If you’ve ever worked in a corporate office environment, you may have come across the term “SWOT analysis.” This has nothing to do with evaluating militarized law enforcement response units, and everything to do with taking a long, hard look at your company.
Conducting a SWOT analysis is a powerful way to evaluate your company or project, whether you’re two people or 500 people. In this article, you’ll learn: what a SWOT analysis is, see some SWOT analysis examples, and learn tips and strategies for conducting a comprehensive SWOT analysis of your own. You’ll also see how you can use the data a SWOT exercise yields to improve your internal processes and workflows, and get a free, editable SWOT analysis template.
What is a SWOT analysis?
A SWOT analysis is a technique used to determine and define your Strengths, Weaknesses, Opportunities, and Threats – SWOT.
SWOT analyses can be applied to an entire company or organization, or individual projects within a single department. Most commonly, SWOT analyses are used at the organizational level to determine how closely a business is aligned with its growth trajectories and success benchmarks, but they can also be used to ascertain how well a particular project – such as an online advertising campaign – is performing according to initial projections.
Whatever you choose to call them, SWOT analyses are often presented as a grid-like matrix with four distinct quadrants – one representing each individual element. This presentation offers several benefits, such as identifying which elements are internal versus external, and displaying a wide range of data in an easy-to-read, predominantly visual format.
SWOT analysis definition
We know that SWOT stands for Strengths, Weaknesses, Opportunities, and Threats – but what does each of these elements mean? Let’s take a look at each element individually
Strength
The first element of a SWOT analysis is Strengths
- Things your company does we
- Qualities that separate you from your competitor
- Internal resources such as skilled, knowledgeable staf
- Tangible assets such as intellectual property, capital, proprietary technologies, etc.
As you’ve probably guessed, this element addresses things that your company or project does especially well. This could be something intangible, such as your company’s brand attributes, or something more easily defined such as the unique selling proposition of a particular product line. It could also be your people, your literal human resources: strong leadership, or a great engineering team.
Weaknesses
Once you’ve figured out your strengths, it’s time to turn that critical self-awareness on your weaknesses.
- Things your company lacks
- Things your competitors do better than you
- Resource limitations
- Unclear unique selling proposition.
What’s holding your business or project back? This element can include organizational challenges like a shortage of skilled people and financial or budgetary limitations.
This element of a SWOT analysis may also include weaknesses in relation to other companies in your industry, such as the lack of a clearly defined USP in a crowded market.
Opportunities
- Underserved markets for specific products
- Few competitors in your area
- Emerging needs for your products or services
- Press/media coverage of your company
Can’t keep up with the volume of leads being generated by your marketing team? That’s an opportunity. Is your company developing an innovative new idea that will open up new markets or demographics? That’s another opportunity.
In short, this element of a SWOT analysis covers everything you could do to improve sales, grow as a company, or advance your organization’s mission.
Threats
The final element of a SWOT analysis is Threats – everything that poses a risk to either your company itself or its likelihood of success or growth.
- Emerging competitors
- Changing regulatory environment
- Negative press/media coverage
- Changing customer attitudes toward your company.
This could include things like emerging competitors, changes in regulatory law, financial risks, and virtually everything else that could potentially jeopardize the future of your company or project.
SWOT analysis internal and external factors
The four elements above are common to all SWOT analyses. However, many companies further compartmentalize these elements into two distinct subgroups: Internal and External.
Internal factors
Typically, Strengths and Weaknesses are considered internal factors, in that they are the result of organizational decisions under the control of your company or team. A high churn rate, for example, would be categorized as a weakness, but improving a high churn rate is still within your control, making it an internal factor.
External factors
Similarly, emerging competitors would be categorized as a threat in a SWOT analysis, but since there’s very little you can do about this, this makes it an external factor. This is why you may have seen SWOT analyses referred to as Internal-External Analyses or IE matrices.
How to do a SWOT analysis
- Gather your team together—ideally bring candy.
- Set up your quadrants—on a whiteboard or projector (perhaps using our template).
- Start with strengths—ask the below list of questions.
- Follow suit with weaknesses, opportunities, and threats.
- Organize the information collected into a neat and tidy document.
- Send out to the team with notes.
- Organize a second meeting to come up with action items and owners.
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