SWOT analysis is a simple and structured planning tool for reviewing and assessing the position and health of an organization. It allows the organization to look deeply within itself to understand the factors that influence its ability to achieve its goals.
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Definition
A strategic planning tool for reviewing and assessing the position and
health of an organization.
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It allows the organization to look deeply within itself to understand the factors that
influence its ability to achieve its goals
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Definition
In order to execute a strategy within an organization, it is important to
understand the factors influencing the business performance . . .
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. . . and this is where SWOT analysis comes in.
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Applications
Can be Applied to . . .
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A business unit, division or department
An entire organization
A project
In personal development and career progression
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Applications
It involves identifying the key internal and external factors that are helping
or hindering reaching business goals.
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Internal factors are the
strengths and weaknesses
within the organization
External factors are the
opportunities and threats
presented by the external
environment
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Uses
It has become one of the most popular strategic planning tools, and often
used before developing or updating the strategic plan.
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It allows to examine the gap between
where an organization currently is,
where it aims to be in the future, and
where it currently stands within the
industry and market.
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Uses
Other uses . . .
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Can be used in project management
during the prioritization process of
projects to see which projects are
more likely to succeed or fail.
Helps evaluating strategic
alternatives like an investment
opportunity or a potential
partnership or acquisition.
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Benefits
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Helps evaluating current strategies
and the direction of change.
Encourages team participation and
engagement.
Helps understanding where the
company currently stands within the
industry and market.
Helps making more informed
decisions and planning more
successful strategies.
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SWOT Elements
SWOT analysis helps identifying the strengths, weaknesses, opportunities,
and threats related to a business venture.
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Strengths
Weaknesses
Opportunities
Threats
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SWOT Elements
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Strengths
Weaknesses
Opportunities
Threats
-Internal Environment
Strengths and weaknesses
internal to the organization
External Environment
Opportunities and threats presented by
the environment external to the organization
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SWOT Elements
Internal environment looks at the factors that might impact on the
organization internally such as finance, production, research, etc.
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Leadership
and HR
capabilities
Competitive
priorities
Organization
structure
Corporate
culture and
image
Performance
systems
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SWOT Elements
External environment looks at the factors that might impact on the
organization externally .
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Technological
considerations
Economic
conditions
Political
considerations
Competitive
position
Legislations
considerations
Market
trends
Socio-cultural
considerations
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SWOT Matrix
Results are often presented in the form of a four-field matrix.
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Internal
External
Positive Negative
Strengths - Maintain Weaknesses - Remedy
Opportunities - Exploit Threats - Counter
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SWOT Matrix
Results are often presented in the form of a four-field matrix.
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The internal positive
characteristics that increase
the overall performance
and put the business at a
competitive advantage.
Internal
External
Positive Negative
The external factors and
events that the business
could exploit to its
advantage in order to
achieve its goals.
The internal deficiencies
which may decrease the
overall performance and
inhibit the business from
achieving its goals.
The unfavorable external
factors and events that
may interrupt the
business from achieving
its goals.
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Example
The following example uses a four-field matrix to present the findings of a SWOT
analysis conducted to assess the strategy for an organization.
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Internal
External
Positive Negative
STRENGTHS
Competent
workforce
Strong financial
position
Reputable
Quality
products
Effective
leadership
OPPORTUNITIES
Facilities from
government
Untapped
markets
A new
technologies
Growth of existing market
Decreased sales of
substitute products
WEAKNESSES
Company
location
High unit
costs
Inability to meet demand
High turnover
rate
Out-of-date
equipment
THREATS
Rising
materials price
Shortage of
manpower
A new lower-cost competitor
Economic
issues
New costly
regulations
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Steps for Conducting SWOT Analysis
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Invite representatives from various departments or functional areas
• Clearly explain the purpose for conducting the SWOT analysis and how you will
do it.
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Steps for Conducting SWOT Analysis
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Hang up four large flipchart papers, one for each of the four SWOT categories
• Or use a whiteboard to draw a four-field matrix.
Strength
Opportunities Threats
Weaknesses
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Steps for Conducting SWOT Analysis
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Brainstorm strengths, weaknesses, opportunities, and threats in your business and environment
• Record inputs and ideas from the brainstorming session on the four papers.
Strength
Opportunities Threats
Weaknesses
Xxxx
Xxxx Xxxx
Xxx
Xxx
Xxx
Xxx
Xxxx
Xxx Xxx
Xxx
Xxx
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Steps for Conducting SWOT Analysis
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Clarify content and ensure the appropriateness and completeness of the recorded information
• Discuss how to take advantage of the strengths and opportunities while trying to
minimize weaknesses and avoid threats.
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Steps for Conducting SWOT Analysis
When analyzing a SWOT, it is useful to ask . . .
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How can we maintain and leverage our strengths?
How can we improve our weaknesses?
How can we take advantage of external opportunities?
How can we protect ourselves against threats or reduce their effects?
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Steps for Conducting SWOT Analysis
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Share and communicate the outcomes to relevant stakeholders
• Take actions to maximize strengths and opportunities and minimize weaknesses
and threats.
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Personal Development
Although SWOT analysis was originally made for businesses, it can be used to help
you better understand many things about yourself and your external environment.
You can then apply personal development strategies to . . .
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Turn weaknesses
into strengths
Take advantages
of strengths and
opportunities
Minimize or
eliminate
weaknesses
and threats
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Example – Personal SWOT Analysis
The following is an illustrative example that uses SWOT analysis to identify and assess
a person’s strengths, weaknesses, opportunities and threats.
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Internal
External
Positive Negative
THREATS
OPPORTUNITIES
WEAKNESSES
STRENGTHS
Have an
exciting vision
Creative
thinker
Speech clubs
like Toastmasters
Poor verbal
communicator
Networking
groups
Limited technical knowledge
Good time management skills
Companies embracing “Change”
Entry of new
competitors in my field
Love to
learn
Limited ability
to move
Good writing
skills
Audible audio books
Not a social
media person
Not giving family
enough time
High unemployment rates
Poor economy
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Further Information
One way of utilizing the SWOT analysis is to convert weaknesses into
strengths and threats into opportunities.
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A weakness should never be improved at the expense of a strength.
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Further Information
Hints . . .
It is normal for any business or human being to
have some weaknesses
Never make excuses or get defensive
Be objective and self-critical when conducting a
SWOT analysis
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