Simplifying Business Strategies

What is a SWOT Analysis? A Complete Guide to SWOT Analysis

Anyone working in the corporate scene will come across the term SWOT analysis at least once throughout their working journey. This term, as much as one would like to think, does not involve an evaluation of law enforcement military response units but rather the action of taking one hard look at a company. Irrespective of whether this company consists of two people or thousands, a powerful way to evaluate any organization or project is by conducting what is known as a SWOT analysis.

SWOT Analysis – What Is It?

SWOT stands for the Strengths, Weaknesses, Opportunities, and Threats of an organization, and, therefore, a SWOT analysis is an organization’s technique for assessing these four core elements. By conducting a SWOT analysis, a person is ultimately creating a synthesized overview of the current state of their organization.

In order for organizations to understand the current state it is in, determine where it is going next, and be informed on what strategic actions will achieve the future it desires, a SWOT assessment will need to take place.

What makes a SWOT assessment good, however, is how expert insights and data that summarize an organization’s current state is organized and synthesized, and like any other tool for planning, a SWOT analysis will only be as good as the information it comprises.

A Breakdown of the Definition for SWOT Analysis

1. Strengths

Strengths are the first element of a SWOT analysis, and it addresses the strengths an organization has currently, representing what it is that a company or project does especially well and how these strengths should be built on in hopes of a stronger future for the organization. Strengths include:

  • Things an organization does well
  • Qualities that separate an organization from its competitors
  • Internal resources
  • Tangible assets

Overall, the strengths can be things that are intangible, for example, an organization’s brand attributes. It could also be things that are more easily defined, for example, having a unique selling proposition for a product line in particular. A company’s literal human recourses, its people, could also be labeled as a strength should they possess strong leadership qualities or great teamwork.

2. Weaknesses

What are the things holding a project or business back? Weaknesses refer to an organization’s internal weaknesses, which are those that interfere with or limit a company’s capability to reach its desired future state. Things an organization does not perform well in or needs to improve on are considered to be weaknesses; this could be anything from:

  • Things a company lacks
  • Things that a company’s competitors do better
  • Limitations on resources
  • Having an unclear unique selling position

Organizational challenges, such as a shortage of skilled staff, budgetary or other financial limitations, and a lack of USP in a crowded market that is defined clearly are all examples of weaknesses that may be inherent within an organization.

3. Opportunities

The third element is opportunities, and these are described as the external factors that an organization is able to benefit from and act upon. Opportunities are realized only once a company makes the decision to act upon them and, therefore, are often the drivers of an organization’s growth strategies.

In other words, opportunities include anything that may improve sales, grow an organization, or advance a company’s mission, such as:

  • Having few competitors in the area
  • Underserved markets for certain products
  • Media or press coverage
  • Population shows emerging needs for a company’s products or services

There are opportunities all around. An organization that is struggling to keep up with the number of leads being generated by its marketing team has an opportunity. Developing a new idea that will give way to the opening of markets and demographics is another example of an opportunity.

4. Threats

Threats are the final element of a SWOT analysis, and they are any external barriers or forces that prevent a company from reaching its objectives. A threat is anything that poses a risk to either the organization itself or the likelihood of its growth or success. These include:

  • A changing regulatory environment
  • Emerging competitors
  • Negative media or press coverage
  • Shifting customer attitude towards a company

Virtually anything and everything that is able to potentially jeopardize the future of a business or its projects will be regarded as a threat, especially if it is a change in regulatory law or financial risks.

What Makes a SWOT Analysis Great?

Before an organization even begins to plan, it is essential that it completes a SWOT analysis for a current state assessment. Notably, a SWOT analysis is considered useful when a company’s team can provide answers to three critical questions. The answer to these questions will help inform an organization about its growth and where its focus needs to be during planning.

Thus, a great SWOT analysis will help provide answers to the following questions:

How to Succeed, and Why?

A SWOT analysis is done to help create an understanding of what a company is good at and what it needs to work on. By being able to identify the strengths and weaknesses, as well as the market opportunities, a foundation is created detailing what a company should build on or capitalize on in order to see its success.

What Kind of Growth Opportunities Exist, and Why?

As already mentioned, a SWOT analysis outlines an organization’s growth opportunities. Therefore, a good SWOT analysis will help a company identify its growth opportunities so that it can prioritize them.

How to Better Serve Customers, and Why?

One of the many outputs of a SWOT analysis identifies ways in which an organization is able to better serve its customers. This could be growing a strength, assessing a customer-prioritized weakness, or simply seizing new opportunities. A great SWOT analysis will have an organization thinking about all the best ways to serve its customers.

Internal Versus External Factors

Strengths, weaknesses, opportunities, and threats are the elements common to all SWOT analyses, and, as a result, organizations have further sorted these four elements into two distinct subgroups, namely internal and external.

Internal Factors

Internal dynamics that an organization is able to control are reflected by a company’s strengths and weaknesses. Therefore, when a company identifies a strength or weakness, it is equally as important for it to take into consideration the internal factors that assist a business in meeting the need of its customers, like customer service. Customer service, among other things, consider customers’ needs, as well as the current markets’ that are within an entity’s control.

As a general rule of thumb, strengths are considered to be significant when they are able to help an entity meet customer needs. In contrast, weaknesses that call for inclusion in a company’s SWOT analysis are those that may not be clear to the customers but still somehow negatively impact the experience a customer has.

To put this into illustration, a high churn rate, for example, is considered to be a weakness for a company; however, a company can still improve a high churn rate as it is still within its control, making high churn rates an internal factor.

External Factors

Opportunities and threats are regarded as external to an entity, as they are things that may be influenced but cannot be completely controlled. Both present and anticipated future external conditions that will likely affect an entity are captured by opportunities and threats.

Overall, opportunities are conditions that favor an organization and, if acted upon, may result in rewards for that organization. When it comes to opportunities, businesses need to think along the lines of current and new ones.

On the other hand, threats are the barriers that block an organization from reaching the rewards it desires. Threats, in relation to technical, social, political, and economic factors as well as threats from competitors, should all be considered by an entity.

To put this into perspective, emerging competitors are regarded as a threat to an entity; however, there is very little that can be done about this, thus making emerging competitors an external factor.

Subcategorizing the elements into internal and external factors isn’t necessarily critical to the success of SWOT analyses; however, it has proven to be helpful in terms of a company’s next steps or its degree of control over a given opportunity or problem.

Tips for Building an Effective SWOT

  • Organizations should use data wherever possible, rather than only relying on opinions – companies should consider listing all of their current gathered data, delegate responsibility to gather additional data, and populate their SWOT analysis with what the data is saying.
  • A company should be writing more than one or two words for each – more detail, descriptive nouns, and adjectives should be used to ensure that an entity’s planning team understands the context. Instead of a company labeling recruiting as its weakness, it should rather write that the time to fill the vacant positions in the company will be four months.
  • SWOT entries should result in action – if a company uses its energy to add something to its SWOT, it should be something that can be acted on and leveraged or something that would make a difference. If that is not the case, then it should not be included.
  • Internal opportunities identified in the “Opportunities” section lead to the assessment falling apart – if it is a must for a company to identify internal opportunities, then they must be separated from the external opportunities.
  • Multiple levels of an organization should engage in the brainstorming process for great ideas to surface – a SWOT should be built with input that reaches far beyond an organization’s executive team. Involving front-line staff and managers in the process is crucial for a company to create a comprehensive assessment of its current state.

Are There Alternatives to a SWOT Analysis?

Luckily, there are alternatives to conducting a SWOT analysis. However, all alternatives have been designed to help an organization reach a complete analysis of its current state. These alternatives are:

TOWS Analysis

TOWS is the backward acronym for SWOT, and this analysis begins with external threats rather than internal strengths.


Political, Economic, Sociological, Technological, Legal, and Environmental forces are what PESTLE stands for. This alternative is one that takes a deeper dive into an organization’s external analysis section of a SWOT. PESTLE analysis looks at all of the external factors that may potentially impact an organization.

An Example of a SWOT Analysis

A SWOT analysis can either be applied to an entire organization, or it can be applied to individual projects within an organization’s department. SWOT analyses are most commonly used at a more organizational level in order to determine the proximity between a company and its success benchmarks and growth trajectories. However, a SWOT analysis can also be used to ascertain the performance of a particular project in terms of its initial projections.

SWOT analyses are also often presented in the form of a grid-like matrix that has four distinct quadrants, with each quadrant representing one of the four core elements. The way in which a SWOT analysis presents itself proves to be beneficial for determining which elements are internal, and which ones are external, and a comprehensive range of data is neatly displayed in a predominately visual and easy-to-read format.

Strengths Opportunities
  • A highly qualified and dedicated team of administrators and teachers that have very little turnover.
  • Efficiency in setting guidelines and providing staff with clarity.
  • No overhead of waste. 85% of funding is directed toward teachers and kids in the classroom.
  • The opportunity for a new website that will help make communication between parents and the school quicker and easier.
  • There are new mediums – for example, social media, YouTube, or podcasts that present new ways for students and parents to be reached.
  • New construction and growth in population in the area are giving rise to the growth in enrollment.
Weaknesses Threats
  • Too much time is spent in meetings
  • Collaboration between the departments is lacking.
  • Have technology that is dated, involving the curriculum and email systems.
  • The pandemic has led students to shift into permanent virtual learning.
  • There is a loss of state-level funding.
  • Population and construction in other areas are also growing, which threatens enrollment levels due to the increase in the choice of schools.