SWOT Analysis

SWOT analysis is a very simple but powerful technique used to evaluate the organization’s strengths and weaknesses against its opportunities and threats in the macro-environment in order to develop an effective business strategy.  While strengths and weaknesses are internal factors and compromise attributes that an organization can change; threats and opportunities are external factors and are therefore out of a company’s control. By analyzing these four variables, an organization can assess their current situation and subsequently determine an appropriate action plan to move forward.

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats and each one is more extensively analyzed below:

Strengths

Strengths describe what the organization is good at and are considered internal attributes that the company has control over.  A firm’s strengths are the attributes that differentiate it from the competition and can range from intangible attributes such as a strong brand image to tangible asses like proprietary technology or a specific product. Identifying the organization’s strengths is the first step to the SWOT analysis and provides the basis for the rest to follow.

Weaknesses

On the other hand, weaknesses are the skills and qualities that your company lacks or things that your competition does better than you. These are again internal to your company and can always be changed, adapted or improved. Weaknesses may be range from tangible assets that the company is in need to communication gaps between the teams. Becoming self-aware of what is holding your company back is the first step to change.

Opportunities

Opportunities are external, positive factors in the business environment that could provide the organization with a competitive advantage. These could cover everything that could enhance the growth rate of the company, increase the customer base, increase sales and profits or even boos your employee morale. A company should always pay close attention to upcoming events, changes in regulations or new trends that could benefit the firm in one way or another. 

Threats

On the opposite side of the coin, threats are external, negative factors that the organization has no control over. Everything that poses a risk to the organization or hinders its rate of growth is considered a threat. This could be new entrants in the marketplace, changes in the regulatory environment and financial risks. One way to avoid undesirable situations that could harmful to your organization is to put contingency plans in place in order to evade these situations before they occur.


SWOT analysis is a great tool for assessing a company’s situation and identifying the key points of focus. It’s powerful to talk through the SWOT analysis during company meetings since brainstorming ideas can reflect on factors you were unaware of and would not have been captured from individual work. Conducting a SWOT analysis not only pinpoints what your organization is good and bad at, but also develop and implement an appropriate business strategy plan to address problems and take advantage of the opportunities within the business environment. The SWOT analysis can be used in conjunction with other strategic tools such as PESTLE analysis for a more thorough situational assessment of the business landscape.

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