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What is the SWOT analysis?

SWOT Analysis - Ali Pir

What is the SWOT analysis?

SWOT stands for strengths, weaknesses, opportunities, and threats. So, SWOT analysis is a framework used for evaluating these four aspects and developing strategic planning.

SWOT analysis can guide you to analyze the current performance of your company and design an effective strategy for the future. SWOT can also identify the weak spots of your business and areas where competitors could take advantage of you.

Both internal and external factors are evaluated by SWOT analysis. What happens inside of your organization is considered an internal factor. Strengths and weaknesses fall into this category. Examples of internal factors include financial and human resources, tangible and intangible assets, and operational efficiencies. What happens outside of your organization is considered an external factor. Opportunity and threat come into this category. External factors include macroeconomics, technological change, legislation, and sociocultural changes, as well as changes in the marketplace.  So, with SWOT analysis you can make the wisest decision for your organization or business.


The importance of SWOT analysis

SWOT analysis enables you to find a solution for critical situations and to discover weaknesses in your organization’s performance that could be dangerous. Doing SWOT analysis can give you a better understanding of the current situation, and help you to develop a useful strategy for any situation.

For instance, you may discover some of your organization’s strengths, but they cannot be reliable until you compare them with weaknesses and potential risks.

Equally, you may find some weaknesses in your business but by performing the analysis, you could find a solution, overlooked before, that can overcome those weaknesses.


How to write a SWOT analysis

SWOT analysis is far more than making a list. For example, the planning and research process that you’ll go through for making one list (say, strengths), will generate ideas for making the other lists (Weaknesses, Opportunities or Threats). By comparing the elements of these lists, you will probably find your expected connections and contradictions.

You need to check these lists and revise them constantly. So, it will be more convenient and effective if you arrange the four lists together in one view. You can use a 2×2 grid matrix for making this list and write each of the four aspects of SWOT in the grids.


How to conduct a SWOT analysis

Do not perform the analysis on your own. Your understanding of your business is limited and partial and you may make decisions based on false assumptions. So, you need a group of people from a wide range of expertise and levels to make an effective list of observations.

Every time you find a Strength, Weakness, Opportunity, or threat, you have to write it in the relevant analysis grid for all group members to see.


Let’s elaborate on the four elements of the SWOT.



Strengths are actions that are done in your organization at the optimum level and make your business distinct from others. These might be having experienced motivated staff, access to high-quality materials, a set of advanced material tools or anything that can be advantageous and keep you ahead of your competitors. Strengths are an important element of your organization. So, you should find the most valuable feature of your business. What are the advantages of your services over others? What makes your services distinct from others? What do you present better than your competitors? You should have reasonable answers to these questions and add them to the strengths section.



Like strengths, weaknesses are inherent features of your organization. They have a direct relationship with the staff, facilities, resources, and environment. Thus, you need to think about what the problems are and how you can fix them? Or which parts of your organization need to be improved? You also have to know what actions you should avoid.

You need to imagine what customers and your competitors think about you. Do they find a weak spot that you are unaware of? You should figure out how and why your competitors keep ahead of you?

All your weaknesses need to be mentioned. A SWOT analysis will be useful if the information is true.



Opportunities are chances or situations you can exploit from. They are usually provided by an external factor outside of the business environment and require attention to be grasped. A tool that you use or a market move could be an opportunity. Identifying and grasping opportunities can have a major impact on your business success and help you to stay ahead of your competitors.

Opportunities do not be necessarily huge. Even a small advantage can help you to develop and win over your competitors.

Global market, government policy, and changes in social patterns and lifestyles could make a great impact on your opportunities.



Threats are external factors that have a negative effect on your business. Situations like shortage of workforce, global financial crisis, or supply-chain problems are threats. It is necessary to predict threats and find a solution for them before they ruin your business.

Imagine harmful events that you confront in presenting and selling your product in the market.

You need to always watch your competitors’ developments closely and consider whether you need any changes to stay in the competition. Keep in mind that copying your competitors’ strategies is not always a good idea. First, you should examine whether it is a useful strategy.

You should be sure that your organization is not threatened by any external challenges. Issues like lack of funding and other resources, opposition from forces in the community, and interpersonal problems within the organization could destroy your business so you need to be alert.


When is the best time for using SWOT analysis?

Using SWOT analysis is not always necessary. It will be helpful when you need a general overview of situations, scenarios, or your business.

  • A SWOT analysis will be most effective:
  • Before making a major change in the plan
  • When you launch a new brand
  • If you are looking for opportunities for development and growth in your business
  • When you want to evaluate your business performance
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