A SWOT analysis is a structured planning method that evaluates four elements (strengths, weaknesses, opportunities, and threats) of an organization, project, or individual. SWOT Analysis is a simple but useful framework for analysing your organization’s strengths and weaknesses and the opportunities and threats that you face. It helps you focus on your strengths, minimize threats, and take the greatest possible advantage of opportunities available to you.
There are several ways that SWOT can be used. It can be used to begin strategy formulation, or in a more complex way as a strategy tool. You can also use it to get an understanding of your competitors, which can give you the insights required to create a coherent and successful competitive position.
When doing a SWOT analysis, you should only include strengths that your business or yourself possess. Strengths should be competitive advantages uniquely owned by you. A business owner may think about brand equity that sets them apart in the industry, what does it stand for and how their brand engages with their customers.
This is where you identify weaknesses that you or your business uniquely faces, and focus on the factors that could be a barrier from being competitive. Business owners may consider if their brand stands out in the market and if their customers understand their brand.
Opportunities are ways where you can think through the various ways you can expand your personal or business brand because those opportunities will likely impact your business.
This is where you should consider the potential threats to your brand or business. As you consider your analysis, be open to the possibilities that exist within a weakness or threat. Recognize that an opportunity can become a threat if everyone else sees the opportunity and plans to take advantage of it as well, thereby increasing your competition.
Better understanding the factors affecting your focus area can put you in a better position for action. This understanding helps as you identify the issues or problems you intend to change, set or reaffirm goals, and create an action plan.
How do you perform a SWOT analysis?
- Determine your objective. This is what you want the focus or outcome of this analysis to be.
- The best way to plan is visually, and a grid is the most appropriate solution for a SWOT analysis. Draw a large square and then divide it into four smaller squares, labelled “Strengths” inside the top left box, “Weaknesses” inside the top right box, “Opportunities” within the bottom left box, and “Threats” inside the bottom right box.
- Brainstorm your strengths and weaknesses. Add factors that affect the objective/focus to the applicable areas. SWOT analyses can be either quantitative or qualitative in nature.
- Draw conclusions by analysing the finished SWOT diagram. The outcome of the analysis should help drive your strategic decisions.