

To write a SWOT analysis for your business plan you would have to brainstorm and find out what constitutes your strengths, weaknesses, opportunities and threats. For best results, you should conduct a SWOT analysis from the perspective of management, sales, customer care and even the customers. Typically, a SWOT analysis for a business plan is conducted using a foursquare SWOT analysis template but alternatively, you can just make a list of each of the factors you intend to consider.

Once you are done with your brainstorm session, you should create a final version of your SWOT analysis in an order of priority. You should list each category with the elements that are of most priority at the top, and the elements with the least priority should be at the bottom.

For the purpose of illustration, here is a brief SWOT analysis for a hypothetical dog grooming business in the united states of America.

• Have many return customers
• Do get walk-in business
• Mobile grooming van has eye catching logo and gives exposure when performing on-site services
• Customers are satisfied with our level of service
• High overhead cost
• Don’t have a marketing plan
• Don’t have a structured marketing budget

Opportunities

• Increasing popularity of dogs in America
• Increasing use of social media
• Local annual pet fair
• Competition from other dog grooming businesses in town
• Expenses in running media ads

Uses of SWOT Analysis Report

• For strategic planning and decision making: a SWOT analysis is a very important tool for making strategic plans and decisions. It allows the business owner to consider every aspect of the business and also to make informed decisions from the finding he makes.
• Building on strengths: a SWOT analysis will help you to identify the areas in which you are doing well in your business. By identifying these areas, you can make sure that you maintain them so as not to lose that competitive advantage.
• Minimizing weaknesses: conducting a SWOT analysis will help you to identify the characteristics that put your business in a competitive disadvantage. By identifying these areas, you will then be able to easily minimize their impact on your business and thus improve what you already have on ground.
• Seizing opportunities: a SWOT analysis can open your eyes to opportunities that exist around you which your business can take advantage of and turn them into strengths. An opportunity that exists but is not seized by a business can prove to be disastrous in the future.
• Counteracting the effects of threats: with the use of a comprehensive SWOT analysis, a business should be able to identify threats and also proffer ways of nullifying their effects.

More on Business Plans

How To Write a SWOT Analysis For a Business Plan

An acronym standing for Strengths, Weaknesses, Opportunities, and Threats, a SWOT Analysis is designed to help you analyze your company’s capabilities against the realities of your business environment. Doing so allows you to direct your business toward areas where your abilities are the strongest and your opportunities are abundant. It also allows you to develop short and long-term strategies for your business. A well-developed SWOT analysis will:

• capture business opportunities by capitalizing on business strengths
• overcome weaknesses to take advantage of business opportunities
• monitor potentially threatening outside forces while maintaining or developing internal strength response capabilities
• eliminate weaknesses to protect your business from threats

Writing a SWOT Analysis  

When writing your SWOT Analysis, we recommend involving employees with different perspectives and stakes in your company, for example, management, sales, customer service, and customers.

To write a SWOT Analysis for a business plan, we recommend following these four steps. You can use a four-square SWOT Analysis template, or if more manageable, you can make lists for each category.

Example of a four-square template:

After you’ve gathered the right group of employees together, brainstorm your company’s strengths and weaknesses and its opportunities and threats, first individually and then collectively.

Strengths and weaknesses are internal to your company and can change over time with work. Examples of internal factors include:

• Company culture
• Company image
• Operational efficiency
• Operational capacity
• Brand awareness
• Market share
• Financial resources
• Organizational structure

Opportunities and threats are external, happening whether you want them to or not, and can’t be changed. Examples of external factors include:

• Societal changes
• Competitors
• Economic environment
• Government regulations
• Market trends

Strengths refer to the positive, tangible and intangible attributes internal to your company that are within your control.

To help you determine what your company’s strengths are, ask yourself:

• What does the company do well?
• The positive attributes of your employees (knowledge, background, education, credentials, network, reputation, or skills)
• The tangible assets of the company (capital, credit, existing customers or distribution channels, patents, or technology)
• What advantages does the company have over our competitors?
• Do we have strong research and development capabilities? What about manufacturing facilities?
• What other positive aspects, internal to the business, add value or offer us a competitive advantage?

Any aspect of your business that detracts from the value you offer or places you at a competitive disadvantage is a weakness. To determine your company’s weaknesses, ask yourself these questions:

• What factors detract from a competitive edge?
• To accomplish my objectives or compete with my strongest competitor, what areas need to improve?
• What does the business lack? Is it expertise? Maybe it’s access to skills or technology?
• Does the company have limited resources?
• Is my business in a poor location?

Opportunities

Opportunities are attractive external factors that denote reasons your business is likely to thrive. To identify your business opportunities, ask yourself:

• What opportunities are there in my market or my environment that I can benefit from?
• Does my business have a positive perception?
• Has my market recently grown, or have there been other changes that have created an opportunity?
• Is this opportunity ongoing or time-limited? How critical is my timing?

Any external factor beyond your control that could place your strategy, or the business itself, at risk is a threat. Although you have no control over threats, you can benefit by having a contingency plan to address them if and when they occur. To identify threats, ask yourself:

• Who are my existing or potential competitors?
• What factors beyond my control could place my business at risk?
• Are there challenges created by an unfavourable trend or development that could lead to declining revenues or profits?
• What situations could threaten my marketing efforts?
• Have supplier prices or the availability of raw materials significantly changed?
• Are there any shifts in consumer behaviour, the economy, or government regulations that could reduce my sales?
• Are any of my products, equipment, or services obsolete due to the introduction of a new product or technology in the market?

Once you’ve brainstormed your lists of strengths, weaknesses, opportunities, and threats, we recommend ranking them through a voting process. At the end of this process, you should have a prioritized list of ideas, with one person, usually the CEO, having the final call on priority.

Divide your strengths into two groups:

• Group 1: Strengths that can help you take advantage of opportunities facing your business.
• Group 2: Strengths that can help you head off potential threats.

Divide your weaknesses into two groups:

• Group 1: Weaknesses that require improvement before you can take advantage of opportunities.
• Group 2: Weaknesses that you need to completely and quickly overhaul and convert into strengths to avert potential threats to your business.

Continually refer to your lists as you make decisions that contribute to your business, including developing strategies and actions for capitalizing on opportunities. Questions that can guide your decision making include:

• Do strengths open any opportunities?
• How can we convert weaknesses to strengths?
• What do we have to do to take advantage of opportunities?
• How can we best neutralize threats?

SWOT Analysis For a Business Plan Conclusion

Once you have finalized your SWOT Analysis and added it to your business plan, don’t just leave it and forget it. A SWOT Analysis is a crucial element in any business plan and should be revisited regularly, at least annually.

Suppose your business is facing significant changes in the marketplace or competitive conditions, experiencing growth problems, or failing to meet goals. In that case, you may want to revisit your SWOT Analysis more frequently.

It should reflect the world around you as it is, not the way it was. It’s an invaluable tool for leveraging your company’s strengths, minimizing threats, taking advantage of available opportunities, strategic planning, and determining company objectives.

At Bsbcon, we are available to provide support and guidance with your company’s SWOT Analysis, ensuring that it reflects the current state of your business and considers all factors needed to ensure your business’s short and long-term goals and successes. Once your SWOT Analysis is complete, we will work with you to incorporate it seamlessly into your business plan.

Each of our business plans are tailor-made (no templates or plugins!) and designed to be easily implementable in practice. We have business plans for bank loans, investors, strategic purposes, immigration, and more.

Contact us today to get started on accomplishing everything you’ve dreamed with consumer-tested, expert panel-approved business plans that outline your steps to success.

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Everything You Need to Know About SWOT Analysis (With Real-World Examples)

Are you using SWOT analysis to form the future strategy of your business?

You definitely should be.

The SWOT analysis of a company helps it identify what it is doing well, where it needs to grow, what it needs to improve, and what could be its undoing.

When you’re analyzing the competition or putting together a business plan , you could turn to the findings of your SWOT to identify potential gaps in your strategy.

And the best part is, doing a SWOT analysis doesn’t require a big investment of time. In fact, it is something that can be quick, simple and fun. Done right, a SWOT will give you a competitive edge in your niche or industry. . It’s that powerful.

In this article, we’ll discuss what a SWOT analysis is, highlight some scenarios where it makes sense to conduct a SWOT analysis, and provide tips and advice for conducting a SWOT analysis of your own. We’ll also share a few examples and templates that you can use to evaluate your current position in the market.

Let’s get going.

What Is SWOT Analysis: SWOT Analysis Definition 

So, what does SWOT stand for? According to most definitions, SWOT is an acronym for strengths, weaknesses, opportunities, and threats. 

The first two of these, strengths and weaknesses, are referred to as internal factors, which include things that you have control over, like your workforce or your product packaging .

Opportunities and threats, on the other hand, are external factors that are outside the scope of your control, like market trends or competing businesses. However, they can still impact your business for better or worse.

The purpose of SWOT analysis is to offer a blueprint for success, but it’s your job to analyze the factors and decide the next steps for your business

Companies usually conduct a SWOT analysis to shape their business strategy, but individuals can gain from a SWOT analysis as well.

If you’re confused about switching jobs, pursuing a new career, or working remotely , you can use the SWOT analysis framework to help you decide. 

Why Do a SWOT Analysis?

With a range of business analysis techniques , you might be wondering why you should pick SWOT analysis over other methods. 

Well, there are several advantages to learning how to create a SWOT analysis. 

For one, SWOT gives you a broader, 360-degree view of your industry standing and where you lack against your competitors. You can then take steps to improve your operations in those areas in a way that makes your company stand out from the rest.

Another key benefit of SWOT analysis is flexibility. You can use it to inform all kinds of strategic decisions, from minor tweaks in existing campaigns to major business initiatives.

Moreover, SWOT can be used to assess locations, investments, employee performance and even to conduct self-assessments.

When to Use a SWOT Analysis

There are numerous scenarios in which a SWOT analysis can prove beneficial. 

Ideally, you should use it during early planning and brainstorming to get a feel for a new market, product, or approach, etc. 

For instance, If you’re not sure about the best social media strategy for your ecommerce website, you can do a SWOT to identify the best channels for your business.

Likewise, a SWOT analysis can help you answer questions like:

• Do you need to reassess a particular marketing strategy mid-course?
• Should you explore the efficacy of a new merger, partnership, or acquisition?
• Does your company want to reinvest profits back into the business?

The big-picture insights that you gain through SWOT can help smoothen your journey through change, struggles, and growth.   

How to Do a SWOT Analysis

Now that you’re familiar with the basics of SWOT analysis, let’s look at the key steps involved in its creation.

1. Visualize the SWOT Diagram

The first step of creating a SWOT analysis is to visualize a SWOT diagram. We recommend using a 2×2 quadrant where each box is labeled with the relevant heading. Place strengths and weaknesses in the top row, and opportunities and threats in the bottom one.

Here’s how Canva visualizes it:

While you may be able to make a quadrant diagram yourself, it’s much easier to use a SWOT analysis template. Templates can be easily styled, and you can even customize them with brand colors, motifs or shapes. Here are some cool choices:

Aha’s simple matrix

Smartsheet’s 3D SWOT Analysis Template

However, you’re not only restricted to a 2×2 grid. While this is the most popular layout for a SWOT diagram, you can also use a vertical or horizontal SWOT analysis template. Below are some options.

Konsus Design’s Horizontal SWOT Analysis Template

Slide Hunter’s Vertical SWOT Analysis Template

2. Set Up a Goal

In addition to visualizing the SWOT, you need to have a clear objective. Are you planning to merge with another business? Are you considering expanding your local presence? Identify the strategy you want to develop and use that to create your SWOT diagram.

3. Hold A Brainstorming Session

Gather your team and brainstorm as much as you can. Get marketing, finance, and even consumer-facing personnel on board and encourage everyone to get creative. 

You can, for example, tell them to make a casual list of what they think are your company’s strengths and weaknesses as well as what they identify as opportunities and threats.  

Don’t sweat over how relevant each point is at this phase – the idea is to hear everything the team has to say so that you don’t miss out on anything important. Who knows, you might discover a thing or two that could positively impact your bottom line.

4. Break Down the Four Components

Once you’ve determined the goal of your SWOT analysis and gathered input from your team, it’s time to work on the four components of the process: Strengths, Weaknesses, Opportunities, and Threats.

Here’s a look at what influences these internal and external factors, and some questions to help get things moving. 

SWOT Analysis Strengths

Strengths are the tangible and intangible advantages your business has at its disposal. Some examples of these advantages are:

• Having a great location 
• Having a world-class development team 
• Having a strong brand affinity 

To determine your strengths, you could start by analyzing your company’s standing in terms of service, finance, company culture and brand leadership – resources and factors that you can control. 

Questions to help identify your company’s strengths

• Which features of your product resonate with your target audience?
• Do you have unique attributes and processes that differentiate you from the competition?
• Are your cash reserves sufficient to keep your business afloat? 
• What’s your USP (unique selling proposition)?
• What specialized services or knowledge do you have to offer?
• What do you do that no one else does?

SWOT Analysis Weaknesses

When identifying weaknesses, make sure to take your staff’s input. They’ll likely point out shortcomings you hadn’t considered. Keep in mind that you have control over your weaknesses – like strengths, they’re internal to your company. 

Questions to help identify your company’s weaknesses

• Are there any aspects of your business that may cause customers to select the competition over you?
• Are your customers completely satisfied with your product?
• Do customers understand what your brand is about?
• Do you have clear business goals?
• Are there any areas of your business that have room for improvement?
• What is holding you back from achieving your goals?
• Is your company’s internal infrastructure performing at its best?

SWOT Analysis Opportunities 

After you’ve identified your company’s strengths and weaknesses, it’s time to have a look at opportunities. These are favorable aspects external to your company that you can leverage to your advantage. A few examples of such aspects are:

• New or emerging markets
• The evolution of technology
• An increase in population

Questions to help identify your company’s opportunities

• Are there any new demands in the market that are not currently being met?
• Are there any additional resources that you could benefit from?
• Are there any new trends that you are not yet taking advantage of?
• Are there any changes in legislation or regulations that you may benefit from?
• Are there any opportunities for you to expand?

SWOT Analysis Threats

Lastly, you need to identify any threats that could prevent you from achieving your goals. These are conditions beyond your control that influence your chances of success. By evaluating these conditions, you can construct a contingency plan to minimize the negative impact they might have on your company.

Questions to help identify your company’s threats 

• What advantages do your competitors have that you don’t?
• Are there any changes in the economy that could negatively impact your business?
• Are any of your suppliers unreliable?
• Will changes in federal taxes impact your company in any way?
• Does a community belief clash with the USP of your product or service?

5. Act Upon Your Findings

Now that you’ve made your SWOT, it’s time to analyze each of the four components and lay out your strategies. 

For instance, if you have a good reputation among adult consumers, you should continue to build and nurture relationships with them to strengthen it further. 

And if marketing to younger generations is one of your weaknesses, you should take steps to improve your appeal, like encouraging adults to spread the word among their children. 

Likewise, it’s critical to seize opportunities to neutralize potential threats. If using a certain technology (like virtual reality) will give you a competitive edge over other businesses, consider hiring relevant expertise to make this happen. This, in turn, will help you overcome the threats posed by some of your closest competitors who’re striving to increase their market share.  

SWOT Analysis Marketing Example

To help you gain a better understanding of the concept, we’re going to look at the SWOT analysis of Amazon, the world’s largest ecommerce company by online revenue.

One of Amazon’s strengths is its ability to satisfy customers . So, despite its late entry into key markets, the company has an advantage that it could use to overcome one of its weaknesses.

For example, the ecommerce giant can run marketing campaigns communicating that people who shop from its website are more satisfied than those who purchase from other places. 

Similarly, Amazon can capitalize on its opportunities to neutralize the threats. For instance, it can consider opening physical stores to see off the local competition. Additionally, it can make efforts to improve ecommerce-related IT security, which can help mitigate hacking and identity theft. 

SWOT Analysis Bonus Tips

Here are some additional guidelines for getting the most out of your SWOT.

• Involve key departments in drawing up the SWOT analysis to gain their trust
• Put your egos aside and honestly discuss areas that could use some improvement
• Write suggestions on cards or Post-It notes that make it easy to arrange relevant ideas into groups
• Update your findings from any past SWOT analysis. For instance, an opportunity may no longer exist (e.g. if a competitor has already introduced a specific technology)
• Run a SWOT test against your competitors to see where you have an advantage and where you fall short
• Use tools like Creately to save time and create a beautiful SWOT analysis 

Ready to SWOT It Out?

Every business has strengths and weaknesses, but they’re also affected by the threats and opportunities in the marketplace. Make sure you follow the above-mentioned tips and best practices to maximize your chances of success. 

Once your SWOT analysis is complete, you’ll have the perspective you need to make the best decisions for your company. Ultimately, the strategic planning tool will provide key insights into how to optimize your operations for improved performance. 

Summary: How to Do a SWOT Analysis in 2021

• Visualize the SWOT diagram 
• Establish a clear objective
• Hold brainstorming sessions
• Break down the four components of SWOT
• Act upon your findings

Have you conducted a SWOT analysis for your business? Did you uncover anything surprising once you took a closer look? Let us know in the comments section below.

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SWOT Analysis In Business (With Examples)

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Here is a simple strategic SWOT analysis that you can use as a highly effective method for creating an edge in the market and to insure long term success.

SWOT is an acronym for the Strengths and Weakness of a business and the Opportunities and Threats facing the business. It is used to understand Current and Future, Internal and External factors that may have an effect on a  business results and success.

The Strengths and weaknesses are focused inward to analyze what your company does well and where it could be better. Opportunities and Threats are focused externally towards the industry, which analyze any potential negative effect on the business.

How To Carry Out A SWOT Analysis In Business

To carry out a SWOT analysis for your business, summarize the strengths, weaknesses, opportunities and threats of your business relative to competitors. A SWOT analysis is a simple, yet highly effective method for conducting an analysis on a business, product or service. Before you try writing a business or marketing plan, it is highly recommended that you first complete a SWOT analysis.

A SWOT approach to planning requires owners to look very closely and analytically at every aspect of their operation, so that objectives can be evaluated as achievable, while also building up a clear picture of the strategies that need to be adopted under the constraints that have been recognized.

“If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.” 

- Sun Tzu,  The Art Of War -

When completing a SWOT analysis, the aim is to reflect on all aspects of your business’s operations. You may wish to do this exercise alone or include your staff, spouse or business advisor. Whether you choose to do it alone or with others, make sure you allow a solid chunk of time to complete the analysis without being interrupted.

A SWOT analysis is a brainstorming exercise and to get the best results I suggest you allow yourself at least thirty minutes, or preferably an hour. This allows your mind to free itself of the multitude of thoughts and minor details of day to- day living. It takes time to get a flow of ideas going, so be patient and allow yourself time. Once you have allotted sufficient time to focus on this exercise it is time to get started.

SWOT Analysis Template: Excel Download

SWOT Analysis

Download SWOT Analysis Excel Template

This link will open as an Excel spreadsheet and is ready, and

easy to use but you can follow these video instructions for more information. 

SWOT Analysis Template Video

The SWOT Analysis Goal 

After you have successfully completed the SWOT analysis, take some time to explore ways to consolidate your strengths, minimize your weaknesses, take advantages of the opportunities and be prepared for the threats.

Your priorities should be to:

• Consolidate a strength
• Use a strength to address an opportunity or threat
• Use a strength to minimize a weakness or threat
• Convert a weakness to strength
• Convert a threat to an opportunity

SWOT Analysis Template: PDF Download

Download swot analysis pdf.

A SWOT analysis is a simple, yet highly effective method for conducting an analysis on a business, product or service. Before you try writing a business growth or marketing plan, it is highly recommended that you first complete a SWOT analysis.

S WOT Analysis - STRENGTH  

The first step is to reflect on what you do really well. What is working for you at the moment? Can you consolidate on any of these strengths and make them an even bigger advantage for your business? Try asking yourself the following questions

What are your business’s strengths?

• Attractive shopfront
• Operating hours
• Industry experience
• Follow-up service
• What do you do well?
• What unique resources can you draw on?
• What do others see as your strengths?
• How are you superior to your competitors?
• Why are your products or services so good?
• What is it that makes your business unique?

Potential Internal Strengths Can Be:

• Adequate financial resources.
• Well thought of by buyers.
• An acknowledged market leader.
• Well-conceived functional area strategies.
• Insulated from strong competitive pressure.
• Proprietary technology.
• Cost advantages.
• Better advertising campaigns.
• Product innovation skills.
• Proven management.
• Better manufacturing capability.
• Superior technological skills.

 “Appear weak when you are strong, and strong when you are weak.” 

- Sun Tzu, The Art Of War -

S W OT Analysis - WEAKNESS Examples

Weaknesses need to be understood so you can compensate or improve them. This is not the time to start beating yourself up for being less than perfect. Everyone has weaknesses. Your first task is to identify anything you think you need to improve. These could include:

• Time management
• Marketing strategy
• Certain products or services
• Cleaning up your work environment
• Follow-up procedures
• What could you improve?
• Where do you have fewer resources than others?
• What are others likely to see as weaknesses?

Potential Internal Weaknesses Can Be:

• No clear strategic direction.
• Obsolete facilities.
• Low profitability because …
• Lack of managerial depth and talent.
• Poor track record in implementing strategy.
• Internal operating problems.
• Too marrow a product line.
• Weak market image.
• Weak distribution network.
• Below-average marketing skills.
• Unable to finance needed changes.
• Higher overall costs relative to key competitors.

Make a comprehensive list and start reviewing which ones you could start transferring into strengths. If you find it difficult to be objective, ask someone you trust for his or her feedback on your perceived weaknesses.

“So in war, the way is to avoid what is strong, and strike at what is weak.”

SW O T Analysis - OPPORTUNITY 

The third stage of the analysis process is to look at the opportunities that your business has available. Where could you start gaining an advantage over your competitors? The more you know about what your competitors are doing, the easier it will be for you to see opportunities to create something different and compelling. Another great way to discover possible opportunities is to ask your current customers. They will often have all the answers if you are brave enough to ask the question.

• What external factors can you take advantage of?
• Are there current resources that are underutilized?
• How can you turn your strengths into opportunities?
• What trends could you take advantage of?
• What good opportunities are open to you?

Potential External Opportunities Can Be:

• Serve additional customer groups.
• Enter new markets or segments.
• Expand product line to meet broader range of customer needs.
• Diversify into related products.
• Falling trade barriers in attractive foreign markets.
• Complacency among rival firms.
• Faster market growth.

There are always opportunities. Take the time to brainstorm a comprehensive list and don’t sensor your ideas. There will be time to eliminate the most impractical ideas later. For now, just get the ideas down on paper.

“In the midst of chaos, there is also opportunity” 

SWO T  Analysis - THREAT  

Finally, you need to assess any current or future threats to your business. All potential threats should be brainstormed. It is better to be aware of problems that might arise than to be hit with them out of the blue. This list could include things like changes in legislation, a multinational competitor opening a store or a lack of products due to importing issues. Whatever the possible threats, list them and assess whether they are real or unlikely. Are there any threats to your current market share? When all areas have been plotted and identified, you will be in a much better position to plan your future.

Take the time to complete this exercise thoroughly as the benefits are very real.

• What threats do your weaknesses expose you to?
• What is your competition doing?
• What trends could harm you?

Potential External Threats Can Be:

• Entry of lower-cost foreign competitors.
• Rising sales of substitute products.
• Slower market growth.
• Adverse shifts in foreign exchange rates and trade policies of foreign governments.
• Costly regulatory requirements.
• Changing buyer needs.
• Adverse demographic changes.

SW OT Analysis Examples  

• Sample SWOT Ideas for a Local Restaurant
• Example SWOT for a Small, Local Coffee Chop Chain

“Who wishes to fight must first count the cost” 

About the Author Hans

Hans had 40 of his own businesses over the last 30 years and is famous for creating fast-growing businesses” He is an author, speaker, coach, and consultant and a specialist in business optimization and turnaround, helping smaller business owners eliminate business limitations, threats, and growth challenges in achieving their sales, profit, cash flow, and income goals with sniper precision.

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Develop your SWOT analysis

You can better understand your businesses strengths, weaknesses, opportunities and threats by using a SWOT analysis. Identify what your business is doing well and how you can improve with our SWOT analysis template.

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Why you need a SWOT analysis

Download our swot analysis template, complete your swot analysis, use your swot analysis.

A SWOT analysis is a strategic planning tool used to assess the strengths, weaknesses, opportunities and threats of your business.

Developing a SWOT analysis can help you look at your business in a new way and from different directions. It can also help you to:

• create or fine tune your business strategy
• prioritise areas for business growth to achieve your business goals.

Our template can help you develop your SWOT analysis.

SWOT template

You can start the process by gathering a group of employees or advisors who have different perspectives on your business. If you don’t have employees, you can ask family members, business advisors or mentors. The key is to have different points of view.

Using the prompting questions below as a guide, you can conduct a brainstorming session to discuss ideas about each SWOT category. After brainstorming, create a final prioritised list of points in our SWOT analysis template. List the factors in each category from highest to lowest priority.

Consider your strengths

Strengths are internal, positive parts of your business. These are things that are within your control. Ask yourself:

• What do we do well?
• What do we do better than our competition?
• What unique assets do we have internally (such as knowledge, background, network, reputation or skills) and externally (such as customers, patents, technology or capital)?
• What positive aspects of the business give us a competitive advantage?

Consider your weaknesses

Weaknesses are internal, negative factors. These are things that you might need to improve on to be competitive. Ask yourself:

• What and where can we improve?
• What do our competitors do better?
• Where are the gaps in our assets and resources (such as knowledge, cash or equipment)?
• Is the thing that sets us apart from our competition obvious?
• How can we improve business processes?

Consider your opportunities

Opportunities are external, positive factors that may give a competitive advantage and contribute to success. Ask yourself:

• What trends can we use to our advantage to increase use of our product or service?
• Are there any changes or events that might positively impact us (such as consumer behaviour, regulation, policies or new technology)?
• Has anything changed in the market that creates opportunity for us?
• Do the public like us?

Consider your threats

Threats include external factors beyond your control that may put your business at risk. Consider putting in place contingency plans for dealing with them if they occur. Ask yourself:

• What factors beyond our control could place us at risk?
• What potential competitors may enter the market?
• Are our resource and material supplies unstable or insecure?
• Are there any changes or events that might negatively impact us (such as consumer behaviour, regulation, policies or new technology)?

Once you have completed your SWOT analysis, it can be used to develop strategies for achieving your business goals. You can create a plan to continue building on your strengths while improving on your weaknesses. When using your SWOT analysis to create a strategy, ask yourself:

• How can we use our strengths to take advantage of our opportunities?
• How can we use our strengths to minimise our threats?
• What do we need to do to overcome and minimise our identified weaknesses?

Develop a risk management plan to prepare and protect your business.

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What is SWOT Analysis?

How to conduct a swot analysis, what is a swot analysis used for, additional resources, swot analysis.

A framework to understand and analyze a company’s Strengths, Weaknesses, Opportunities, and Threats

SWOT stands for S trengths, W eaknesses, O pportunities, and T hreats. A SWOT analysis is a framework to help assess and understand the internal and external forces that may create opportunities or risks for an organization.

Strengths and weaknesses are internal factors. They are characteristics of a business that give it a relative advantage (or disadvantage, respectively) over its competition.

Opportunities and threats, on the other hand, are external factors. Opportunities are elements of the external environment that management can seize upon to improve business performance (like revenue growth or improved margins).

Threats are elements of the external environment that may endanger a firm’s competitive advantage (s), or even its ability to operate as a going concern (think regulatory issues or technological disruption).

Key Highlights

• SWOT is used to help assess the internal and external factors that contribute to a company’s relative advantages and disadvantages.
• A SWOT analysis is generally used in conjunction with other assessment frameworks, like PESTEL and Porter’s 5-Forces.
• Findings from a SWOT analysis will help inform model assumptions for the analyst community.

Strengths may be any number of areas or characteristics where a company excels and has a competitive advantage over its peers. Advantages may be more qualitative in nature and therefore difficult to measure (like a great corporate culture, strong brand recognition, proprietary technology, etc.), or they may be more quantitative (like best-in-class margins, above-average inventory turnover, category-leading return on equity, etc.).

Weaknesses are areas or characteristics where a business is at a competitive disadvantage relative to its peers. Like strengths, these can also be more qualitative or quantitative. Examples include inexperienced management, high employee turnover, low (or declining) margins, and high (or excessive) use of debt as a funding source.

Opportunities

The “Opportunities” section should highlight external factors that represent potential growth or improvement areas for a business. Consider opportunities like a growing total addressable market (TAM) , technological advancements that might help improve efficiency, or changes in social norms that are creating new markets or new sub-segments of existing markets.

Threats are external forces that represent risks to a business and its ability to operate. The categories tend to be similar to the “Opportunities” section, but directionally opposite. Consider examples like an industry in decline (which is the same as a decreasing TAM), technological innovation that could disrupt the existing business and its operations, or evolving social norms that make existing product offerings less attractive to a growing number of consumers.

A SWOT analysis is rarely completed in isolation; it generally makes up one part of a broader business analysis. And while it is itself an assessment framework, a SWOT analysis is also an effective tool to help summarize other findings.

For example, an analyst can’t really assess a company’s strengths and weaknesses without first understanding the business and its industry. They may wish to leverage other tools and frameworks in order to accomplish this, including:

• Hax’s Delta Model – This will help to understand competitive positioning.
• Ansoff’s Matrix – This will help visualize the relative risk of a management team’s growth strategies.
• Financial ratio analysis – This will help identify trends (year-over-year), as well as a firm’s relative performance (using benchmarking data).

The same is true for external factors – opportunities and threats. It’s nearly impossible to understand these without first considering:

• The industry life cycle – Does the business operate in a growing, mature, or declining industry? This itself informs both opportunities and threats.
• An analysis of the broader business environment or the industry itself – Think frameworks like PESTEL or Porter’s 5 Forces.

A SWOT analysis is used differently by different stakeholders.

For example, a management team will use the framework to support strategic planning and risk management. SWOT helps them visualize the firm’s relative advantages and disadvantages in order to better understand where and how the organization should allocate resources, either towards growth or risk reduction initiatives.

The analyst community, on the other hand, may seek to understand (and quantify) strengths, weaknesses, opportunities, and threats in order to assess the business more completely.

Consider that findings from a SWOT analysis may help inform model assumptions among analysts. It could be an equity researcher trying to estimate the fair market value of a company’s shares , or a credit analyst looking to better understand a borrower’s creditworthiness.

In general, the SWOT framework is considered by many to be one of the most useful tools available for strategic planning and business analysis.

Thank you for reading CFI’s guide to SWOT Analysis. To keep learning and advancing your career, the following CFI resources will be helpful:

• FREE Analyzing Growth Drivers & Business Risks Course
• Ansoff Matrix
• Business Risk
• PESTEL Analysis
• Industry Analysis
• See all management & strategy resources
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Coffee Shop SWOT Analysis: Strengths, Weaknesses, Opportunities and Threats

by I.J. Karam | Jan 1, 2023 | Business Plans

Are you looking to launch a coffee shop venture? If yes, then you need to carefully analyze your coffee shop’s strengths, weaknesses, opportunities and threats (also known as SWOTs). A coffee shop SWOT analysis is usually an important section of your coffee shop business plan . In fact, having a deep understanding of the SWOTs involved in your café project will enable to grasp the full implications of operating such a business, from leveraging your advantages, improving your limitations and unlock growth while mitigating risks.

So without further ado, let’s see what are the main SWOTs involved in a coffee shop business:

Strengths of a coffee shop

• The quality of your products: A successful coffee shop needs to offer high-quality coffee, tea, and other beverages, as well as fresh and tasty food options. You can do that by sourcing your ingredients from a handpicked number of local suppliers while keeping your inventory low to ensure maximum product freshness.
• Top notch customer service: Providing excellent customer service can go a long way in attracting customers to your coffee shop and generate loyalty. A strong customer service is guaranteed when you have a friendly and knowledgeable staff, maintain a welcoming atmosphere, and ensure a fast and efficient service.
• A good location: A coffee shop SWOT analysis is incomplete if you forget to address the location of your venue. A convenient location can be a strong asset for your coffee shop venture. In fact, it can have a direct effect of your overall business success. Make sure you open your coffee shop in a strategic area with easy access and plenty of foot traffic.
• A strong branding and marketing: Developing a strong brand identity and effectively marketing your coffee shop are key to building a growing and sustainable business. In this day and age, leveraging the power of social media, customer reviews and word of mouth can go a long way in attracting and retaining a robust clientele.
• Solid financial management: Proper financial management, including accurate forecasting and budgeting, as well as a strong cost control are essential for any business to thrive and your coffee shop is no exception.
• Constant innovation: Staying up to date with the latest industry trends and consistently introducing new coffee products and offerings can help keep customers coming back and unlock new revenue streams.

Weaknesses of a coffee shop

• Variable demand and seasonality: The demand for coffee and other beverages can be affected by a variety of external factors, including the weather, economic conditions and other factors. For example, colder weather may lead to an increase in demand for coffee and warm beverages, while a recession may lead to a decrease in demand due to reduced disposable income. Some coffee shops may also experience fluctuations in demand due to seasonality, such as an increase in demand for iced beverages during the summer months. This can impact profitability and make it difficult to predict and plan for future demand. Make sure to address your project’s seasonality while building your coffee shop financial plan .
• High running costs: Coffee shops often have high overhead costs, including rent, utilities, marketing budgets and labor. Sometimes, these costs can be difficult to control and can impact profitability, especially if sales are not meeting expectations.
• Limited operating hours: Many coffee shops operate during the morning and early afternoon hours, which can limit the potential for revenue. This can be especially challenging if the business is not located in an area with a high footfall.

Opportunities for a coffee shop

• Focusing on a niche market: Focusing on a specific niche market can help your coffee shop stand out from the competition and attract a loyal customer base. For example, a coffee shop that focuses on sustainably sourced, organic coffee beans and offers a variety of brewing methods may appeal to a particular segment of coffee enthusiasts.
• Leveraging online orders: Offering online sales and delivery can help your coffee shop reach a wider audience and generate additional revenue streams. This can be especially useful for customers who may not be able to visit your physical location or who prefer to order from the comfort of their home/office.
• Partnerships with other local businesses: Partnering with local businesses or organizations or collaborating with other food and beverage vendors in your vicinity, can help your coffee shop grow its number of customers and generate additional sales. For example, you might want to partner with a local bakery to offer pastries, or collaborate with a local event venue to provide catering services for their events.
• Hosting special events: Live music, stand-up gigs or community gatherings are all examples of events that can help drive more visitors to your coffee shop and create a unique atmosphere. These events can also help your coffee shop build a sense of community and establish itself as a popular gathering place.
• Menu expansion: How about adding more items to your menu? By including new food and beverage options, such as smoothies, pastries or even sandwiches and food, you can appeal to a wider range of customers and hence generate more revenues. This can be especially useful if your coffee shop is located in an area with a low number of restaurants or F&B outlets.
• Starting a loyalty program: It is a well-known fact that rewards for frequent purchases or referral programs can help a coffee shop build a loyal customer base and encourage repeat business. These programs can also help you gather valuable data on customer preferences and consumer behaviors. Since most big coffee brands like Starbucks or Costa are doing it, there must me a sound reason to do it, and you should too.
• Opening new branches and franchising: Expanding your coffee shop business by opening additional branches in new locations or even starting a franchising program are all potential opportunities you should explore later down the line. This can be especially relevant once you have successfully established your first outlet and built a solid reputation and customer base. Discussing how you plan to grow and scale your venture is relevant in this section of your coffee shop SWOT analysis.

Threats for a coffee shop

• Tough competition: There may be a lot of competition in the coffee shop market where you operate, as there are many small businesses that offer similar products and services. This can make it difficult for a new coffee shop to stand out and attract customers, especially if there are already many established competitors in the area.
• Uncertain economic conditions: Economic downturns or instability can lead to reduced consumer spending, which can negatively impact coffee shop visits. This can make it more difficult for a coffee shop to maintain profitability and may require the business to make adjustments to its operations.
• Shift in consumer preferences: We live in a fast-paced world where consumer trends often change, and new trends keep emerging. These shifts in consumer behavior can impact the demand for certain products and services, including the type of coffee consumed. For example, if there is a tendency towards healthier, natural options, your coffee shop may need to adapt its menu to cater for this new demand.
• Disruptions in the supply chain: Delivery delays or shortages of certain coffee ingredients or equipment can impact a coffee shop’s ability to operate effectively and maintain profitability. This situation can be especially challenging if your coffee shop is reliant on a small number of suppliers.
• Health and safety concerns: Your coffee shop may face challenges related to health and safety, such as the risk of foodborne illnesses or accidents in the workplace. Ensuring that your venue is compliant with health and safety regulations and having the proper quality controls and certifications can help minimize these risks.

Now that we have seen the main SWOTs of a coffee shop business, make sure you incorporate this analysis in your business plan. Remember, a thoroughly prepared coffee shop SWOT analysis should be included in your coffee shop business plan , so you’d better start preparing one now to save time and efforts down the line.

And by the way, have you checked our ready-made coffee shop business plan template ? If you are in the process of planning your next coffee shop venture, you need to download our pre-written business plan in Word. It comes also with an automatic financial plan in Excel tailored to the coffee shop business and very easy to use.

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All sample plans start with an analysis of the situation. If that plan involves a business, the planning process usually begins with the said business taking a stock of their situation. One method of analysis for any business is the SWOT analysis. Whether it be for strategic plans, operational plans , or business plan, the SWOT analysis will surely come through.

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4. Strategy Building

5. matching and converting, 6. corporate planning.

• Set objectives
• Scan the environment
• Analyze existing strategies
• Define strategic issues
• Develop new/revised strategies
• Establish critical success factors
• Prepare plans (strategy, operational, resource, project) for the implementation of the strategy
• Monitor results

7. Marketing

• Qualitative marketing research (focus groups)
• Quantitative marketing research (statistical surveys)
• Experimental techniques (test markets)
• Observational techniques (on-site observations)

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