What is a SWOT Analysis?

SWOT Analysis is a strategic tool used to help identify an organization’s Strengths, Weaknesses, Opportunities and Threats (SWOT). It is a simple, yet powerful tool to help you better understand the internal and external environment you’re operating in, and the potential risks and opportunities that may come with it.

Strengths and Weaknesses

The first two components of the SWOT, Strengths and Weaknesses, are internal factors derived from an assessment of the “here and now.” Strengths are the advantage you gain over competitors such as your resources, abilities, and organisational culture. Weaknesses are gaps in the organisation, such as inadequate resources, factors within the environment, or elements of your culture that don’t work in your favour.

Opportunities and Threats

Opportunities and Threats are external factors within the environment, rather than inherent elements of the organization. Opportunities are chance or outside influences that you can take advantage of, such as a new technology or the opening of a new market. Threats are potential problems or risks you should prepare for, such as legislative changes, changes in consumer attitudes and benefit from competitors.

Using the SWOT Analysis

Once you have identified the above points, you can use a SWOT analysis to analyse the strengths, weaknesses, opportunities and threats of a project or business activity you’re considering. This will help you make more informed decisions. For example, you may choose to focus your resources on developing a product or service that capitalizes on a market opportunity. Or you may use the SWOT analysis to identify potential issues with a project and make plans to mitigate those risks.

Applying the SWOT

Once you’ve identified the positive and potential negatives of a business activity, you can use the SWOT to inform your decisions. A SWOT analysis can help you reduce the likelihood of a business failure or decision, provide a benchmark of where you are now, and support the development of objectives to help take the business to a desired state.

Conclusion

By using the SWOT analysis, you can gain deeper insight into the many elements of your business or project. This can help you determine what resources you need to develop and grow the business, as well as identify any potential problems. By doing so, you can make more informed decisions and keep your business on track towards its goals.