A SWOT Analysis is a framework for identifying Strengths, Weaknesses, Opportunities and Threats. It is often presented a 2x2 matrix and can be applied to any business and industry, from non-profit charities through to large corporate entities.
The structure of the grid means the top row looks at all internal issues, both positive and negative, while the bottom evaluates the external factors. Similarly, the left of the grid is positive, while the right of the grid is negative.
A well thought out SWOT will provide you with new opportunities to go for as well as ensuring threats to your business are mitigated or eliminated.
SWOT as a framework has several advantages:
While it’s a great tool, SWOT can be mishandled:
It’s likely you’ll have heard of SWOT before, it’s one of the few strategic frameworks to enter the lexicon for most people in business. If done well, a SWOT can be one of the most powerful and revealing frameworks.
There are three golden rules to follow before you begin your SWOT:
While no preparation is required for a SWOT, it is helpful to have knowledge of:
If in a group, these can be shared via an email beforehand or presented on the day.
SWOT is commonly credited to a researcher called Albert Humphrey from SRI, an independent research centre in the 1960s/1970s.
SWOT works best when put together by a cross-disciplined team either physically or virtually. You need a mix of employees with different experiences and market knowledge to ensure you capture all aspects of the business.
Many example SWOTs can be found in Lucidity such as:
It is best practise to review your SWOT on a quarterly basis, this helps provide you with context on if you’re succeeding towards maximising your opportunities and minimising your threats, while also taking into account of your changing landscape.
The big difference between a TOWS and a SWOT is the relationships between the internal and external factors, examining how they link up and relate to each other. You can find out more by reading our introduction to TOWS Analysis.
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