How to Conduct a SWOT Analysis

SWOT stands for strength, weaknesses, opportunities, and threats. As a tool for strategic planning, SWOT analysis can be useful in plotting your next moves. It provides a comprehensive view of your advantages and disadvantages as well as the broader factors in the environment that you need to address or harness for your benefit. A SWOT analysis can be conducted in a variety of settings for various purposes. For instance, a SWOT analysis can be done in a personal context; that is, you can assess your own strengths and weaknesses as well as the threats and opportunities in the environment. But for convenience, this post focuses on SWOT analysis of an organization in a business context since this is a very common project assigned to students.

Preparation

Begin by identifying the organization that will be analyzed. In some cases, the professor will assign you a specific organization, ask you to choose one from a list of companies, or identify the industry and then let you choose your own organization. If the choice is left to you, opt for an organization that you are familiar with or one that is well-known. Being familiar with the organization will allow you to analyze it better as compared to an organization that you have very little knowledge about. Also, it will be easier for you to gather information about a well-known organization than an obscure one. For example, global brands such as H&M and Toyota are usually publicly traded and thus these companies regularly publish reports available to the public. Such companies also frequently feature in the news, journal articles, and business publications, thus giving you a wealth of information you can use in analysis. That said, avoid overused companies such as Apple, Starbucks, and Walmart unless you can provide a fresh perspective.

swot analysis business strengths weaknesses opportunities threatsStrengths

As the term itself suggests, strengths are the attributes of an organization that give it advantages or a competitive edge over others. Strengths are internal factors, which means that they have to exist within the organization. Examples of strengths include a large market share, a loyal clientele, advanced technology, a strong research and development program, a consolidated supply chain, and even an excellent reputation or a well-developed value proposition. When analyzing the company’s strengths, try asking questions such as:

  • Where does the company excel?
  • How do its clientele and the general public perceive it?
  • What does the company do better than any of its competitors?
  • What makes the company successful?
  • Which assets, tangible and intangible, give it an edge in the competition?

Weaknesses

As opposed to strengths, weaknesses are internal attributes that prevent a company from optimizing its performance. These factors can be problems in the company’s operations or areas that require further improvement. Examples of weaknesses include a high turnover rate, problematic organizational culture, weak leadership, and an unfavorable reputation among others. Some questions to ask when analyzing weaknesses include:

  • What areas of the company need improvement?
  • Do the employees have grievances towards the company?
  • Are there outdated practices that the company needs to update?

Opportunities

Opportunities are external factors that a company can take advantage of to optimize performance. Opportunities can be diverse depending on the industry. Examples of opportunities include emerging technologies the company can adopt, favorable legislation, and untapped markets. When looking for opportunities, some questions you may ask are the following:

  • Are there new markets the company can expand into?
  • Are there pending laws that will give the company advantages?
  • Are there new technologies that your company can adapt or develop?
  • Are there partnerships your company can build?
  • What environmental factors can your company respond to in order to grow?

Threats

While opportunities may positively affect your company, threats are factors that have the potential to negatively affect a company. Threats are external, which means that these factors are usually beyond the company’s control. These can range from unfavorable government legislation and political instability to climate conditions and technological changes. While threats are often beyond a company’s control, this does not mean that they cannot be mitigated. Some questions to ask when analyzing threats are the following:

  • Are there potential laws that could drastically affect the industry’s operations?
  • Are there new products or technologies that could eventually replace the company?
  • Is the company operating in a politically unstable or environmentally hostile place?

swot analysis business strengths weaknesses opportunities threatsThe SWOT Matrix

Conciseness is important in making your SWOT analysis, and thus you should determine how many of strengths, weaknesses, threats, and opportunities you should feature in your paper. Professors usually expect three to five for each, though you may go beyond this number if required. What is important is for you to fully develop, justify, and support with evidence each of the factors that you present.

Adding a swot matrix can also help you enrich the discussion, since this provides the gist of your paper. A matrix is presented as quadrants, with strengths and weaknesses featured in the top two quadrants and the threats and opportunities presented on the bottom. An example of a SWOT matrix is presented above.

Recommendations

The final part of a SWOT analysis covers the recommendations. Some professors require recommendations to be included in the paper, whereas some require these as a separate assignment. When making recommendations, make sure you maintain consistency; that is, your recommendations should directly correspond with the factors. In general, recommendations should be aimed at fortifying strengths, improving weaknesses, taking advantage of opportunities, and mitigating threats. Recommendations should also be detailed enough and supported by evidence.