SWOT Analysis

SWOT Analysis
Discover New Opportunities, Manage and

Eliminate Threats

SWOT Analysis is a useful technique for
understanding your Strengths and Weaknesses,
and for identifying both the Opportunities open
to you and the Threats you face.
Used in a business context, it helps you to carve a sustainable niche in your
market. Used in a personal context , it helps you to develop your career in
a way that takes best advantage of your talents, abilities and opportunities.
This article, video and infographic look at how to use the tool in a business
context.
Click here to view a transcript of this video.

(Click here to learn how to do a Personal SWOT Analysis .)
Business SWOT Analysis

What makes SWOT particularly powerful is that, with a little thought, it
can help you uncover opportunities that you are well-placed to exploit.
And by understanding the weaknesses of your business, you can manage
and eliminate threats that would otherwise catch you unawares.
More than this, by looking at yourself and your competitors using the
SWOT framework, you can start to craft a strategy that helps you
distinguish yourself from your competitors, so that you can compete
successfully in your market.
How to Do a SWOT Analysis

You can use it in two ways – as a simple icebreaker helping people get
together to "kick off" strategy formulation, or in a more sophisticated way
as a serious strategy tool.
Note:
Many people attribute SWOT Analysis to Alber S. Humphrey, however,
there has been some debate on the originator of the tool, as discussed in
the International Journal of Business Research.
Tip:
Strengths and weaknesses are often internal to your organization, while
opportunities and threats generally relate to external factors. For this
reason, SWOT is sometimes called Internal-External Analysis and the
SWOT Matrix is sometimes called an IE Matrix.
SWOT Template
To help you to carry out your analysis, download and print off our
free worksheet, and write down answers to the following questions.
Strengths
 What advantages does your organization have?
 What do you do better than anyone else?
 What unique or lowest-cost resources can you draw upon that others
can't?
 What do people in your market see as your strengths?
 What factors mean that you "get the sale"?
 What is your organization's Unique Selling Proposition (USP)?
Consider your strengths from both an internal perspective, and from the
point of view of your customers and people in your market.
Also, if you're having any difficulty identifying strengths, try writing down
a list of your organization's characteristics. Some of these will hopefully be
strengths!
When looking at your strengths, think about them in relation to your

competitors. For example, if all of your competitors provide high quality
products, then a high quality production process is not a strength in your
organization's market, it's a necessity.
Weaknesses
 What could you improve?
 What should you avoid?
 What are people in your market likely to see as weaknesses?
 What factors lose you sales?
Again, consider this from an internal and external perspective: do other
people seem to perceive weaknesses that you don't see? Are your
competitors doing any better than you?
It's best to be realistic now, and face any unpleasant truths as soon as
possible.
Opportunities
 What good opportunities can you spot?
 What interesting trends are you aware of?
Useful opportunities can come from such things as:
 Changes in technology and markets on both a broad and narrow

scale.
 Changes in government policy related to your field.
 Changes in social patterns, population profiles, lifestyle changes, and
so on.
 Local events.
Tip:
A useful approach when looking at opportunities is to look at your
strengths and ask yourself whether these open up any opportunities.
Alternatively, look at your weaknesses and ask yourself whether you could
open up opportunities by eliminating them.
Threats
 What obstacles do you face?
 What are your competitors doing?
 Are quality standards or specifications for your job, products or
services changing?
 Is changing technology threatening your position?
 Do you have bad debt or cash-flow problems?
 Could any of your weaknesses seriously threaten your business?
Tip:
When looking at opportunities and threats, PEST Analysis can help to
ensure that you don't overlook external factors, such as new government
regulations, or technological changes in your industry.
Using SWOT Analysis in Project
Management and Marketing
If you're using SWOT as a serious tool (rather than as a casual "warm up"
for strategy formulation), make sure you're rigorous in the way you apply
it:
 Only accept precise, verifiable statements ("Cost advantage of

$10/ton in sourcing raw material x", rather than "Good value for
money").
 Ruthlessly prune long lists of factors, and prioritize them, so that
you spend your time thinking about the most significant factors.
 Make sure that options generated are carried through to later stages
in the strategy formation process.
 Apply it at the right level – for example, you might need to apply the
tool at a product or product-line level, rather than at the much vaguer
whole company level.
 Use it in conjunction with other strategy tools (for example, USP
Analysis and Core Competence Analysis ) so that you get a
comprehensive picture of the situation you're dealing with.
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Note:
You could also consider using the TOWS Matrix . This is quite similar to
SWOT in that it also focuses on the same four elements of Strengths,
Weaknesses, Opportunities, and Threats. But TOWS can be a helpful
alternative because it emphasizes the external environment, while SWOT
focuses on the internal environment.
SWOT Example
A small start-up consultancy might draw up the following SWOT
Analysis:
Strengths
 We are able to respond very quickly as we have no red tape, and no
need for higher management approval.
 We are able to give really good customer care, as the current small
amount of work means we have plenty of time to devote to customers.
 Our lead consultant has a strong reputation in the market.
 We can change direction quickly if we find that our marketing is not
working.
 We have low overheads, so we can offer good value to customers.
Weaknesses
 Our company has little market presence or reputation.
 We have a small staff, with a shallow skills base in many areas.
 We are vulnerable to vital staff being sick or leaving.
 Our cash flow will be unreliable in the early stages.
Opportunities
 Our business sector is expanding, with many future opportunities for
success.
 Local government wants to encourage local businesses.
 Our competitors may be slow to adopt new technologies.
Threats
 Developments in technology may change this market beyond our
ability to adapt.
 A small change in the focus of a large competitor might wipe out any
market position we achieve.
As a result of their analysis, the consultancy may decide to specialize in
rapid response, good value services to local businesses and local
government.
Marketing would be in selected local publications to get the greatest

possible market presence for a set advertising budget, and the consultancy
should keep up-to-date with changes in technology where possible.
SWOT Analysis Infographic

Click on the image below to see SWOT Analysis represented in an
infographic:
Key Points
SWOT Analysis is a simple but useful framework for analyzing your
organization's strengths and weaknesses, and the opportunities and threats
that you face. It helps you focus on your strengths, minimize threats, and
take the greatest possible advantage of opportunities available to you.
It can be used to "kick off" strategy formulation, or in a more sophisticated

way as a serious strategy tool. You can also use it to get an understanding
of your competitors, which can give you the insights you need to craft a
coherent and successful competitive position.
When carrying out your analysis, be realistic and rigorous. Apply it at the
right level, and supplement it with other option-generation tools where
appropriate.

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SWOT Analysis

Discover New Opportunities, Manage and

Click here to view a transcript of this video.

Business SWOT Analysis

How to Do a SWOT Analysis

When looking at your strengths, think about them in relation to your

 Changes in technology and markets on both a broad and narrow

 Only accept precise, verifiable statements ("Cost advantage of

Finding This Article Useful?

Marketing would be in selected local publications to get the greatest

SWOT Analysis Infographic

It can be used to "kick off" strategy formulation, or in a more sophisticated

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