swot analysis in conjunction with the business plan

– Zeeshan Akhtar , head of marketing at Mailmodo

“It's easy to fall into a groupthink because usually, SWOT analysis is conducted by management. What we did differently in this case, given the issue we wanted to tackle, was involve an external consultant as well as internal employees to get more diverse perspectives and creative solutions.”

– Zach Dannett , cofounder at Tumble

“ During a SWOT analysis, delving deep into competitors' operations to uncover their vulnerabilities can be invaluable. For instance, discovering a key competitor struggling with customer service inefficiencies through reviews and market feedback can highlight an opportunity for differentiation.”

– Harrison Tang , CEO of Spokeo

“Set priorities and focus on the most impactful areas first. Allocate resources strategically, prioritizing initiatives that promise the greatest returns.”

Arham Khan , CEO of Pixated

“ In terms of leveraging the results, businesses need to be proactive. Don't just see it as a one-time report - use it as a roadmap. Whether reinforcing strengths, addressing weaknesses or pursuing opportunities, SWOT should influence strategic planning and product roadmaps. Revisit it annually too, as situations evolve. ”

– Kelly Indah , editor-in-chief at Increditools

Ultimately, a SWOT analysis can measure and tackle both big and small challenges, from deciding whether or not to launch a new product to refining your social media strategy.

When conducting your own SWOT analysis, you may face problems like data overload, differing opinions, and actionability. I certainly did. However in my experience, these problems can be solved by:

• Focusing on the most relevant information and filtering out the noise.
• Facilitating discussions to reach an agreement or using a neutral moderator.
• Ensuring each point is specific and actionable, providing clear direction for your strategies.

I will conclude this piece by saying don‘t underestimate the power of taking a step back from time to time to assess where you’ve been, where you‘re at, and where you’re going.

I firmly believe that regularly conducting a SWOT analysis is critical for any entrepreneur looking to grow.

Editor's note: This post was originally published in May 2018 and has been updated for comprehensiveness.

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How to Do a SWOT Analysis for Your Business

Susan Ward wrote about small businesses for The Balance for 18 years. She has run an IT consulting firm and designed and presented courses on how to promote small businesses.

A SWOT analysis compares internal strengths and weaknesses with external opportunities and threats to create an action plan. A SWOT analysis is most commonly used as a business planning tool, but it also is helpful for personal development.

For small businesses , a SWOT analysis can be used as:

• A quick way to examine a small business idea.
• A springboard for annual business planning .
• The basis of a marketing action plan.
• A starting point for business contingency planning .
• A tool for involving staff/employees in business planning , for example, solving particular problems or achieving certain  business goals .
• A self-evaluation tool to gauge how you're doing managing staff or running your business.

How to Do a SWOT Analysis

A SWOT analysis is organized in a matrix or table form with two rows and two columns. 

The first row represents factors internal to your organization over which you have some degree of control. Strengths are listed in one column and weaknesses in another. Factors to consider include:

• Your financial situation (income, cash flow, debt, investments, etc.).
• Your market share.
• The relative skills of your employees and/or contractors.
• Your physical premises, location, and equipment.
• Assets such as patents or copyrights.

The second row represents factors external to your organization over which you have  little to no control. Opportunities are listed in one column and threats in another. Factors to consider include:

• The state of the economy and your particular industry.
• Your market share and the possibility of increasing or decreasing competition for your products/services.
• Your ability to retain or hire employees or contractors as needed.
• Regulatory changes that may affect your business.
• The ability to obtain financing (changing interest rates, increased loan requirements, etc.).

Fill in the boxes in your table, according to the specific purpose of your SWOT analysis so it looks something like this:

SWOT Analysis Process

Always choose a specific purpose for your SWOT analysis. Otherwise, you'll just end up with a bunch of generalizations that won’t provide specific direction for an action plan.

Because a SWOT analysis is a subjective process, different groups of people or individuals may come up with different results for the same stated purpose or topic. One of the best ways to take advantage of this is to use an outside facilitator. Employees, customers, partners, and other stakeholders are more likely to give honest feedback to a consultant who is not part of your orgnaization. If management oversees the process, feedback might be limited to wehat stakeholders think management wants to hear.

Remember that a SWOT analysis is not the be-all and end-all of business planning. It works best as a starting point for small-business planning used in conjunction with other business-planning tools, such as  PEST  (political, economic, sociocultural, and technological) analysis. This ensures that you don't overlook critical external factors, such as new government regulations or technological changes in your industry when you're looking at opportunities and threats.

Using the SWOT Analysis

Once you have completed the table, use it to create a strategy or strategies that will make your business more competitive. Four questions to use as a thinking/discussion guide include:

• Do strengths open any opportunities?
• How can we convert weaknesses to strengths?
• What do we have to do to take advantage of opportunities?
• How do we best neutralize threats?

Management and employees can come together to answer these questions developed from the  SWOT analysis. Again, continuing to use an outside facilitator can help everyone stay focused and perhaps introduce perspectives those inside the organization are less likely to consider.

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SWOT analysis: Examples and templates

A SWOT analysis helps you identify strengths, weaknesses, opportunities, and threats for a specific project or your overall business plan. It’s used for strategic planning and to stay ahead of market trends. Below, we describe each part of the SWOT framework and show you how to conduct your own.

Whether you’re looking for external opportunities or internal strengths, we’ll walk you through how to perform your own SWOT analysis, with helpful examples along the way. 

What is a SWOT analysis?

A SWOT analysis is a technique used to identify strengths, weaknesses, opportunities, and threats for your business or even a specific project. It’s most widely used by organizations—from small businesses and non-profits to large enterprises—but a SWOT analysis can be used for personal purposes as well. 

While simple, a SWOT analysis is a powerful tool for helping you identify competitive opportunities for improvement. It helps you improve your team and business while staying ahead of market trends.

What does SWOT stand for?

SWOT is an acronym that stands for: 

Opportunities

When analyzed together, the SWOT framework can paint a larger picture of where you are and how to get to the next step. Let’s dive a little deeper into each of these terms and how they can help identify areas of improvement. 

Strengths in SWOT refer to internal initiatives that are performing well. Examining these areas helps you understand what’s already working. You can then use the techniques that you know work—your strengths—in other areas that might need additional support, like improving your team’s efficiency . 

When looking into the strengths of your organization, ask yourself the following questions:

What do we do well? Or, even better: What do we do best?

What’s unique about our organization?

What does our target audience like about our organization?

Which categories or features beat out our competitors?

 Example SWOT strength:

Customer service: Our world-class customer service has an NPS score of 90 as compared to our competitors, who average an NPS score of 70.

Weaknesses in SWOT refer to internal initiatives that are underperforming. It’s a good idea to analyze your strengths before your weaknesses in order to create a baseline for success and failure. Identifying internal weaknesses provides a starting point for improving those projects.

Identify the company’s weaknesses by asking:

Which initiatives are underperforming and why?

What can be improved?

What resources could improve our performance?

How do we rank against our competitors?

Example SWOT weakness:

E-commerce visibility: Our website visibility is low because of a lack of marketing budget , leading to a decrease in mobile app transactions.

Opportunities in SWOT result from your existing strengths and weaknesses, along with any external initiatives that will put you in a stronger competitive position. These could be anything from weaknesses that you’d like to improve or areas that weren’t identified in the first two phases of your analysis. 

Since there are multiple ways to come up with opportunities, it’s helpful to consider these questions before getting started:

What resources can we use to improve weaknesses?

Are there market gaps in our services?

What are our business goals for the year?

What do your competitors offer?

Example SWOT opportunities:

Marketing campaign: To improve brand visibility, we’ll run ad campaigns on YouTube, Facebook, and Instagram.

Threats in SWOT are areas with the potential to cause problems. Different from weaknesses, threats are external and ‌out of your control. This can include anything from a global pandemic to a change in the competitive landscape. 

Here are a few questions to ask yourself to identify external threats:

What changes in the industry are cause for concern?

What new market trends are on the horizon?

Where are our competitors outperforming us?

Example SWOT threats:

New competitor: With a new e-commerce competitor set to launch within the next month, we could see a decline in customers.

SWOT analysis example

One of the most popular ways to create a SWOT analysis is through a SWOT matrix—a visual representation of strengths, weaknesses, opportunities, and threats. The matrix comprises four separate squares that create one larger square. 

A SWOT matrix is great for collecting information and documenting the questions and decision-making process . Not only will it be handy to reference later on, but it’s also great for visualizing any patterns that arise. 

Check out the SWOT matrix below for a simple example. As you can see, each of the quadrants lists out the company's strengths, weaknesses, opportunities, and threats.

When used correctly and effectively, your matrix can be a great toolkit for evaluating your organization’s strengths and weaknesses. 

How to do a SWOT analysis, with examples 

A SWOT analysis can be conducted in a variety of ways. Some teams like to meet and throw ideas on a whiteboard, while others prefer the structure of a SWOT matrix. However you choose to make your SWOT analysis, getting creative with your planning process allows new ideas to flow and results in more unique solutions. 

There are a few ways to ensure that your SWOT analysis is thorough and done correctly. Let’s take a closer look at some tips to help you get started.

Tip 1: Consider internal factors 

Often, strengths and weaknesses stem from internal processes. These tend to be easier to solve since you have more control over the outcome. When you come across internal factors, you can start implementing improvements in a couple of different ways.

Meet with department stakeholders to form a business plan around how to improve your current situation.

Research and implement new tools, such as a project management tool , that can help streamline these processes for you. 

Take immediate action on anything that can be changed in 24 hours or less. If you don’t have the capacity, consider delegating these items to others with deadlines. 

The way you go about solving internal factors will depend on the type of problem. If it’s more complex, you might need to use a combination of the above or a more thorough problem management process.

Tip 2: Evaluate external factors

External factors stem from processes outside of your control. This includes competitors, market trends, and anything else that’s affecting your organization from the outside in. 

External factors are trickier to solve, as you can’t directly control the outcome. What you can do is pivot your own processes in a way that mitigates negative external factors. 

You can work to solve these issues by:

Competing with market trends

Forecasting market trends before they happen

Improving adaptability to improve your reaction time

Track competitors using reporting tools that automatically update you as soon as changes occur 

While you won’t be able to control an external environment, you can control how your organization reacts to it. 

Let’s say, for instance, that you’re looking to compete with a market trend. For example, a competitor introduced a new product to the market that’s outperforming your own. While you can’t take that product away, you can work to launch an even better product or marketing campaign to mitigate any decline in sales. 

Tip 3: Hold a brainstorming session

Brainstorming new and innovative ideas can help to spur creativity and inspire action. To host a high impact brainstorming session, you’ll want to: 

Invite team members from various departments. That way, ideas from each part of the company are represented. 

Be intentional about the number of team members you invite, since too many participants could lead to a lack of focus or participation. The sweet spot for a productive brainstorming session is around 10 teammates. 

Use different brainstorming techniques that appeal to different work types.

Set a clear intention for the session.

Tip 4: Get creative

In order to generate creative ideas, you have to first invite them. That means creating fun ways to come up with opportunities. Try randomly selecting anonymous ideas, talking through obviously bad examples, or playing team building games to psych up the team.

Tip 5: Prioritize opportunities

Now, rank the opportunities. This can be done as a team or with a smaller group of leaders. Talk through each idea and rank it on a scale of one through 10. Once you’ve agreed on your top ideas based on team capabilities, competencies, and overall impact, it’s easier to implement them.

Tip 6: Take action

It’s all too easy to feel finished at this stage —but the actual work is just beginning. After your SWOT analysis, you’ll have a list of prioritized opportunities. Now is the time to turn them into strengths. Use a structured system such as a business case , project plan, or implementation plan to outline what needs to get done—and how you plan to do it.

SWOT analysis template

A SWOT analysis template is often presented in a grid format, divided into four quadrants. Each quadrant represents one of the four elements. 

Use this free SWOT analysis template to jump-start your team’s strategic planning.

Identify the strengths that contribute to achieving your objectives. These are internal characteristics that give you an advantage. Some examples could be a strong brand reputation, an innovative culture, or an experienced management team.

Next, focus on weaknesses. These are internal factors that could serve as obstacles to achieving your objectives. Common examples might include a lack of financial resources, high operational costs, or outdated technology. 

Move on to the opportunities. These are external conditions that could be helpful in achieving your goals. For example, you might be looking at emerging markets, increased demand, or favorable shifts in regulations.

Lastly, let's address threats. These are external conditions that could negatively impact your objectives. Examples include increased competition or potential economic downturns.

Why is a SWOT analysis important?

A SWOT analysis can help you improve processes and plan for growth. While similar to a competitive analysis , it differs because it evaluates both internal and external factors. Analyzing key areas around these opportunities and threats will equip you with the insights needed to set your team up for success.

A SWOT analysis isn’t only useful for organizations. With a personal SWOT analysis, you can examine areas of your life that could benefit from improvement, from your leadership style to your communication skills. These are the benefits of using a SWOT analysis in any scenario. 

1. Identifies areas of opportunity

One of the biggest benefits of conducting an analysis is to determine opportunities for growth. It’s a great starting point for startups and teams that know they want to improve but aren’t exactly sure how to get started. 

Opportunities can come from many different avenues, like external factors such as diversifying your products for competitive advantage or internal factors like improving your team’s workflow . Either way, capitalizing on opportunities is an excellent way to grow as a team.

2. Identifies areas that could be improved

Identifying weaknesses and threats during a SWOT analysis can pave the way for a better business strategy.

Ultimately, learning from your mistakes is the best way to excel. Once you find areas to streamline, you can work with team members to brainstorm an action plan . This will let you use what you already know works and build on your company’s strengths.

3. Identifies areas that could be at risk

Whether you have a risk register in place or not, it’s always crucial to identify risks before they become a cause for concern. A SWOT analysis can help you stay on top of actionable items that may play a part in your risk decision-making process. 

It may be beneficial to pair your SWOT analysis with a PEST analysis, which examines external solutions such as political, economic, social, and technological factors—all of which can help you identify and plan for project risks .

When should you use a SWOT analysis?

You won’t always need an in-depth SWOT analysis. It’s most useful for large, general overviews of situations, scenarios, or your business.

A SWOT analysis is most helpful:

Before you implement a large change—including as part of a larger change management plan

When you launch a new company initiative

If you’d like to identify opportunities for growth and improvement

Any time you want a full overview of your business performance

If you need to identify business performance from different perspectives

SWOT analyses are general for a reason—so they can be applied to almost any scenario, project, or business. 

SWOT analysis: Pros and cons

Although SWOT is a useful strategic planning tool for businesses and individuals alike, it does have limitations. Here’s what you can expect.

The simplicity of SWOT analysis makes it a go-to tool for many. Because it is simple, it takes the mystery out of strategic planning and lets people think critically about their situations without feeling overwhelmed. 

For instance, a small bakery looking to expand its operations can use SWOT analysis to easily understand its current standing. Identifying strengths like a loyal customer base, weaknesses such as limited seating space, opportunities like a rising trend in artisanal baked goods, and threats from larger chain bakeries nearby can all be accomplished without any specialized knowledge or technical expertise.

Versatility

Its versatile nature allows SWOT analysis to be used across various domains. Whether it’s a business strategizing for the future or an individual planning their career path, SWOT analysis lends itself well. 

For example, a tech start-up in the competitive Silicon Valley landscape could employ SWOT to navigate its pathway to profitability. Strengths might include a highly skilled development team; weaknesses could be a lack of brand recognition; opportunities might lie in emerging markets; and threats could include established tech giants. 

Meaningful analysis

SWOT excels in identifying external factors that could impact performance. It nudges organizations to look beyond the present and anticipate potential future scenarios. 

A retail company, for example, could use SWOT analysis to identify opportunities in e-commerce and threats from changing consumer behavior or new competitors entering the market. By doing so, the company can strategize on how to leverage online platforms to boost sales and counteract threats by enhancing the customer experience or adopting new technologies.

Subjectivity and bias

The subjective nature of SWOT analysis may lead to biases. It relies heavily on individual perceptions, which can sometimes overlook crucial data or misinterpret information, leading to skewed conclusions. 

For example, a manufacturing company might undervalue the threat of new entrants in the market due to an overconfidence bias among the management. This subjectivity might lead to a lack of preparation for competitive pricing strategies, ultimately affecting the company's market share.

Lack of prioritization

SWOT analysis lays out issues but falls short on prioritizing them. Organizations might struggle to identify which elements deserve immediate attention and resources. 

For instance, a healthcare provider identifying numerous opportunities for expansion into new services may become overwhelmed with the choices. Without a clear way to rank these opportunities, resources could be spread too thinly or given to projects that do not have as much of an impact, leading to less-than-ideal outcomes.

Static analysis

Since SWOT analysis captures a snapshot at a particular moment, it may miss the evolving nature of challenges and opportunities, possibly leading to outdated strategies. An example could be a traditional retail business that performs a SWOT analysis and decides to focus on expanding physical stores, overlooking the growing trend of e-commerce. As online shopping continues to evolve and gain popularity, the static analysis might lead to investment in areas with diminishing returns while missing out on the booming e-commerce market trend.

SWOT analysis FAQ

What are the five elements of swot analysis.

Traditionally, SWOT stands for its four main elements: strengths, weaknesses, opportunities, and threats. However, a fifth essential element often overlooked is "actionable strategies." Originally developed by Albert Humphrey, SWOT is more than just a list—it's a planning tool designed to generate actionable strategies for making informed business decisions. This fifth element serves to tie the other four together, enabling departments like human resources and marketing to turn analysis into actionable plans.

What should a SWOT analysis include?

A comprehensive SWOT analysis should focus on the internal and external factors that affect your organization. Internally, consider your strong brand and product line as your strengths, and maybe your supply chain weaknesses. Externally, you'll want to look at market share, partnerships, and new technologies that could either pose opportunities or threats. You should also account for demographics, as it helps in market targeting and segmentation.

How do you write a good SWOT analysis?

Writing an effective SWOT analysis begins with research. Start by identifying your strengths, like a strong brand, and your weaknesses, like a small human resources department. Following that, look outward to find opportunities, possibly in technological advancement, and threats, like fluctuations in market share. Many businesses find it helpful to use a free SWOT analysis template to structure this information. A good SWOT analysis doesn't just list these elements; it integrates them to provide a clear roadmap for making business decisions.

What are four examples of threats in SWOT analysis?

New technologies: Rapid technological advancement can make your product or service obsolete.

Supply chain disruptions: Whether due to natural disasters or geopolitical tensions, an unstable supply chain can seriously jeopardize your operations.

Emerging competitors: New players entering the market can erode your market share and offer alternative solutions to your customer base.

Regulatory changes: New laws or regulations can add costs and complexity to your business, affecting your competitiveness.

How do you use a SWOT analysis?

Once you've completed a SWOT analysis, use the results as a decision-making aid. It can help prioritize actions, develop strategic plans that play to your strengths, improve weaknesses, seize opportunities, and counteract threats. It’s a useful tool for setting objectives and creating a roadmap for achieving them.

Plan for growth with a SWOT analysis

A SWOT analysis can be an effective technique for identifying key strengths, weaknesses, opportunities, and threats. Understanding where you are now can be the most impactful way to determine where you want to go next. 

Don’t forget, a bit of creativity and collaboration can go a long way. Encourage your team to think outside of the box with 100+ team motivational quotes .

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A SWOT analysis can help a small business owner or business assess a company’s position to determine the most optimal strategy going forward. This business practice can help you identify what you’re doing well, what you want to do better, and what kinds of obstacles you might encounter along the way.

This guide will walk you through everything you need to know about a SWOT analysis: what it is, how it works, and how to do it. We’ll also include an example and a template to help guide you as you perform your own SWOT analysis.

What Is a SWOT Analysis?

A SWOT analysis is a strategic planning technique that outlines an organization’s strengths, weaknesses, opportunities, and threats. Assessing business competition in this way can help an organization plan strategically and execute more effectively.

The 4 Parts of a SWOT Analysis

Your business’s strengths SWOT section should include anything that your business does differently or better than competitors. Think about your unique value proposition, trends you’ve noticed in positive customer feedback, operational strengths, and company culture. This section is the perfect place to name and celebrate anything you’re already doing well.

Don’t be afraid to toot your own horn (while also remaining objective). Clearly identifying your business’s strengths not only helps you keep your spirits balanced as you address your weaknesses, it will also give you a sense of where to concentrate your resources. It’s easier to build a successful business when you’re working towards something, rather than acting in opposition.

Questions to help you determine your strengths:

• What is your business’s unique value proposition?
• What common compliments do you receive from your customers?
• What does your business do particularly well?
• How do you operate differently from your competitors?
• What gives you an edge on the competition ? (This can include something product-related like “better access to raw materials” or “lower cost of goods,” or it can be an internal strength like “strong company culture” or “employee motivation.”)
• What might your competitors name as your strengths?

Your weaknesses are the areas in which the business has room for improvement. You should include structural weaknesses in this section—those that relate to your systems, procedures, resources, and personnel. This is a great place to look at common feedback from employees (either from exit interviews, anonymous surveys, or other sources) and recurring customer complaints.

Questions to help you determine your weaknesses:

• What areas of your business could stand to improve?
• What are common hiccups in your customer experience ?
• How do you use your resources? Is there room for improvement?
• What improvements are needed in your employee experience?
• What weaknesses might your customers see that you tend to overlook?
• What weaknesses might your competitors think you have?

Opportunities

Your opportunities are the positive, external factors that your business might benefit from… but cannot directly control. That might include market opportunities, consumer purchasing trends, legal or regulatory changes, population changes, the cost of raw materials, and more. For example, businesses that provide accessibility for aging seniors might recognize the forthcoming “silver tsunami” of Baby Boomers entering the target demographic. This would be a clear opportunity to expand their customer base.

Questions to help you determine your opportunities:

• What trends might affect your industry?
• How might the right talent create new opportunities?
• your customers ask for anything you don’t offer (but could)?
• How might population changes affect your business opportunities? (think: generational shifts)
• Is there a need in the industry that you’re not creating, but could?
• Do your competitors have any weaknesses that could be opportunities for you?
• Is there a way to repackage current products to demand a higher price?
• Are there any new, or potential, regulatory or tax changes that might provide a new opportunity?

Your threats are the external factors that have the potential to negatively affect your business. A threat can be specific and competitor-based or more structural. buy clomid online buy clomid online no prescription Examples of structural threats could be supply chain challenges, shifts in market requirements, talent shortages, or changes to social media algorithms (especially if your business heavily relies on social media marketing). You might also face a threat (or threats) from your competitors. This can include the way they operate, how they’re marketing, or the products they offer.

Identifying every external threat your business faces is essential for your business to identify how it must adapt in order to meet and overcome these challenges.

Questions to help you determine threats:

• What happens if a supplier or manufacturer runs out of materials you use?
• What if a natural disaster (like a pandemic) strikes? buy amitriptyline online buy amitriptyline online no prescription
• Is your market shrinking?
• What are your competitors offering? Are they expanding or offering different products?
• How are your competitors marketing?
• What technological threats are you vulnerable to (website security, social media algorithm changes)?
• Are there any businesses that aren’t competitors now but could become competitors in the future?

The Benefits of a SWOT Analysis

SWOT analyses offer a variety of benefits for businesses and personal brands. Here are some of the most common benefits of a SWOT analysis:

• You can use it to determine a strategic plan.
• You can use it to drive an innovative, informed marketing plan.
• It can help you identify external opportunities.
• It can help you identify external threats.
• It can reveal environmental factors that might affect your business, either positively or negatively.
• You can develop a plan for how to tackle internal weaknesses.

How to Do a SWOT Analysis

You can approach SWOT analyses in multiple ways. You can conduct a personal SWOT analysis for yourself as an individual, you can perform a marketing SWOT analysis to determine a competitive advantage in your marketing , or you can use a SWOT analysis as a part of broader strategic planning.

Whatever your end goal for a SWOT analysis, follow these steps.

1. Create a SWOT Matrix

Use a SWOT template or create your own. You can create your SWOT framework on the computer or on a whiteboard—if you choose to do the latter, be sure that someone is in charge of recording the responses so that you don’t lose key insights (you can also take a picture at the end of the SWOT session).

2. Assemble Key Stakeholders

A SWOT analysis is most effective when it collects a variety of perspectives. Gathering key stakeholders with various perspectives will help you see more than you would have seen alone. Marketing leaders might be able to give you a more specific sense of the opportunities and threats related to your content marketing efforts. Your people team is closest to all personnel changes and feedback, so they’ll have the clearest sense of an organization’s strengths and what is driving employee retention (or challenging it). Sales leaders can help translate opportunities into a cohesive business strategy.

It’s simple: when it comes to a SWOT analysis, more heads are better than one.

3. Brainstorm Around Your Companies’ Strengths, Weaknesses, Opportunities, and Threats

Go through each field of the SWOT diagram, spending some time with each one. Ask the group the guiding questions to ensure you’re developing a comprehensive picture of the internal and external environment. There are no bad ideas in brainstorming. You’re just trying to get thoughts flowing. Something that feels like a “bad idea” might lead to discovering a potential threat you’d never thought of before or nuanced analysis of how you stack up to your nearest competitor. The key here is to keep the brainstorm going.

4. Record Relevant Thoughts in Their Respective Sections

As you brainstorm, record points and ideas when they are relevant. At the end of the session, your SWOT analysis should leave you with a clear sense of the organization’s strengths and company’s weaknesses that you can use to guide your strategy formulation.

5. Edit Your List

Revisit the SWOT diagram at a later time and edit it, culling out anything you don’t really need. You can also polish up some of the key insights gleaned in the brainstorming session. This is especially important if you plan to use your SWOT analysis as a more formal document that might be disseminated broadly.

6. Create a More Formal Version (Optional)

The final step, if you choose to do it, is to take your SWOT takeaways and put them together in a polished document that you can share.

A SWOT Analysis Example

It can be easier to understand how to approach a SWOT analysis if you’ve seen a SWOT analysis example. For the sake of this example, we will imagine a hypothetical company and what its SWOT analysis might look like.

The Business

An Instagram-friendly fitness business offering virtual workouts.

• The business is not limited to a specific geographic area.
• The company offers great benefits so employees tend to stay.
• Workouts look really good, so they market well on social media (particularly Instagram).
• The app experience can be glitchy.
• High customer churn rate.
• Competitors let you filter classes by the instructor. Ours doesn’t offer that.
• There is growing interest in our type of workout.
• As a result of the pandemic, consumers are more interested in at-home workouts.
• We could start offering retail products and branded workout equipment like our competitors do.
• Our app is vulnerable to hacking.
• If Instagram changes its algorithm, we may become wholly dependent on paid ads instead of organic posts.

A SWOT Analysis Template

Use this template to create your own SWOT analysis.

Strengths Section: What Your Company Does Well

Weaknesses section: what your company could improve, opportunities section: external factors you could use to your advantage, threats section: external factors that could harm your business, owning the hard truths of a swot analysis.

A SWOT analysis can bring up a lot of hard truths. It’s difficult to confront your company’s weaknesses and sometimes looking at threats can make them feel like the existential kind. Overcome these obstacles and give yourself the fortitude to confront business challenges head on with the Mental Toughness mini-course. The best part? It’s free.

About Mary Kate Miller

Mary Kate Miller writes about small business, real estate, and finance. In addition to writing for Foundr, her work has been published by The Washington Post, Teen Vogue, Bustle, and more. She lives in Chicago.

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How to Use SWOT in Business Plans

Using SWOT analysis in business planning may seem simple, but its benefits are surprisingly apparent.

Building a successful business requires extensive forethought and planning. The latter, business planning, assists you in picking goals, defining strategies, and actualizing your vision. It may sound complicated to do so, but with the help of some key business analyses , especially the SWOT analysis, you can make the process much easier for yourself.

SWOT: What and Why?

If you’re a regular PESTLEAnalysis.com reader, you should know by now that SWOT analysis identifies the S trengths, W eaknesses, O pportunities, and T hreats of a business or individual venture. A well-executed SWOT analysis reveals lots of information about the circumstances you (do or will) find yourself in, and how to make the most out of them, both of which are essential in business planning.

If you are still not sold on the importance of a SWOT analysis in business, it is critical that you review this article (“ How Your Business Could Fall Without Proper SWOT Analysis ”) before continuing on.

SWOT Analysis in Business Planning / Plans

Business plans often try to answer questions like “How will we grow?”, “What will we change?”, or “What might prevent us?” The two external factors in a SWOT matrix (Opportunities and Threats) begin the process of answering these questions, thanks to their inherent relation to the future. The other two factors (Strengths and Weaknesses) -- both of which are internal -- also contribute to an answer, but in a less explicit way. These two factors help you pick out, amongst other things, what to make the most of and what might need working on to reach your goals.

Business Planning, Analysis, and SWOT

You can’t plan for where you want your business to be in some amount of time if you don’t know where it is now. Thankfully, business analyses are designed to help you work that out. Before actually getting started with your business plan, be sure to conduct a concise business analysis (which might also use a SWOT analysis as discussed in a previous article ) to gain some more insight into this matter.

Actually Planning with SWOT

When formulating a business plan, go through each of the variables included in a SWOT analysis, and ask how they relate to your plan. Here are a few examples for each factor:

• Does our vision correspond with what we do well?
• Are we good at what we will need to be good at?
• How will our plan make the most of what we are good at?
• Will our business plan be hindered by certain weaknesses?
• Is it worth fixing them, or adjusting our plan to avoid them?
• What opportunities can we plan for?
• How will we make the most of unexpected, unplanned-for opportunities?
• What could prevent us from following our plan?
• How will we deal with any unexpected issues?

SWOT Models for Business Planning

Everything is better explained with lots of examples or outlines, and so we have an entire article dedicated to SWOT analysis templates for more effective, efficient business planning. Be sure to check it out for another approach to using SWOT in business.

That’s all there is to using SWOT analysis in business planning! It may seem simple, but its benefits are surprisingly apparent. Have you used a SWOT analysis for business planning or a previous venture? We’d love to hear about it down below, along with your questions and comments.

Image © Thodonal | Dreamstime.com - Business plan

Mars Acquires Kellanova: Our Updated Kellogg's SWOT Analysis

What are the Four Parts of A SWOT Analysis?

Searchgpt in openai swot analysis.

What Is a SWOT Analysis?

SWOT analysis stands for strengths, weaknesses, opportunities and threats. This exercise helps teams develop strategic plans for innovation and investment.

A SWOT (strengths, weaknesses, opportunities, threats) analysis is a visual framework used for strategic planning across all types of businesses and organizations. SWOT analyses are made up of four components that will help you determine the output of your team’s analysis.

What Does SWOT Analysis Stand For?

Opportunities, how do i do a swot analysis.

A SWOT analysis is a qualitative assessment of a company’s SWOT components. Individuals responsible for the assessment fill out a visual template similar to the figure above, which is usually laid out in a two-by-two matrix. This template helps visualize all the SWOT elements together in their entirety.

To understand in more detail the elements of this template, let’s dive into each component individually.

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What Are the 4 Components of a SWOT Analysis?

Your strengths are organizational features that provide a competitive and strategic advantage relative to the market and competition.

Weaknesses  

Your weaknesses include organizational features that are lacking relative to market competition, or that hinder the organization’s overall effectiveness to compete, grow, and strive for optimal business performance.

These are favorable market conditions or external developments that represent an opportunity for unlocking or improving the organization’s competitive positioning and business performance. Opportunities can be related to present market conditions, but can also be forward-looking.

These are unfavorable market conditions or external developments that pose a risk to the organization’s performance or the entire viability of the current market. Threats can be related to present market conditions, but can also be forward-looking. (e.g. near-term competitive threats or geopolitical risks would be good examples to feature in this bucket)

• Strengths and weaknesses are factors that are owned (and thus controlled) by the organization. As a result, the organization and its team can directly influence strengths and weaknesses.  
• Opportunities and threats are factors that cannot be controlled by the organization. For example, a near-term innovation trend or advantageous legal ruling that may come into play are considered opportunities, whereas near-term competitive innovation or geopolitical risks fall within the threats bucket. In either instance, your organization may prepare for these events, but it cannot control them. 

During the process of filling in this template, you’ll consider all four elements individually. Once you complete the template, through brainstorming sessions and workshops, you can start putting together an actionable plan to capitalize on your strengths and opportunities while countering your weaknesses and threats. 

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SWOT Analysis Example 

Let’s take, for example, a smartphone-producing company in the technology industry. Your example SWOT table may include the following.

Strengths :

• Strong brand positioning
• Loyal customer base
• High barriers to entry for the competition due to recent patent filings

Weaknesses:

• Recently departed CEO who led the company for the previous 15 years
• Production bottlenecks in key geographical regions
• Leaked PR documents

Opportunities:

• Customer trends indicating a shift towards higher-end smartphones in emerging markets
• Weakened competition due to a key competitor recently filing for bankruptcy
• Increased regulatory scrutiny
• Global chip shortage

As a result and potential plan of action, the company in question may decide to focus on mitigating the risks caused by its weaknesses (for example by increasing production in key regions close to the ones suffering bottlenecks in addition to selecting an experienced interim CEO as soon as possible) while seizing market opportunities that may not come about again (i.e. gaining market share in the short term by exploiting the competitor’s bankruptcy).

Overall, resource allocation should flow to:

• Seizing market opportunities
• Developing mitigation plans for market threats and investing in limiting potential damage or performance slowdowns caused by internal weaknesses

Why Use a SWOT Analysis?

The results of a SWOT analysis inform your company’s strategic plan and help you make decisions about how to allocate future resources.  As a result of a SWOT analysis your team might decide on the following:

• investment/divestments related to a given product line
• international market entry or market expansions
• changes to the company’s position relative to its competition (based on factors such as price, target customers and barriers to entry among others)
• adjustments to external macroeconomic trends (raise in interest rates) or market-related dynamics (global supply chain constraints)

SWOT Analysis Advantages and Disadvantages

The SWOT analysis as a framework for strategic planning has received its fair share of critique and scrutiny. Let’s review some of the pros and cons.

SWOT Analysis Advantages

• 10,000-Foot View : A SWOT allows you to consider multiple factors that you might not normally associate together all at once (departing CEO and macro-trends, for example). This process can invite management to identify creative solutions to company issues that may have previously been hard to identify; having this combination of different sources of data, from internal balance-sheet metrics to market data points to press releases may enable your organization to find more comprehensive and representative patterns.
• Cross-Team Collaboration : SWOT analyses create space for the representation of multiple viewpoints within the organization. The exercise invites people from different departments of the organization to contribute and collaborate across departments, thereby enriching the overall quality of the SWOT analysis and enabling better communication across company silos.
• Simplicity: A SWOT is a simple framework that allows you to consider and break down complex problems that are usually considered and tackled separately but without a link to the bigger picture offered by a SWOT exercise.
• Simultaneous Consideration of Internal and External Factors : A SWOT allows us to relate internal factors with external factors, which is important since these two sides are usually considered separately from one another and only more broadly considered at the executive level. For this reason, conducting a SWOT exercise at the department level allows internal teams to understand how external forces influence and relate to their day-to-day operations.

More on Group and Organizational Analyses 7 Ways to Use Mind Mapping in Your Work

SWOT Analysis Disadvantages

• Groupthink and Bias: The generation of a SWOT chart is heavily influenced by the individuals tasked with the exercise. If the group isn’t diverse or made up of representatives from around the organization, the analysis will result in biased outcomes and lopsided strategies.
• Short Shelf Life : A SWOT analysis is a spot exercise, which means we typically perform them as a one-off planning effort. In fast-changing markets, its results (and, thus, its overall relevance) can go out of date quickly.
• Research shows a weak link between the SWOT exercise and actual strategic decision-making and organization follow-through. As a result, we’ve seen alternative frameworks emerge, most notably Porter's five forces analysis .

Recent Operations Articles

How to Perform a SWOT Analysis for a Business

By Kate Eby | April 26, 2023

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A SWOT analysis helps you identify areas of strengths and weaknesses in your business and take advantage of opportunities and mitigate threats. Leaders perform a SWOT analysis before starting a project or implementing a strategy.

With help from our experts, we’ll teach you about a SWOT analysis , provide examples from three different industries , and highlight common mistakes to avoid. We also include a downloadable SWOT analysis starter kit to help you get started.

How to Do a SWOT Analysis

To perform a SWOT (strength, weakness, opportunities, and threats) analysis, assemble a matrix and take an objective look at your business. Write down your observations, summarize your findings, and plan your next steps together with your team.

“A SWOT analysis is designed to shed light on four separate aspects of your business and help in strategy formation and project planning. In order to perform this analysis comprehensively, each factor must be examined in equal measure,” explains Max Wesman , the Founder of GoodHire. 

We’ve outlined the steps necessary for completing a SWOT analysis:

• Assemble Your Team Include a diverse group in your analysis to get the best results. Ask for input from people on different teams and at varying employee tiers and demographics to get an objective look at your business. “Plan a half-day strategy session with your team and have each member come ready to present their own SWOT analysis of a particular product or opportunity. You’ll be surprised by the range of new ideas it generates. And you can use the exercise to formulate an aggregate SWOT that you all buyinto together,” suggests Jack Colletti , the Founder of Colletti Labs.
• Set Up Your Matrix Use a template, whiteboard, shared online workspace, or paper and pen to create a matrix. For free template ideas and downloads, check out our collections of SWOT templates available in PowerPoint , Microsoft Word , Google Docs , and Google Slides formats.

• Strengths: To identify your strengths, ask yourself what you’re doing well and what your customers and employees like about your business. 
• Weaknesses: To identify weaknesses, look at places where you have fallen short of projections. Read reviews of your business and pay attention to critical customer feedback. 
• Opportunities: To identify opportunities, start with your long- and short-term goals. Ask yourself if there are new products or services you can add to your lineup to set you apart, any gaps in the market you can fill, or any areas that could benefit from a different allocation of resources.
• Threats: To identify threats to your business, keep an eye on your competition, upcoming legislative changes, and financial records and projections. Pay attention to the potential for negative media and social media coverage due to your business practices, as well.  
• Organize and Summarize As a group, rank items by how actionable they are or by their impact. “Be sure that you don’t make your list too long to manage,” suggests Rossi. Choose the top five or six responses for each quadrant to help focus the discussion and analysis.
• Plan Your Next Steps Create action items and a plan for moving forward. Depending on the results of your analysis, this will likely mean some combination of bolstering your strengths, shoring up your weaknesses, taking advantage of opportunities, and mitigating threats.
• Store the Analysis for Easy Reference It is a good idea to perform a SWOT analysis regularly — depending on your business size, you might repeat the practice annually or quarterly. Before performing a new SWOT analysis, review the previous one and see where you’ve made improvements. “Routinely revisiting your SWOT analysis ensures that your evaluation is accurate and up-to-date with the current state of the market,” says Wesman.

SWOT Analysis Starter Kit

Download the SWOT Analysis Starter Kit

We’ve created this starter kit to give you the necessary tools to think through and conduct a SWOT analysis for your business. You’ll find SWOT templates in multiple formats, a checklist of actions to take and questions to ask, and a presentation template. All of these templates are fully customizable and can be adapted for personal decision-making. Download each template individually or as a complete kit.

Included in this download, you’ll find:

• A blank animated SWOT analysis template for PowerPoint to help create an engaging SWOT presentation.
• A blank horizontal, landscape-oriented SWOT analysis template for Microsoft Word to create an eye-catching display or a handout with plenty of room for text.
• A blank simple, portrait-oriented SWOT matrix template for Microsoft Word and Google Docs for easy brainstorming and sharing.
• A blank custom photo SWOT matrix template for PowerPoint and Google Slides to create a dynamic, personalized presentation of your analysis.
• A SWOT analysis checklist for Microsoft Word so that each step of your analysis goes off without a hitch.
• A common SWOT analysis examples checklist for Microsoft Word to reference and copy from when completing your SWOT template.
• A group SWOT analysis presentation for PowerPoint to help facilitate a group SWOT analysis meeting.

SWOT Analysis Examples

A SWOT analysis can help a wide variety of businesses identify their strengths, weaknesses, opportunities, and threats. We’ve collected some SWOT analysis examples that demonstrate how they’re used in construction, technology, and retail industries.

Construction Company SWOT Analysis Example for Google Docs

Download the Simple Colorful Construction Company SWOT Template for Google Docs Download the Simple Colorful Construction Company SWOT Template for Google Docs with Sample Data

This simple but colorful SWOT template includes example data for a construction company concerned about its growth. In the sample, the company has identified the experience of their staff as a strength, as well as their growth as a business over the last 15 years. They know they need to be more open to adopting new technology, and they acknowledge they have no marketing budget and only attract new clients by word-of-mouth. They use this info to focus their opportunities on leveraging their existing staff to train new teams, and creating a specific budget for marketing. Finally, they have identified the rising costs of labor and the chance of public backlash to a project they are working on as threats to their business.

Technology Company SWOT Analysis Example for PowerPoint

Download the Blank Animated Technology SWOT Analysis for PowerPoint Download the Animated Technology SWOT Analysis Template for PowerPoint with Sample Data

This animated SWOT analysis template is excellent for showing off your SWOT findings in a meeting or presentation setting. It includes animations to reveal each quadrant of your matrix as you speak. This template includes sample data for a large technology company that has recognized its worldwide presence and growing customer base as strengths, and the requirements of localization and employee retention as weaknesses. The organization is looking ahead to the opportunities presented by decreased labor costs in emerging markets, but also paying attention to the threat of cybersecurity and potential backlash in their home country due to their outsourcing of labor and manufacturing.

Retail Company SWOT Analysis Example for Microsoft Word

Download the Blank Horizontal Retail SWOT Template for Microsoft Word Download the Horizontal Retail SWOT Template for Microsoft Word with Sample Data

This horizontal-oriented SWOT template includes example data for a retail store. In the sample version of the template, the store has outlined its strengths but also noted concerns about the rising costs of rent and the abundance of big-box stores and included those in the threats section. They have identified opportunities as participation in local events and the possibility of a second storefront. The store also recognized that it could improve its social media efforts and the difficulty in competing with larger, online retailers.

What Is a SWOT Analysis?

A SWOT analysis is a strategic assessment tool that weighs strengths, weaknesses, opportunities, and threats to aid in decision-making. A SWOT analysis can help guide you to better-informed conclusions that are more likely to produce long-term benefits.

Invented by Albert Humphrey at the Stanford Research Institute in the 1960s, the SWOT analysis framework has been adopted by businesses and individual decision-makers worldwide. Humphrey’s framework prioritizes the analysis of internal strengths and weaknesses; the related TOWS analysis model flips this on its head and focuses on external opportunities and threats. Another external analysis model, the PEST (political, economic, social, and technological) framework, focuses entirely on external factors, namely political, economical, sociocultural, and technological.

“The SWOT analysis is an excellent framework not only for diagnosing issues in your business, but also for identifying strategic opportunities within it. For example, a SWOT analysis can be applied to the launch of a new product, a business partnership under consideration, or a key hire or promotion. While the SWOT is not meant to be an all-inclusive, fully exhaustive analysis, it does provide a solid basis for discussion, much like a resume or CV contributes to the hiring process,” explains Colleti of Colletti Labs.

Strength in a SWOT Analysis

The strengths section of a SWOT analysis highlights what you do well. These can include your sales and market presence, hiring and retention practices, and products and services, among others. It can also list what you are good at personally.

Some additional examples of strengths you might list in a SWOT analysis include:

• Customer Satisfaction: Satisfied customers are returning customers. Returning customers keep your business solvent. Having a large number of regular customers is a great strength.
• Effective Branding: The right branding makes a business memorable. A well-designed logo or a fun, topical ad campaign can bring in sales and create positive associations with your brand.
• Employee Satisfaction and Retention: Hiring quality talent and retaining them for the long term is a wonderful strength. Loyal employees are more likely to enjoy their work and work harder because of it.
• Expertise: Business leaders often have expertise in their field that translates to a better product or service. Possessing more expertise than your competitors is a noteworthy strength.
• Filling a Niche: Identifying and filling a niche in the market is an excellent strength. Many businesses thrive because they are able to tap into the needs of their market and provide it for their customers.
• Leadership: Great leadership is a great strength. Leaders who inspire and support their teammates foster a happier and more cohesive workplace.
• Longevity: The longer your business has been around, the longer you have had to cultivate a positive reputation in your community. Businesses often celebrate their anniversaries and promote the time they have spent operating in the community. Longevity helps assure customers that you have expertise in your niche.
• Meeting and Exceeding Goals: Setting and achieving realistic goals is a sign of a well-run business.
• Product and Service Offerings: Unique or popular product and service offerings help a business carve out a niche and find their customer base, making them an obvious strength.
• Sales: Consistently high sales are desirable for any business and, therefore, a major strength. Robust sales can also lead to many other strengths, as well.

Identifying strengths impartially can be challenging. Use this list of questions to help pinpoint your strengths:

• How has your company grown? 
• What do your customers like about you in reviews? 
• What do your employees like about working for you?
• What does your company do that is unique? 
• What offerings or company philosophies set you apart? 
• What looks different about your business from one, five, and ten years ago?

Weakness in a SWOT Analysis

Weaknesses in a SWOT analysis are business aspects that are underperforming. These could be low sales, unpopular services, limitations, negative reviews, or others. Consider your weaknesses carefully, as you can often turn them into opportunities.

Here’s a list of common weaknesses businesses might find in a SWOT analysis:

• Employee Satisfaction: Employees who are unhappy with their jobs are less engaged and less productive. Consider your employees’ satisfaction, as retention can easily become a weakness of the business.
• Inefficient Budget and Resource Allocation: Many businesses have enough but do not allocate them efficiently. This weakness can be easily addressed by implementing better project prioritization practices.
• Negative Customer Reviews: Look at what your customers are saying in their reviews. Note the comments that show up frequently, and remember that customers will only typically leave very positive or very negative reviews. Use negative reviews as a tool to identify the areas where your business can improve.
• Not Reading Trends: Your products and services can quickly become obsolete if you are not in the habit of reading and forecasting trends. 
• Poor Branding: Consider branding carefully. It should be consistent, representative of your company, and recognizable across all mediums.
• Poor Leadership: Solid leadership is critical to the success of a business. As such, leadership that doesn’t perform well should be addressed immediately.
• Product or Service Offerings: Product or service offerings can be a weakness if they are not unique to your business or better than similar offerings from your competitors.
• Resource Limitations: Resources might include money, people, or materials. If you do not have the resources needed to meet demand, shore up this weakness.
• Rigidity: Being unable or unwilling to change with the times is a weakness found in many organizations. Change can be scary, but it is often required to move forward and stay relevant.
• Unrealistic Sales Projections: When sales are lower than projected, it can throw off budgets and plans for the business’s future, leading to missed opportunities and overinvestment in failing product lines.

Business owners often struggle to identify their weaknesses impartially. To help identify weaknesses, ask yourself the following questions, and be honest with your answers:

• What do your customers think you can improve on? 
• What part of your business do customers commonly identify as troublesome?
• What are your biggest challenges? 
• Where have you fallen short in your goals over time? Were those goals realistic?
• What are your competitors doing better than you? 
• What are your competitors doing that you wish you were doing better?
• When was the last time you performed a competitive analysis ? 
• What do your employees think of their leaders and your business?

Opportunities in a SWOT Analysis

In a SWOT analysis, opportunities refer to situations that offer a chance to improve or expand. These can be factors such as a gap in the market, new products or services, or positive media coverage.

Some examples of opportunities to note in your SWOT analysis are:

• New Products and Services: When you add new products or services to your offerings, you have an opportunity to expand your product line and grow your business.
• Social Media Engagement: Social media provides an organic way to interact with existing and potential customers in a casual setting.
• Viral Advertising: Many businesses find success after creating popular media on the internet. Viral advertising has the potential to expose your company to potential customers who might otherwise not find you.
• Competition Gaps: Pay attention to your competition. When they switch gears or leave the market, you might be able to fill the gap they leave behind.
• Surplus Budget Reallocation: Sometimes a business finds it has a budget surplus. Extra money is an opportunity to shore up weak spots or take advantage of new opportunities.
• Partnerships: Partnering with other businesses or causes can bring you the exposure you could not have found alone. Fundraising and profit sharing offer beneficial ways to build some community support and help a good cause.
• Social and Cultural Opportunities: In addition to partnering with other businesses, research events and causes within your community that could help grow your business. Participating in social and cultural events can help boost your community standing.
• Hiring Consultants: You cannot be an expert in everything, so consider hiring an experienced authority to handle the tricky stuff or to teach you how to handle it.
• Training and Education: Continuing training and education of your staff (and yourself) can lead to countless future opportunities.
• Expansion: One of the most common, and most desirable, opportunities for a business is the chance to open new locations or expand into new markets.

To identify opportunities present in your business, ask the following questions: 

• Which social media platforms have shown the most growth in followers and engagement?
• Are there areas of local or cultural impact we can highlight in our messaging?
• Is there any kind of gap in the market we can capitalize on?
• Is there a budget surplus in a department that can be allocated elsewhere?
• Are there other companies or organizations we can partner with for shared impact?
• What are our long- and short-term goals for the business? 
• How can we best achieve our goals with our current resources?

Threat in a SWOT Analysis

Threats in a SWOT analysis refer to events or circumstances that pose a risk to your business’s growth or commercial success. These can include competitors, new regulations, negative media or social media coverage, and customer and employee satisfaction.

Opportunities and threats are sometimes considered two sides of the same coin, as many opportunities invite risk if you do not meet them with a solid plan. Opportunities are chances to capitalize on a possibility, but they can often be safely ignored. On the other hand, if you ignore threats for long enough, they often lead to disastrous consequences. Threats vary by industry and location. 

We’ve collected some examples of common threats that could appear in a SWOT analysis:

• Competition: Your competition is always a threat. Other businesses occupying the same market space can dilute sales or push you out altogether. Monitor your competition’s offerings so that you can adjust as needed and stay relevant.
• Customer Satisfaction: Many factors can affect customer satisfaction, but as your clients become less satisfied, they are less likely to patronize your business. Keep an eye on reviews, social media, and customer surveys for insights into your customers’ experiences.
• Employee Satisfaction: Without experienced and motivated staff, it is impossible to operate efficiently. Keep employees satisfied by providing competitive wages, opportunities for growth, and positive reinforcement of their achievements.
• Environmental: Prepare a plan for major weather or environmental events, even if you don’t operate your business where they are common. If possible, carry insurance for fires, floods, and earthquakes so that your work is interrupted as little as possible if one occurs.
• Equipment and Building Maintenance: Delaying expensive repairs and maintenance on your buildings or equipment that are not immediately critical can be tempting. However, putting them off too long can lead to even more expensive repairs and possible closures at a later date when things break down or fail.
• Media Coverage: The adage “no such thing as bad press” is not always true. Negative media coverage can cost you customers and sales. Positive media coverage can run the risk of bringing on more customers than you have the capacity to handle, which can lead to frustration and a loss of customers in kind.
• Regulations: New regulations that interfere with or inhibit your business get passed all the time. Keep abreast of any pending changes, and be sure that you have contingency plans in place.
• Setting Financial Goals: Your business forecasts should be realistic and based on similar market numbers or real numbers you have achieved in the past. You cannot set achievable plans for your business's future if you are not making accurate projections in the present.
• Social Media Coverage: Like regular media coverage, social media can make or break your business. Many companies find success and followings on social media organically. However, some fail to appeal to the average user and can even find themselves publicly ridiculed in this forum instead.
• Supply Chain Delays: Supply chain delays can affect lead times, manufacturing schedules, and the availability of materials. They can be difficult to predict, so consider building in extra time or creating contingency plans.

Identifying threats can feel overwhelming and pessimistic, but they are vital for business planning. Ask yourself the following questions to shine light on potential threats in your SWOT analysis:

• Are there any new major competitors in the market? 
• What are people saying about us in reviews and on social media?
• Where are we underperforming? 
• Where are we missing our goals?
• Will any incoming new legislation directly or indirectly affect our business? What kind of potential legislative changes should we keep an eye on?
• Are we keeping up to date on building and equipment maintenance?
• Are our employees satisfied with their jobs?
• Are we maintaining accurate financial records and creating accurate projections?

Internal and External Factors in a SWOT Analysis

In a SWOT analysis, strengths and weaknesses are considered internal factors, and opportunities and threats are considered external factors. Internal factors are usually a result of decisions the company has made. External factors often come from a wider environment.

Internal factors tend to be easier to address since they come from decisions made within the company. External factors depend greatly on factors outside of a business and can be harder to identify and track. As a result, most organizations find it easier to bolster strengths and shore up weaknesses than to take advantage of opportunities and avoid threats.

Tips for Writing a SWOT Analysis

To write a SWOT analysis for your business, take an objective look at your strengths, weaknesses, opportunities, and threats. Keep it organized and concise, and create a specific and actionable list. 

We’ve outlined these and other tips:

• Be Concise: Stick to the most profound or critical five or six elements in each quadrant to keep the analysis relevant and actionable.
• Be Honest and Impartial: It’s vital to be honest and impartial about the state of your business. This truth can sometimes be difficult for managers and owners who are too close to it, so consider involving additional stakeholders or employing outside help.
• Be Specific: Use real numbers when talking about sales, goals, and times. Point to specific initiatives that were successful (or not) instead of referring to them broadly. “My early SWOT analyses were too general, and I didn’t have the rigor that’s required to provide a detailed and balanced view of a business or opportunity. If I could go back in time, I would consider more elements of the business, including people, product, marketing, sales, customer service, data management, quality, partners, etc. I would also provide metrics and KPIs for each area discussed to provide a proper data-driven basis for discussion or debate,” Colletti contemplates.
• Do It Regularly: Create a quarterly or annual schedule to perform SWOT analyses regularly. “I wish I had known that a SWOT analysis should be performed at regular intervals,” says Wesman. “Changes in technology, consumer sentiment, and macroeconomic factors can drastically alter a business's prior prospects, which can blindside decision-makers during their most critical moments.”
• Follow Up: Once you analyze your results, make an action plan to take advantage of your strengths and opportunities, as well as to address any shortcomings you have found. Use it to help plan your business strategy going forward. “A SWOT analysis is a great way to keep your finger on the pulse of your business’s overall performance,” says Rossi.
• Use Real Data: Use real data from reviews, surveys, and sales to create the analysis. Your SWOT analysis will be more actionable if you include the real numbers associated with each factor.

Mistakes to Avoid when Doing a SWOT Analysis

When performing a SWOT analysis, avoid being vague or too verbose. Be sure to follow up on the findings and create an action plan. 

We’ve outlined these and other potential mistakes to avoid in your SWOT analysis: 

• Being Too Wordy: Your lists should be easy to read and understand without a lot of extra information. Use real numbers and statistics when applicable, and stick to the top five or six items with the most impact in each quadrant.
• Being Too Vague: At the same time, your lists should include all the necessary details to give the reader the full picture.
• Not Being Honest and Objective: It is easy to inflate your strengths and downplay your weaknesses, but that will only hurt your business in the long term. “One common mistake is to downplay the risks and threats in the analysis. As entrepreneurs, we sometimes tend to be overly optimistic or overconfident. We may want to embellish the strengths and opportunities, such as stating ‘our killer technology’ or ‘our amazing sales team.’ Another mistake is to make claims or statements with no real data or analytical support. A proper SWOT requires you to be pragmatic about your strengths, and think really hard about what risks and threats face your business,” explains Colletti.
• Not Creating an Action Plan: One of the biggest mistakes you can make with a SWOT analysis is not using its results to inform your next steps. A SWOT analysis is only useful if you learn from it and let it help you inform your strategy.
• Not Involving a Group: A SWOT analysis performed by a single person will only have a single point of view. For best results, take a more inclusive look at your business from people at all levels.

Benefits of a SWOT Analysis

A SWOT analysis can provide insight into your business’s overall performance, highlight places to improve, and even act as a team-building exercise. 

We’ve outlined these and more benefits of performing a SWOT analysis:

• Develop Action Plans: A SWOT analysis is a great tool for developing an action plan. Use the results to focus on the areas that need work or extra resources and to keep developing the areas that are doing well.
• Do Some Introspection: A SWOT analysis provides a forum to do some real introspection on your business and its practices. “Since many entrepreneurs and business owners can be overly optimistic, a SWOT analysis can help force pragmatism. Leaders need to consider the business from all angles with a heightened sense of rigor,” warns Colletti.
• Get an Objective Overview of the Business: A SWOT analysis can give you an overview of your company’s current performance and its future potential. “You can use these insights to weigh the pros and cons of difficult business decisions. This will help you navigate challenging market environments to your advantage,” says Wesman.
• Help Draft Other Business Documents: A SWOT analysis can serve as the first draft for other business documents, such as project overviews, media releases, and investment reports. “SWOT is a widely known framework, thus providing a common language for communicating the viability of a business or opportunity to leadership, investors, business partners, or board members,” explains Colletti.
• Team Building: When you include a diverse group of employees in business strategy discussions, you increase their buy-in and engagement. They feel more connected to the problem and see themselves as part of the solution. “SWOT is an excellent tool for a strategy session or team-building event , allowing leaders to solicit input and feedback on various aspects of the business,”  Colletti explains.

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How to Conduct a SWOT Analysis for Your Business Plan

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In order to plan to seize business opportunities and sidestep potential threats, you start by conducting a SWOT (strengths, weaknesses, opportunities, threats) analysis. A SWOT analysis helps you analyze your company's capabilities against the realities of your business environment so you can direct your business toward areas where your capabilities are strong and your opportunities are great.

To conduct a SWOT analysis, follow these steps:

List your company's strengths and weaknesses and its opportunities and threats.

Divide your strengths into two groups:

Those that can help you take advantage of opportunities facing your business

Those that can help you head off potential threats

Divide your weaknesses into two groups:

Those that require improvement before you can take advantage of opportunities

Those that you need to completely and quickly overhaul and convert into strengths in order to avert potential threats to your business

Use your lists as you make decisions that contribute to your business plan.

Develop strategies and actions for capitalizing on opportunities and create plans for addressing threats and weaknesses that could threaten the future of your business.

This shows how the owners of the Soup's On catering business completed the grid for their company.

Based on the outcome of the caterers' SWOT analysis, they made some significant business decisions: They hired a marketing consultant with experience developing restaurant chains; they conducted research to get a sense of the resources required to achieve competitive Internet presence; they strengthened their management structure to prepare for growth; and they recruited two investors to improve their company's financial condition.

As a result, Soup's On is ready to grow into a small chain. The owners expect increased competition for catering and takeout services, but they project that growing demand will support a number of catering companies. What's more, they're confident that by focusing on quality, consistency, and sophisticated menus, they can compete successfully. By investing time upfront to understand their strengths and weaknesses, the caterers increased their chances of success.

Include findings from your SWOT analysis in your business plan, addressing how you intend to

Seize business opportunities by capitalizing on business strengths

Overcome weaknesses to take advantage of business opportunities

Monitor potentially threatening outside forces while maintaining or developing internal capabilities so that you're prepared to respond from a position of strength if a threat arises

Eliminate weaknesses to protect your business from threats

Revisit your SWOT analysis on a regular basis — at least annually and more frequently if your business is facing major changes in marketplace or competitive conditions, experiencing growth problems, or failing to meet goals and objectives — to see how the balance of strengths, weaknesses, opportunities, and threats may have shifted.

Your business environment is constantly in flux, so you want to be sure that your business plan reflects the world around you as it is, not the way it was.

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Blog Business What Is a SWOT Analysis and Its Importance to Businesses

What Is a SWOT Analysis and Its Importance to Businesses

Written by: Cristian Oana Jan 21, 2022

You’ve heard that conducting a SWOT analysis creates the foundation for your business and marketing strategy—but what exactly is a SWOT analysis and how do you do it?

Learn what SWOT analysis is, how to conduct one and how you can integrate visuals into your SWOT analysis to persuade your audience or gain buy-in from investors—all can be done by using Venngage’s SWOT Analysis Maker .

Click to jump ahead:

What does swot stand for, what is a swot analysis, why is a swot analysis important, how do you conduct a swot analysis.

SWOT stands for Strengths, Weaknesses, Opportunities and Threats — the four key aspects of your business that you must assess to pave the way for a more productive brainstorming and strategic planning session.

Generally speaking, the SWOT analysis focuses on helping you identify and analyze the internal and external factors of a company or an organization.

When you conduct a SWOT analysis, you look at the internal factors (strengths and weaknesses) and external factors (opportunities and threats), and from there you can identify your business’s competitive advantages over your competitors and start developing your business strategy.

As such, SWOT analyses are especially useful tools for marketing departments and sales organizations . They can also be powerful tools in highly changeable industries like healthcare .

A SWOT analysis is often in the form of a quadrant or matrix, like this SWOT matrix:

Let’s take a look at what constitutes each internal and external factor of the SWOT framework.

Identify your business’s strengths

Strengths are the internal factors and resources that support a successful outcome for an organization. These are the things that you are particularly excellent at or the things that set your business apart from its competitors.

A strength brings you competitive advantages over your competitors. If all your competitors offer high-quality products, then manufacturing high-quality products is not a strength in your market. Rather, it is deemed as a necessity.

Point out your weaknesses

Weaknesses are inherent in an organization, too. Focus on your people, resources, systems and procedures, and determine which of these need improvement or must be avoided. 

A business’s weakness can come in the form of its workforce like in this SWOT analysis example:

Regularly assess your employees’ work performance using this template to enhance company productivity.

Don’t be afraid to acknowledge your weaknesses. Instead, embrace and address them. Be realistic now instead of ignoring the unpleasant truths.

Spot opportunities

Opportunities are typically born out of external situations. They are windows of possibilities, of something promising to happen. But you must be able to spot and exploit them. Do just that and you bring up your organization’s chances of trouncing the competition and, hopefully, of leading the market.

These opportunities don’t have to be big right away. Remember, every positive opportunity counts, even the small ones. What’s important is that you can grab them and take advantage of them immediately.

Use this SWOT analysis template to assist your brainstorming session. Make sure you have taken advantage of all the presented opportunities for your business.

Anticipate the threats

Threats are the total opposite of opportunities. These are factors based on your company’s external environment that could negatively impact your business.

While opportunities could allow a company to thrive, threats could stunt your company’s growth and generally jeopardize your company’s success.

External threats may include changes in the market requirements, shortage of new employees, and supply chain problems. It is vital to take action against these before these could adversely affect your company. 

For more examples of SWOT analysis templates, read on or check our blog posts: 20+ SWOT Analysis Templates, Examples & Best Practices

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It’s a tool for strategic planning

As previously established, SWOT analyses are an effective tool for planning, brainstorming and even decision-making.

The tool works more effectively if you conduct it while bearing a specific question or objective in mind such as taking advantage of a new business opportunity, responding to new trends, implementing new technology, or dealing with a competitor’s change in operations.

The SWOT analysis example below points out the opportunities presented to a grocery delivery company. Based on this analysis, you’d recognize that the strategy in the short term should focus on attracting a larger audience by optimizing the mobile app and improving the website’s SEO.

SWOT analysis leads to a competitive advantage

Since SWOT analysis helps an organization determine the areas that perform well, the areas they pinpoint are considered to be the fundamental success factors that will give your business the competitive advantage that it deserves.

SWOT also requires you to analyze your competitors to understand where you stand on the market, thus being able to point out your competitive advantages over others.

If you’re interested in learning more about competitor analysis , check out this post: How to Create a Competitor Analysis Report (Templates Included)

This SWOT analysis template can be used to generate a diagram where you can examine the aspects of your organization that can be used more to your advantage.

It can also help you deal with your weaknesses

To help you put your organization in a better spot, conduct a SWOT analysis to identify your weaknesses so you can cut down or improve them even before they develop into a problem. As said before, be realistic in identifying your weaknesses to adequately deal with them.

SWOT analysis can ward off threats

The steps your competitors take may also be a threat to your business. Make sure you anticipate them and proactively ward off their marketing campaigns with this SWOT analysis template.

External factors such as a new government policy or your competitor’s new advertising campaign can be seen as threats to your business. Identify the threats looming around your business through a SWOT analysis. You may also find ways to ward them off depending on the strengths and weaknesses that you listed in your analysis.

Achieve your organization’s goals and objectives with the use of the information you have gathered from your SWOT analysis. Use the following steps to begin your journey.

Step 1. Establish your objective

From the beginning, you have to have a clear objective or a question in mind so you can get the most out of your SWOT analysis. For example, you may use the information you gathered to decide whether or not to push through with the launch of a new product or service to the market.

Here’s an example of a SWOT analysis conducted to examine the possibility of scaling for an apparel design business:

Step 2. Conduct research

Understand your business and the industry and market it belongs to before you begin the SWOT analysis. Brainstorm with your team, business partners, investors, and clients to get a diverse range of perspectives. Don’t forget to take your competitors into account so find time to research about them, too!

Step 3. Make a list of your business’s strengths and weaknesses.

Identify and list down your business’s strengths and weaknesses respectively. Your strengths may include those that relate to your workforce, financial resources, competitiveness, and your business location while your weaknesses may include your lack of innovative products and employee absenteeism.

Your goal should be to look back on your SWOT analysis and find that your weaknesses have already been resolved. Despite the emergence of new weaknesses over time, the fact that you have already addressed the old ones is a good indicator of your business’s growth.

Take note that your list does not need to be definitive during this part as you will still be organizing them at the fifth step.

Add what you have in your list to this SWOT analysis template:

Remember, you can always add icons or illustrations to the template to make it your own:

Or even apply your brand colors to it, using My Brand Kit :

Step 4. Make a list of your business’s potential opportunities and perceived threats.

Businesses must not fail to recognize the windows of opportunities presented to them, as well as looming threats lingering around it.

List down all possible external opportunities and threats for your business. Your opportunities may include innovative technologies, potential investors and partnerships, training programs, and a diversified marketplace while your threats may include unemployment growth, emergence of competitors, and the uncertainty of global markets.

Note that the same item could not be listed down as both an opportunity and a threat.

Add your opportunities and threats to your SWOT analysis design. If you don’t like the template above, here’s another one:

Step 5. Determine the hierarchy of priorities.

After completing the steps above, you will have four different lists—one each for strengths, weaknesses, opportunities, and threats. This is where you work out the hierarchy of importance among the issues, which are the most important ones and which can be dealt with at a later time.

Step 6. Come up with strategies addressing the problems found.

Review your prioritized list by asking how your strengths and weaknesses can take advantage of the opportunities listed and counteract the threats listed respectively. Also consider the things you would need to get control of your weaknesses to take advantage of the opportunities as well as the ways to minimize your weaknesses to push through your identified threats.

After answering those, you may begin developing your strategies to achieve your business goals and objectives.

Conducting a SWOT analysis doesn’t have to be daunting

Start brainstorming, researching and developing strategies for your business with the help of SWOT analyses. You can always customize our SWOT analysis template and add it to your report , presentation or infographic to share with colleagues or investors (and guess what, we have templates for those too!)

Start creating your own SWOT analysis for free using Venngage’s SWOT Analysis Maker —no design experience required.

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• What Does a SWOT Analysis Reveal?
• SWOT Analysis of a Telecommunication Company

SWOT refers to strengths, weaknesses, opportunities and threats. SWOT analysis is a process where the management team identifies the internal and external factors that will affect the company’s future performance. The company’s strengths and weaknesses are the internal factors. Opportunities and threats deal with factors external to the company – environmental factors.

SWOT analysis is done as part of the overall corporate planning process in which financial and operational goals are set for the upcoming year and strategies are created to accomplish these goals.

Using Resources Efficiently

Every company – even the largest ones that dominate their markets – has a finite supply of labor, production capacity and capital. Evaluating the company’s strengths helps it determine how to allocate these resources in a manner that will result in the highest possible potential for revenue growth and profitability.

The management team examines where the company can compete most effectively. The company often discovers it has competitive strengths that have not been fully utilized in the past.

Improving Business Operations

When the management team looks at the company’s weaknesses, it is not to assign blame for past shortfalls in performance. It is to identify the most critical areas that need to be improved in order for the business to more effectively compete. A realistic assessment of weaknesses also prevents strategic blunders like entering a market with products that are clearly inferior to what well-entrenched competitors are offering. Continuous improvement in all areas of a company’s operations is an important aspect of staying ahead of competitors. Current weaknesses can – and must – be turned into future strengths.

Discovering New Opportunities

Growth in business requires seeking out new opportunities, including new potential customer groups, broader product distribution, developing new categories of products and services and geographic expansion. In a SWOT analysis, the management team identifies emerging opportunities to take advantage of right now and tries to forecast longer term opportunities so advance planning can be made to be ready to enter the market when the time is right.

Dealing with Risks

A threat in SWOT analysis is another term for risk – an occurrence outside the company’s control that could have a negative impact on performance. Companies face many threats beyond those caused by direct competitors. Changes in the regulatory environment can have an adverse impact on performance. Consumer tastes can abruptly change such as when a recession causes consumers to cut back on purchasing luxury goods and services.

Risks are less threatening to an organization when it takes the time to develop contingency plans to quickly implement should the threats become a reality. SWOT analysis helps a company be better prepared for whatever it will encounter in the external environment.

Competitive Positioning and Strategy

Many companies do a form of SWOT analysis on their key competitors. Combined with the information from the company’s SWOT analysis of itself, the management team begins to get a picture of how the company should position itself against competitors. The company wants to attack competitors’ weaknesses with its own strengths. It is much like game planning in football – trying to locate where the opposing team is vulnerable.

Conversely, it does not want to meet a competitor’s strengths head on if the competitor has an overwhelming advantage. SWOT analysis shows a company that even its most powerful competitors have weaknesses that can be exploited.

• "Simplified Strategic Planning: The No-Nonsense Guide for Busy People Who Want Results Fast"; Robert W. Bradford and J. Peter Duncan; 2000
• MarketResearch.com: The Strategic Value of a Swot Analysis
• Management Study Guide: SWOT Analysis - Definition, Advantages and Limitations

Brian Hill is the author of four popular business and finance books: "The Making of a Bestseller," "Inside Secrets to Venture Capital," "Attracting Capital from Angels" and his latest book, published in 2013, "The Pocket Small Business Owner's Guide to Business Plans."

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Why to do a SWOT analysis for a business plan

Table of Content

Introduction

As you develop your business plan, there are a myriad of considerations that need to be taken into account. One of the most important factors is conducting a SWOT analysis. SWOT analysis is a strategic planning that helps businesses identify their strengths, weaknesses, opportunities, and threats. By conducting a SWOT analysis, businesses can develop strategies to address their weaknesses, capitalize on their strengths, and take advantage of new opportunities.

What is a SWOT analysis?

A SWOT analysis is a strategic planning  used to evaluate the Strengths, Weaknesses, Opportunities, and Threats of a business, project, or individual. The analysis involves identifying the internal and external factors that can affect the success or failure of a venture. Here’s a breakdown of what each element of the SWOT analysis represents:

• Strengths: These are the positive attributes or qualities of the subject being analyzed. They can include things like a strong brand reputation, skilled staff, unique products or services, or efficient processes.
• Weaknesses: These are the negative aspects of the subject being analyzed. They can include things like poor cash flow, low employee morale, outdated technology, or a lack of resources.
• Opportunities: These are external factors that can be leveraged to the advantage of the subject being analyzed. They can include things like emerging markets, new technologies, changing consumer trends, or favorable government policies.
• Threats: These are external factors that can negatively impact the subject being analyzed. They can include things like increasing competition, economic downturns, regulatory changes, or natural disasters.

Benefits of SWOT analysis?

In this guide, we will outline the key benefits of conducting a SWOT analysis and provide tips on how to conduct a SWOT analysis for your business plan.

• Identifying Strengths and Weaknesses: The first benefit of conducting a SWOT analysis is that it helps businesses identify their strengths and weaknesses. Strengths are internal factors that give a business an advantage over its competitors, while weaknesses are internal factors that put a business at a disadvantage. To identify your strengths and weaknesses, it is important to conduct an honest and thorough analysis of your business.

Assessing Opportunities and Threats: A SWOT analysis also helps businesses assess opportunities and threats. Opportunities are external factors that could benefit a business, while threats are external factors that could harm a business. To assess opportunities and threats, it is important to conduct a competitive analysis and a market analysis. This may include analyzing your competitors’ strengths and weaknesses, identifying new market trends, and assessing changes in the regulatory environment. By identifying opportunities and threats, you can develop strategies to take advantage of new opportunities and mitigate potential threats.

Developing Business Strategies: One of the most important benefits of conducting a SWOT analysis is that it helps businesses develop Strategic business planning. By identifying strengths, weaknesses, opportunities, and threats, businesses can develop strategies that capitalize on their strengths, address their weaknesses, take advantage of new opportunities, and mitigate potential threats.

Prioritizing Business Priorities: Another benefit of conducting a SWOT analysis is that it helps businesses prioritize their business priorities. By identifying the most important strengths, weaknesses, opportunities, and threats, businesses can focus their resources on the most important areas of their business. If your SWOT analysis identifies a major new market opportunity, you may prioritize your product development efforts to take advantage of this opportunity.

Facilitating Communication and Collaboration: Finally, conducting a SWOT analysis can facilitate communication and collaboration within your organization. By involving key stakeholders in the SWOT analysis process, you can ensure that everyone is on the same page and working towards the same goals. This may include involving your employees, customers, suppliers, and other stakeholders in the SWOT analysis process. By involving everyone in the process, you can ensure that everyone has a clear understanding of the business’s strengths, weaknesses, opportunities, and threats, and can work together to develop effective strategies to address them.

How to Conduct a SWOT Analysis?

Now that you understand the benefits of conducting a SWOT analysis, let’s take a look at how to conduct a SWOT analysis for your business plan.

Step 1: Identify Your Business’s Internal Factors:  The first step in conducting a SWOT analysis is to identify your business’s internal factors. These are the factors that are within your control and can have an impact on your business’s performance. This may include your products or services, your brand reputation, your financial position, your employees, and your marketing strategy. To identify your business’s internal factors, ask yourself the following questions:

What are our core strengths as a business?

What are our biggest weaknesses?

What are our key financial metrics?

How effective is our marketing strategy?

How satisfied are our customers?

Step 2: Identify Your Business’s External Factors:  The second step in conducting a SWOT for market analysis is to identify your business’s external factors. These are the factors that are outside of your control and can have an impact on your business’s performance. This may include your competitors, changes in the regulatory environment, changes in technology, and changes in market trends. To identify your business’s external factors, ask yourself the following questions:

Who are our main competitors?

What are our key market trends?

What are the regulatory challenges we face?

How is technology impacting our industry?

What are the biggest threats to our business?

Step 3: Analyze Your Business’s Strengths, Weaknesses, Opportunities, and Threats:  The third step in conducting a SWOT analysis is to analyze your business’s strengths, weaknesses, opportunities, and threats. This involves looking at your internal and external factors and identifying the most important factors that are impacting your business.

To analyze your business’s strengths, weaknesses, opportunities, and threats, use a SWOT matrix. This is a four-quadrant table that allows you to organize your findings and identify key areas for improvement.

In the SWOT matrix, list your strengths in the top-left quadrant, your weaknesses in the top-right quadrant, your opportunities in the bottom-left quadrant, and your threats in the bottom-right quadrant. Then, use this information to develop strategies to capitalize on your strengths, address your weaknesses, take advantage of new opportunities, and mitigate potential threats.

Step 4: Develop Strategies Based on Your SWOT Analysis:  The final step in conducting a SWOT for market analysis is to develop strategies based on your findings. This involves identifying the most important areas for improvement and developing strategies to address them.

To develop effective strategies, consider the following questions:

How can we build on our strengths to grow our business?

How can we address our weaknesses to improve our performance?

How can we take advantage of new opportunities to expand our business?

How can we mitigate potential threats to protect our business?

By answering these questions, you can develop effective strategies that address your business’s most pressing needs.

In conclusion, conducting a SWOT analysis is an essential step in developing a strategic business planning for market analysis. By identifying your business’s strengths, weaknesses, opportunities, and threats, you can develop strategies to build on your strengths, address your weaknesses, take advantage of new opportunities, and mitigate potential threats.

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BUSINESS BEST PRACTICES: SWOT Analysis: The Annual Check-Up for a Business

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A SWOT analysis is an important aspect of strategic business planning and should always be performed in conjunction with the initial creation of a company's business plan. On an ongoing basis, performing an annual SWOT review to update the business plan ensures that the business plan will remain a living, breathing document that the firm and the employees can follow. In today's retirement services industry, change is the only constant. The SWOT analysis is an effective tool for managing change, determining strategic direction, and setting realistic goals and objectives. Since a company can only handle a finite number of initiatives at any one time, it is extremely important to prioritize opportunities and threats in order to determine the most critical strategies for success. Ask for staff input on development of new goals to fulfill the strategies and ask how they can help get you there. The employees are the engine that drives the train of your business, and they are an essential part of implementing SWOT strategies.

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The Importance of a SWOT Analysis when Business Planning

People often ask me, what is the difference between a strategic plan and a business plan . Briefly, a strategic plan sets the strategic direction of a company, it will contain information about mission, vision and long-term direction. The business plan focuses primarily on forecasts and profitability as well as focusing on the market, customers and operations.

A strategic plan focuses more on the mid to long term while a business plan focuses on the short to mid-term.

One key tool that is used in both plans is a SWOT analysis. While the marketing team often use it, the financial team use it quite a bit too. We have found it an incredibly useful tool when working with our clients on their business plans, helping to bring clarity to their business.

What is a SWOT?

A SWOT for Business Planning is simply an analysis tool for your Strengths, Weaknesses, Opportunities and Threats.

Strengths and weaknesses look at internal factors which a company can control. Opportunities and threats are externally focused and not within the control of the company.

Benefit of a SWOT

The main advantage of a SWOT when planning is it’s clarity. It gives a clear view of its advantages over competitors, where it’s weaknesses lie so a company can either improve them or downplay them.

It offers a moment in time to analyse the opportunities it has and also recognise the potential threats that it faces.

When undertaking a SWOT analysis, it’s important to have as much information as possible – market knowledge, employee feedback, front line staff, sales staff and partners.

Let’s look at each element of the SWOT analysis tool.

Strengths when doing a SWOT for Business Planning

This is where a company looks at its competitive advantages. It looks at its resources – staff, financial, technology and sees the strength within.

Another area to look at here is the process of production, manufacturing, distribution or service delivery. Similarly, bargaining power with suppliers and it’s leverage with them can be considered a strength. Also examined in this section is the company’s location, image, profile and its reputation.

Weaknesses when doing a SWOT for Business Planning

I’ve been doing this for a long time now and some clients list an amazing amount of weaknesses while some clients believe they have none.

The reality is that every company has weaknesses and you have two choices. One, to improve them or two, downplay them. If, for example, your competitor has a better location than you, other than moving next door, your location could be a weakness. Instead of focusing on it, downplay it and focus on other key strengths.

If your goal is to improve your weaknesses, think about the kind of implementation plan that would be needed to address this. Look at any roadblocks and assess progress on these regularly.

Opportunities when doing a SWOT for Business Planning

This is always a great area to discuss. Some clients have so many opportunities that the list goes off the flipchart page! It is important to identify opportunities – new markets, new ways to grow, changes in the marketplace, new technologies, new social change – so that the company doesn’t stagnate.

When you have a good handle on your financial position, you will be able to prioritise going after certain opportunities, knowing you’ve made an informed decision. This will also allow you to react quickly to such opportunities in the market.

Threats when doing a SWOT for Business Planning

This is the not so fun part of the analysis tool. However, it can’t be overlooked. It’s better to be aware of the threats so the company can face them head on.

A key area to look at is understanding competitive threats –knowing your competition is key and how you can gain more market share therein.

There is a formula that really helps identify possible threats, outside of the competitive threat. It’s called the PESTLE formula – it looks at political, economic, social, technological, legal and economic threats.

By analysing and understanding the threats in this area, then a company can decide how to respond to the threats facing its business.

Regular Review

A SWOT analysis should be done on a regular basis. You can then assess if your company is facing any major changes and how it’s reacting to any threats. Running another SWOT could allow you to see the balance change. It’s essential to be informed and to be up to date with the latest trends in your industry.

If you’d like to discuss anything in this article, please get in touch.

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Develop your SWOT analysis

You can better understand your businesses strengths, weaknesses, opportunities and threats by using a SWOT analysis. Identify what your business is doing well and how you can improve with our SWOT analysis template.

On this page

Why you need a SWOT analysis

Download our swot analysis template, complete your swot analysis, use your swot analysis.

A SWOT analysis is a strategic planning tool used to assess the strengths, weaknesses, opportunities and threats of your business.

Developing a SWOT analysis can help you look at your business in a new way and from different directions. It can also help you to:

• create or fine tune your business strategy
• prioritise areas for business growth to achieve your business goals.

Our template can help you develop your SWOT analysis.

SWOT template

You can start the process by gathering a group of employees or advisors who have different perspectives on your business. If you don’t have employees, you can ask family members, business advisors or mentors. The key is to have different points of view.

Using the prompting questions below as a guide, you can conduct a brainstorming session to discuss ideas about each SWOT category. After brainstorming, create a final prioritised list of points in our SWOT analysis template. List the factors in each category from highest to lowest priority.

Consider your strengths

Strengths are internal, positive parts of your business. These are things that are within your control. Ask yourself:

• What do we do well?
• What do we do better than our competition?
• What unique assets do we have internally (such as knowledge, background, network, reputation or skills) and externally (such as customers, patents, technology or capital)?
• What positive aspects of the business give us a competitive advantage?

Consider your weaknesses

Weaknesses are internal, negative factors. These are things that you might need to improve on to be competitive. Ask yourself:

• What and where can we improve?
• What do our competitors do better?
• Where are the gaps in our assets and resources (such as knowledge, cash or equipment)?
• Is the thing that sets us apart from our competition obvious?
• How can we improve business processes?

Consider your opportunities

Opportunities are external, positive factors that may give a competitive advantage and contribute to success. Ask yourself:

• What trends can we use to our advantage to increase use of our product or service?
• Are there any changes or events that might positively impact us (such as consumer behaviour, regulation, policies or new technology)?
• Has anything changed in the market that creates opportunity for us?
• Do the public like us?

Consider your threats

Threats include external factors beyond your control that may put your business at risk. Consider putting in place contingency plans for dealing with them if they occur. Ask yourself:

• What factors beyond our control could place us at risk?
• What potential competitors may enter the market?
• Are our resource and material supplies unstable or insecure?
• Are there any changes or events that might negatively impact us (such as consumer behaviour, regulation, policies or new technology)?

Once you have completed your SWOT analysis, it can be used to develop strategies for achieving your business goals. You can create a plan to continue building on your strengths while improving on your weaknesses. When using your SWOT analysis to create a strategy, ask yourself:

• How can we use our strengths to take advantage of our opportunities?
• How can we use our strengths to minimise our threats?
• What do we need to do to overcome and minimise our identified weaknesses?

Develop a risk management plan to prepare and protect your business.

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More From Forbes

Beyond survival: requirements for small-business growth.

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President and CEO at BreezeMaxWeb .

Currently, about 33.2 million small businesses exist in the U.S., which accounts for 99.9% of businesses in the country. This, in turn, means fierce competition as customers have many available vendors to buy their niche products.

To survive in this cut-throat market, small-business leaders must formulate a strategic business plan and implement it in a proper way to achieve long-term success.

In this article, I'll discuss some ways small businesses can maintain positive growth.

Know Your Goals

First, you must identify your business goals and what you hope to achieve. A clear goal also helps you define your company's mission statement.

A business can have many goals, and some common ones include providing excellent customer service, securing and quickening the delivery of products, gaining a competitive edge, streamlining inventory management and increasing sales and profits.

Continuously Conduct Extensive Research

You must dive into extensive research on relevant information so you can best take action on your goals. For example, when it comes to providing excellent customer service, you'll want to study your target market in detail: What are their buying preferences? How much revenue is that specific audience generating in your niche market? Check out ongoing market trends and take an in-depth look at your competitors' strategies for running operations and promoting their business.

Leverage Data For Decision Making

Tapping into past and present data from your company and competitive market can help you make better decisions on business-related matters. There are various ways to analyze data, but here I'll focus on two exercises any business team can do.

SWOT Analysis

A SWOT analysis (strengths, weaknesses, opportunities and threats) is a common way for businesses to analyze data to plan strategies. It is particularly useful for decision making when a company is considering entering a new market, launching a new product or reassessing its current position in the market.

For the sake of an example, let's say our small-business team wants to weigh the data around entering a new market. The first thing we would identify is our business's strengths—things that might help us gain an edge in entering the new market. Then, we would identify the weak points that can put us at a disadvantage. Next, we would list the potential opportunities entering a new market would bring us. And lastly, we would identify the risks of doing so. Once we lay out all the data, we can get a fuller picture and be able to make a more sound decision.

Business Model Canvas

The business model canvas is a template to document existing business strategies and identify new ideas for business growth. This includes all aspects of your organization, including key partners, key activities, value propositions, cost structure and more.

Know Your Customers

An in-depth understanding of your customers is important to ensure the growth of any business. You should know what they want and how you can facilitate their requirements—because 84% of business buyers prefer to buy from an organization that understands their needs and comes up with a relevant solution.

There are various techniques to understand customer needs. You can study market trends, conduct customer surveys or collect feedback. Just make sure you're taking action.

Understand What Differentiates You

Identify the value and benefits you can provide to your customers that your competitors lack. Consider all the strong points of your business, such as excellent products or services, outstanding customer service, quick delivery of products, etc. These will help you create a unique selling proposition ( USP ) for your business—what sets you apart from your competitors?

For example, WooCommerce, a website hosting service for online businesses used as a plugin for WordPress, uses the USP, "the most customizable e-commerce platform for building your online business." This USP is effective due to its simplicity and emphasis on what makes it unique—in this case, its customization capabilities. It also effectively captures a target audience in just one sentence—e-commerce businesses looking for more customization.

Communicate With Your Staff

Communicating openly with your staff is a great way to improve an organization's internal culture and operational tasks. Look at how your company is performing and identify the areas where there's room for improvement. Then, conduct team meetings and discuss what steps you need to take to improve matters and lead to business growth.

It's also important to encourage employees to provide feedback. Note their suggestions and analyze if they can be useful in driving business growth.

In my experience, regular team meetings are essential for open communication and fostering a collaborative environment. Additionally, implementing anonymous feedback channels can encourage employees to share their thoughts and concerns more freely, leading to valuable insights for driving business growth.

Manage Finances

Of course, you have to properly manage your finances for your business to succeed and grow. Companies commonly keep track of revenues and expenses and prepare a financial report to see if the company is operating at a loss or profit. This helps identify your business's unnecessary expenses, which you need to cut down to save more money and widen your profit margin.

Reduce these costs, plan a budget and ensure your expenses don't exceed that budget.

Automate Operations

Managing your organization's operational tasks isn't a walk in the park. There is a huge chance of committing errors and failing in these tasks, especially when you try to complete them simultaneously.

To avoid—or at least minimize—these issues, take advantage of the Internet and use smart tools powered with artificial intelligence to streamline your task management. For example, smoothly managing inventory is essential for a commerce business, but it's difficult to accurately track and manage your stock without a proper inventory management system (IMS). Installing an IMS can help track inventory throughout the supply chain.

The important factors discussed above can help you beat your competition, increase your sales and grow your business. So, put these tactics into action and see the results for yourself!

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