In this article, we show you how to use the SWOT analysis correctly using a simple explanation and example.
The SWOT analysis is a strategic planning tool for identifying and understanding the strengths, weaknesses, opportunities, and threats affecting a business, project, or situation.
In fact, this tool is extremely flexible—when used correctly—and can help decision-making in all sorts of circumstances.
But first, let’s start with a definition before moving onto the SWOT analysis example.
What Is a SWOT Analysis?
You’re probably familiar with the SWOT (sometimes called the TOWS) analysis matrix or grid.
But let’s be clear, this is not the analysis!
It’s simply a means to capture information, so you can do the analysis later.
Yes, that’s right. The SWOT analysis begins by collecting information about the organization or project and ends with decisions based on an interpretation of the information summarized in the matrix.
What’s more, the SWOT analysis is a useful way of drawing together analyses of an organization’s external environment—for example, using PEST and Porter’s Five Forces—and the internal environment, e.g., Porter’s Value Chain, resource analysis and so on.
How to Use a SWOT Analysis
Since the SWOT analysis is unique to each business, we can only give some general pointers. However, there are several things that can be done to enhance the quality of your SWOT.
Follow these tips and use them in the following example SWOT analysis.
An effective SWOT analysis
Here are our tips for a perfect SWOT analysis:
- use a SWOT analysis to distinguish between where you are now and where you wish to be,
- be realistic about your strengths and weaknesses,
- be specific: only include key points and issues,
- relate strengths and weaknesses to critical success factors,
- always aim to state strengths and weaknesses in competitive terms,
- rank points in order of importance, and
- finally, keep it brief and never longer than a page.
Strengths, Weaknesses, Opportunities, and Threats
Strengths and weaknesses are internal to the business and are controllable. Conversely, opportunities and threats are uncontrollable external forces that act upon the situation.
