SWOT Analysis

Purpose

A SWOT analysis is a valuable tool to quickly analyze various aspects of the current state of the business process undergoing change.

Description

SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats. SWOT analysis is a framework for strategic planning, opportunity analysis, competitive analysis, business and product development.

Elements

The steps to conduct a SWOT analysis are as follows:

• Draw a grid or matrix.
• Describe the issue or problem under discussion at the top of the grid.
• Conduct a brainstorming session to complete each section in the grid. Strengths and Weaknesses are factors internal to the organization, organizational unit, or solution, while Opportunities and Threats are external factors.
  • Strengths: Anything that the assessed group does well. May include experienced personnel, effective processes, IT systems, customer relationships, or any other internal factor that leads to success.
  • Weaknesses. Those things that the assessed group does poorly or not at all. Weaknesses are also internal.
  • Opportunities. External factors that the assessed group may be able to take advantage of. May include new markets, new technology, changes in the competitive marketplace, or other forces. Opportunities exist beyond the scope of control of the assessed group; the choice is whether or not to take advantage of one when it is identified.
  • Threats. External factors that can negatively affect the assessed group. They may include factors such as the entrance into the market of a new competitor, economic downturns, or other forces. Threats are also outside of the group’s control.
• Facilitate a discussion to analyze the results. Remember that the group has identified only potential characteristics of the problem. Further analysis is needed to validate the actual characteristics, ideally confirmed with data.
• Once the characteristics of the issue or problem have been validated, the group brainstorms potential solutions to solve the problem. A standard practice for this is to compare internal strengths and weaknesses against external opportunities and threats and try to define strategies for each cell in the matrix.

SWOT Matrix

Usage Considerations

Advantages

The SWOT analysis helps quickly analyze various aspects of the current state of the organization and its environment prior to identifying potential solution options.

Disadvantages

The SWOT analysis is a very high-level view; more detailed analysis is almost always needed.