SWOT Analysis

Author: Jim Riley  Last updated: Sunday 23 September, 2012

SWOT analysis is a method for analysing a business, its resources, and its environment.

SWOT is commonly used as part of strategic planning and looks at:

• Internal strengths
• Internal weaknesses
• Opportunities in the external environment
• Threats in the external environment

SWOT can help management in a business discover:

• What the business does better than the competition
• What competitors do better than the business
• Whether the business is making the most of the opportunities available
• How a business should respond to changes in its external environment

The result of the analysis is a matrix of positive and negative factors for management to address:

The key point to remember about SWOT is that:

Strengths and weaknesses

• Are internal to the business
• Relate to the present situation

Opportunities and threats

• Are external to the business
• Relate to changes in the environment which will impact the business

Using SWOT analysis

There is no point producing a SWOT analysis unless it is actioned! SWOT analysis should be more than a list - it is an analytical technique to support strategic decisions

Strategy should be devised around strengths and opportunities

The key words are match and convert:

A key challenge for any business is to convert weaknesses into strengths.  For example:

Don’t forget that for every perceived threat, the same change presents an opportunity for business.

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