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Introduction to SWOT Analysis

A look at arguably the most famous strategic analysis tool - the SWOT Analysis 📑

  • Lucidity
  • 2 min read

What is a SWOT Analysis?

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.

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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.

What are the advantages of SWOT?

SWOT as a framework has several advantages:

  • It’s simple to understand and use
  • There’s an easy process to follow through (see below)
  • You can do it on your own, as a team in person, or as a group remotely
  • It can provide a good analysis of both internal and external issues

What are some of the limitations of SWOT?

While it’s a great tool, SWOT can be mishandled:

  • SWOT itself is not an analysis, but a framework for capturing analysis conclusions
  • It has no actions within the framework
  • It is easy to be too broad or not factual enough, which will disrupt the SWOT
  • It doesn’t contain a way to weight the importance of the elements of the SWOT

How do you make the most out of SWOT?

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:

  • Prepare for the session by getting feedback from clients
  • Talk to your employees and get their thoughts on the business
  • Always be honest in the SWOT - these are internal tools to help you

What preparation should be done before a SWOT?

While no preparation is required for a SWOT, it is helpful to have knowledge of:

  • Current client relationships
  • Example good case studies of sales and service
  • Example bad case studies of sales and service
  • Latest news in your sector
  • Any competitive activity your aware of
  • Employee feedback

If in a group, these can be shared via an email beforehand or presented on the day.

Who invented SWOT?

SWOT is commonly credited to a researcher called Albert Humphrey from SRI, an independent research centre in the 1960s/1970s.

What’s the best medium for running a SWOT session?

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.

What is an example SWOT?

Many example SWOTs can be found in Lucidity such as:

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How often is SWOT updated?

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.

Ready to create your own SWOT? Check out our guide! 🙌

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