A SWOT analysis can prove extremely useful during your strategic planning process.

It can assist in you the achievement of your goals by maximizing your strengths and weaknesses. Strengths and weaknesses are often internal to your organization while opportunities and threats generally relate to external factors.

On top of this, SWOT analysis is a flexible tool that can be used for far more purposes than just business and marketing. For example, it can be used where you may be trying to decide to relocate or for personal career development.

A SWOT analysis will provide you with the insights to adjust and take appropriate action to address any weaknesses or threats that are preventing you from achieving your objectives. In the absence of such analysis, these risks remain unidentified. By developing an understanding of the weaknesses in your business, you can manage and eliminate them.

It is a very useful technique for understanding the strengths and opportunities open to your business. The analysis can help you uncover opportunities that you are well-placed to exploit.

A SWOT analysis summarizes the key issues from the business environment and the strategic capability of the organization that is most likely to impact on strategic development. In doing so it provides a useful basis against which to generate strategic options and assess future courses of action (Johnson, Scholes, and Whittington, 2008).

Understanding the SWOT Analysis

What is the aim of a SWOT Analysis?

The aim is to identify to which strengths and weaknesses are relevant to, or capable of dealing with, the changes taking place in the business environment.

How to get the most out of a SWOT Analysis?

The analysis becomes useful when comparing with competitors. Therefore, we must examine strengths, weaknesses, opportunities and threats in relation to our competitors. By looking at your business and your competitors you can begin to design a strategy that helps you distinguish yourself from your competitors. This will enable you to compete successfully in your market.

It is also important to identify what is really important and what is less important. Another factor to consider is that a SWOT analysis will only as good as the data or information put into it.

We must be aware of overgeneralization. Identifying a very general explanation of strategic capability does not explain the underlying reason for that capability. Therefore, it is necessary to undertake further investigation and analysis.


This involves listing all your strengths, your positive attributes. They are tangible and intangible, internal to your business. You would be considering the reputation of your company, any patents, capital, copyrights, trademarks etc. Your business’s location, facilities, and equipment. You are essentially looking at the things that give you an edge over your competitor. What does your business have that your competitors do not.

What is your unique selling point (USP)? Your advantages? The things that people in your markets view as being your strengths.


  • The knowledge, background, education, credentials, reputation, or skills of the employees in your company.
  • Your tangible assets. These would include capital, credit, existing customers or distribution channels, patents, or technology.
  • What advantages do you have over your competition?
  • Your research and development capabilities.
  • What you offer that gives you a competitive advantage?
  • Your Marketing reach, and awareness.
  • The Innovative ability of your business.
  • Location and geographical of your company.
  • The quality of the products of services you provide.
  • The Culture within your business.


These are the factors that erode your competitive advantage or put you at a disadvantage. These areas need to be enhanced so that your business can compete effectively against your best competitor.

It involves considering:

  • What could you improve in your business and what are your vulnerabilities?
  • What are people in your market likely to see as weaknesses?
  • The factors that need improvement in order to achieve your objectives.
  • The areas that are within your control that are currently holding you at a disadvantage?
  • What are your competitors doing better than you?
  • What should you avoid?
  • Factors that need to be addressed to enable you to compete with your strongest competitor?
  • It involves considering what expertise and skills are needed, or technology required to compete.
  • Does your business have limited resources, in a poor location?
  • Weaknesses will include factors such as financial problems, reputation, poor cash flow, poor morale or a small, unprofitable customer base.


Opportunities involve looking at the reasons your business is likely to prosper. It involves considering what opportunities are available or coming up. What interesting trends can you identify? It is useful to look at your strengths and try to identify whether these open up any opportunities.

These opportunities can include:

  • Changes in technology and markets.
  • What opportunities exist in your market that you can benefit from?
  • Recent market growth that may have a positive impact on your business.
  • Competitors’ vulnerabilities that could enable you to create a competitive advantage over them.
  • When looking for the opportunity it is important to consider timing. Is the opportunity available for a short time period? Or will it be available for longer? Getting the timing right can be a crucial element for successfully exploiting an opportunity.
  • Global influences, market developments, or niche target markets that may provide you with an opportunity.
  • Changes in social patterns, population profiles, lifestyle changes, and so on.


These are the things working against your business and include external factors beyond your control. These factors could place your business at risk but you may benefit by establishing contingency plans to address such issues if they occur. Threats may include a new competitor entering your market, losing a supplier or new or changing laws that may negatively impact your business. PEST Analysis can be useful to use here as it can help to ensure that you don’t overlook external factors, such as new government regulations, or technological changes in your industry.

  • What obstacles do you face and what factors beyond your control could place your business at risk?
  • Are there any political, legislative or environmental issues that affect your business?
  • Who are your existing or potential competitors and what are they doing?
  • Are there challenges created by an unfavorable trend or development that may lead to deteriorating revenues or profits?
  • What situations might threaten your marketing efforts?
  • Has there been a significant change in supplier prices or the availability of raw materials?
  • Is the employment market threat to your organization?
  • What about shifts in consumer behavior, the economy, or government regulations that could reduce your sales?
  • Has a new product or technology been introduced that makes your products, equipment, or services obsolete?
  • Are quality standards or specifications for your job, products or services changing?
  • Is changing technology, services, or ideas threatening your position?
  • Do you have bad debt, cash flow or credit pressure problems?

You need to identify if any of these weaknesses can seriously threaten your business.

Benefits of undertaking a SWOT Analysis

  1. The information obtained in a SWOT Analysis provides a quick overview of your company’s position.
  2. Enables you to gain a good understanding of your business.
  3. It is a good way to begin and guide your strategy sessions.
  4. The analysis is quick to conduct.
  5. It makes comparison easy to carry out.
  6. SWOT Analysis can be used to drill into a specific segment. Such as marketing, and sales.



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