A SWOT analysis is a strategic planning tool that helps organizations identify their Strengths, Weaknesses, Opportunities, and Threats related to business competition or project planning. It is an acronym for:
SWOT analysis is important because it provides a structured method for understanding a company's position within its industry and market. It can help:
How to Do a SWOT Analysis?
To conduct a SWOT analysis, you need to reflect on the four components one by one. Answering a set of relevant questions to identify internal/external factors but also positive and negative ones will help you to have a better perspective strategically on the subject you want to analyze.
Look at your resources, capabilities, and things you do well. Consider your competitive advantages and how you add value.
- What does your company do well?
- What unique resources can you draw on?
- What do others see as your strengths?
Consider areas where you could improve, where you lack resources, or where others have an advantage over you.
- What could your company improve?
- Where do you have fewer resources than others?
- What are others likely to see as weaknesses?
Look at the market and consider trends, shifts, and changes that could serve as opportunities.
- What opportunities are open to you?
- What trends could you take advantage of?
- How can you turn your strengths into opportunities?
Consider the challenges you face, including competitors, changes in market conditions, or any other potential roadblocks.
- What threats could harm you?
- What is your competition doing?
- What threats do your weaknesses expose you to?
If you're looking for a SWOT analysis template in Word, we have one that you can download, customize and edit free of charge. It has details of the key questions for all the 4 areas to address, to help you with the overall preparation.
The SWOT analysis was developed at the Stanford Research Institute in the 1960s under the funding of Fortune 500 companies. Albert Humphrey is credited with the original creation of this strategic planning tool.