SWOT Analysis: What It Is and How to Use It for Business Development
SWOT analysis is a strategic planning method that evaluates a brand's prospects by examining its strengths, weaknesses, opportunities, and threats. It also identifies what might pose risks to your company.
Example of a free analysis template from Visual-paradigm.com
Most researchers attribute the creation of this analytical method to Albert Humphrey, who is said to have developed it in the 1960s.
The acronym stands for Strengths, Weaknesses, Opportunities, and Threats.
Strengths and weaknesses are determined by internal processes such as production, sales, teamwork, product quality, and marketing. Opportunities and threats are related to external factors such as market dynamics, competition, legislation, and the popularity of specific products in society.
What is SWOT Analysis
S (Strengths)
These are the unique advantages that set the company apart. For example, a strong brand, a loyal customer base, a stable financial position, and so on.
Think about what makes your company unique, whether it's the enthusiasm of your team, resources, or reliable production methods. What are the core values of your product? Find something indispensable in what you offer. Try to view your business through the eyes of your competitors. What do they think helps you close deals faster?
It's important to remember that a strength becomes a strength only when it provides a concrete benefit. For example, if other companies also offer high-quality products, then this is just a market standard, not a unique feature.
W (Weaknesses)
These are the company's shortcomings. Focus on internal aspects such as staff, resources, and systems. Identify areas for improvement and what to avoid.
It is also important to understand how your competitors see you. Where do they think you have weaknesses? Be honest with yourself—this is the only way to understand what needs to be changed.
O (Opportunities)
These are external factors that positively impact the company. Study what's happening in the world and use it to your advantage. Keep an eye on trends, innovations, and changes that could affect your business.
T (Threats)
These are external factors that harm you: supply problems, market requirement changes, or a lack of qualified employees. Decide in advance how to counteract them to avoid slowing down your business growth.
Assess the difficulties in promoting and selling your product. Pay attention to changes in quality standards and technical specifications.
How to Conduct a SWOT Analysis
The SWOT analysis methodology includes several stages with additional tasks before and after evaluating the four main components (strengths, weaknesses, opportunities, threats). Here are the main steps:
1. Decide what you want to achieve
Clearly define the goal of the SWOT analysis. It is more effective when focused on a specific objective, such as making a decision about launching a new product. This makes it easier to achieve the desired results.
2. Gather necessary resources
Determine the information and personnel needed for the SWOT analysis. Pay attention to available data, potential limitations, and the reliability of external sources. Involve employees with different perspectives.
3. Collect ideas
Create a list of ideas for each category (strengths, weaknesses, opportunities, and threats). Consider internal factors such as financial resources and operational efficiency, as well as external factors like market trends and competitor actions. Encourage open discussion and creativity at this stage.
Questions to discuss at the third stage:
Internal factors:
What do we excel at?
What are our unique features?
What do we struggle with?
Which projects are the weakest?
External factors:
What market trends should we take advantage of?
Which demographic groups could become our clients?
How many competitors do we have?
Will new laws or regulations harm us?
4. Reflect on the conclusions
Review each category. Focus on the best ideas or the most significant risks for the company. Discuss your next steps.
5. Develop a strategy
Use the list of strengths and weaknesses, opportunities, and threats to create a plan. For example, if you need to decide whether to launch a new product, consider the costs, potential benefits, and the appropriate target audience. If you realize that now is not the best time for the release, conduct another analysis in six months.
Strengths of SWOT analysis
SWOT analysis won't eliminate all difficulties, but it simplifies decision-making. It breaks down complex problems, structures data, and identifies key points.
SWOT analysis considers external factors—decisions may depend on circumstances beyond the company's control.
You know your organization's strengths well, but until you document them alongside weaknesses and threats, you won't realize how unreliable those strengths might actually be.
The analysis can be applied to various business issues, whether it's the organization as a whole, a team, brand changes, a specific employee, or a product.
It combines internal information about strengths and weaknesses with external aspects: market conditions, competitors, and macroeconomic factors.
Conducting a SWOT analysis doesn't necessarily require significant expenses. You simply involve your employees—no extensive training or external experts are needed.
Weaknesses of SWOT analysis
It lacks numerical data, making it rather superficial.
It is subjective, as it depends on the opinion of the person conducting the analysis.
It requires regular updates, as it is tied to a specific time and factors affecting the company.
SWOT analysis tools
ClickUp
Pros:
Customize SWOT analysis templates to suit your needs.
Integrates with Google Workspace, Microsoft Office, and other project management tools.
Visualize your data with easy-to-use tables.
Use artificial intelligence to generate ideas.
Cons:
There are quite a lot of features, so you will likely need to spend some time learning the platform.
Some features, like ClickUp AI, are only available in the paid version.
Pricing:
Free version available (with limitations).
Unlimited plan: $7 per month.
Business plan: $12 per month.
ClickUp SWOT analysis example
Alignment
Pros:
Simple and user-friendly interface. Compresses all components of SWOT analysis into one easily readable page.
Convenient navigation between teams.
Allows real-time messaging.
Available for both PC and smartphones.
Cons:
Prices may be prohibitive for some small-budget businesses.
No access to enhanced support in the free version.
Pricing:
Free version available.
Professional plan: starting at $5/month.
Advanced plan: $10,000/month.
SWOT analysis template from Alignment
Visual Paradigm
Pros:
Intuitive interface.
Allows for messaging.
Highly customizable. Convenient for creating UML diagrams.
Cons:
Free plan has limitations.
Some users report glitches and slow loading times.
Pricing:
Free plan available.
Basic: starting at $4/month.
Advanced: starting at $9/month.
Combo: starting at $15/month.
SWOT analysis matrix from Visual Paradigm
Safety Culture
Pros:
Simple interface (though some features may be challenging).
Useful templates for identifying issues.
Built-in AI.
Cons:
Difficult to invite employees for collaboration.
Limited customization options on the free version.
Pricing:
Free version available.
Premium: $24/month.
Advanced plan: pricing available upon request.
Free template by Safety Culture
Canva
Pros:
20 types of professional charts.
Ability to embed SWOT diagrams in presentations.
Very simple interface.
Customizable appearance of your chart (e.g., for use in a corporate report).
Templates available.
Cons:
Requires a fast internet connection.
Limited customization options.
Pricing:
Free version available.
Pro version: $12.99 per month.
An template example from Canva
What NOT to do
Here’s what to avoid when working on a SWOT analysis:
Avoid making your lists too long. Check the feasibility of your ideas as you implement them.
Do not use abstract concepts or ideas. You need specificity.
Do not ignore weaknesses. Communicate with employees or customers to understand where improvements are needed.
Do not be afraid to think about the future. How will your ideas affect the company? Can you achieve the desired outcome?
Do not make overly ambitious plans. Consider existing capabilities. Don’t mistake wishes for reality.
Do not think that SWOT analysis is a cure-all. Combine it with other planning tools such as SOAR, TOWS, or PEST. Try Gantt charts to boost productivity. Monitor brand health.
Conclusion
SWOT analysis is a useful tool for assessing the internal and external factors affecting a company or product. It helps you identify organizational strengths, market opportunities, and potential risks.
This analysis is valuable not only during crises but also as a regular practice to adjust plans in response to changing market dynamics.
While SWOT analysis does not provide specific numbers, its qualitative assessment helps generate fresh ideas and identify growth paths. Study both internal opportunities and external market conditions to optimize performance and gain advantages.