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SWOT Analysis

A SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis is just a tool to help remind you of the business factors (internal and external) that affect your business.

A SWOT analysis helps you:

  • Examine and build on your business (S)trengths
  • Examine your possible business (W)eakness
  • Look for business (O)pportunities
  • Examine ways you are going to counter the business (T)hreats that come at you

A SWOT analysis can be used in several ways:

  • Examine your business as a whole
  • Use it for new product launch
  • Use it for a new service launch
  • Use it to change a current process or product

A SWOT analysis is often part of your strategy and implementation part of your business plan. A SWOT analysis can assist you in better understanding of your business, it tells you in what areas you are doing well and other areas of yor business that you need to brush up on. It also helps you keep a watchful eye on your market, including your competitors, and predict changes that you will need to address to make sure your business is successful now and in future times.

A SWOT analysis is a useful business tool for brainstorming and strategic planning. You'll get more juice from your SWOT analysis if you conduct it with a specific objective in mind. For example, you can use a SWOT analysis to help you decide if and how you should:

  • take advantage of a new business opportunity
  • respond to new trends
  • implement new technology
  • deal with changes to your competitors' operations.

Building on your business strengths

A SWOT analysis will help you identify areas of your business that are performing well. These areas are critical to the overal success of your business - if you have no strengths left in your business then your business will clearly fail. But also if you can examine your strengths and then build on them not only can you maintain your business in good standing you can also improve upon it and make it even stronger.

Eradicating weakness

Conducting a SWOT analysis can help you identify weakness(es) in your business. This can often be difficult to look at - as natuarally you are biased to your business, it can be hard sometimes to admit you have a weakness in your business. A big part of many businesses weakness is actually in admitting they have a weakness - all too often companies ignore their weaknesses and concentrate on their strengths hoping that their strengths will conquer their weakness.

Business opportunities

Business opportunites usually arise from external factors to the business such as new consumer trends. By carrying out a SWOT analysis you will be able to see the internal factors (your business's strengths and weaknesses) that will tell you if you can take advantage of new business opportunities that come your way. For instance you may decide to go with the flow and jump on a new craze - this could backfire if you don't have the skills which could jeopardize your existing business - give you a bad name for example and lose you your existing customers. For example Group 4 were given a tarnished name during the 2012 Olympics as they couldn't provide enough security that they said they could provide. Fortunately for them their organization makes more money from other countries outside the UK and the whole situation has long since been forgotten about...but this is the sort of thing where a business can overstretch themselves and then fail completely like an elastic band.

Counteracting threats

Threats are external factors that could cause problems for your business, such as changes to the market, a competitor's new advertising campaign, or a change in the law. A SWOT analysis can help you identify threats and ways to counteract them, depending on your strengths and weaknesses. A good exampe of law changes are for public places ban on smoking. Lots of drinking establishments have closed due to people not being able to smoke inside them any longer

Addressing individual issues

You can conduct a SWOT analysis to address individual issues, such as:

  • staffing
  • business culture and image
  • organisational structure
  • advertising
  • financial resources
  • operational efficiency.

When you're conducting an individual SWOT analysis, keep in mind that a strength for one issue might be a weakness for another. You might also identify a weakness, such as a gap in the market that you're not covering, that could be an opportunity for your business.

Benefits and limitations of SWOT analysis

A SWOT (strengths, weaknesses, opportunities and threats) analysis can help you identify and understand key issues affecting your business, but it does not necessarily offer solutions. You should be aware of the limitations as well as the benefits of a SWOT analysis before you decide to conduct one.

Knowing what you can reasonably expect to achieve will make the SWOT analysis more useful for your business, and will save you time.

Benefits of SWOT analysis

The main advantages of conducting a SWOT analysis is that it has little or no cost - anyone who understands your business can perform a SWOT analysis.

You can also use a SWOT analysis when you don't have much time to address a complex situation. This means that you can take steps towards improving

your business without the expense of an external consultant or business adviser.

Another advantage of a SWOT analysis is that it concentrates on the most important factors affecting your business. Using a SWOT, you can:

  • understand your business better
  • address weaknesses
  • deter threats
  • capitalise on opportunities
  • take advantage of your strengths
  • develop business goals and strategies for achieving them.

Limitations of SWOT analysis

When you are conducting a SWOT analysis, you should keep in mind that it is only one stage of the business planning process. For complex issues, you will usually need to conduct more in-depth research and analysis to make decisions.

Keep in mind that a SWOT analysis only covers issues that can definitely be considered a strength, weakness, opportunity or threat. Because of this, it's difficult to address uncertain or two-sided factors, such as factors that could either be a strength or a weakness or both, with a SWOT analysis (e.g. you might have a prominent location, but the lease may be expensive).

A SWOT analysis may be limited because it:

  • doesn't prioritise issues
  • doesn't provide solutions or offer alternative decisions
  • can generate too many ideas but not help you choose which one is best
  • can produce a lot of information, but not all of it is useful.

Tips for a successful SWOT analysis

Before conducting a SWOT (strengths, weaknesses, opportunities and threats) analysis, decide what you want to achieve with it and consider whether it is the best tool for your needs.

If you decide a SWOT analysis is the best tool, the following tips will help you get the most out of it.

  • Keep your SWOT short and simple, but remember to include important details. For example, if you think your staff are a strength, include specific details, such as individual staff and their specific skills and experience, as well as why they are a strength and how they can help you meet your business goals.
  • When you finish your SWOT analysis, prioritise the results by listing them in order of the most significant factors that affect your business to the least.
  • Get multiple perspectives on your business for your SWOT analysis. Ask for input from your employees, suppliers, customers and partners.
  • Apply your SWOT analysis to a specific issue, such as a goal you would like to achieve or a problem you need to solve, rather than to your entire business. You can then conduct separate SWOT analyses on individual issues and combine them.
  • Look at where your business is now and think about where it might be in the future, as well as where you would like to be.
  • Consider your competitors and be realistic about how your business compares to them.
  • Think about the factors that are essential to the success of your business, and the things you can offer customers that your competitors can't. This is your competitive advantage. It's useful to keep these in mind when conducting a SWOT analysis.
  • Use goals and objectives from your overall business plan in your SWOT analysis.

Conducting a SWOT analysis

So how do you conduct a SWOT analysis?

First of all you need to decide on the objective - do you want to introduce a new product to your portfoio of products for example. This may seem like a no brainer as surely the more products you have the more choice for your clients. But there are weaknesses to doing this.

Next you need to research your business, industry and market - have a meeting with your staff, try to include someone from every department, conduct market research by talking to your existing and potential customers.

List your business's strengths - don't be afraid to include obvious things, just write everything down that is a strength no matter how big or small. You are merely brainstorming at this point - later on you can focus on your core strengths.

In the same way as you listed your business's strengths now compile a list of your business weaknesses in exactly the same manner - leave nothing out.

List potential opportunities for your business - Think about the possible external opportunities for your business. These are not the same as your internal strengths, and are not necessarily definite - an opportunity for one aspect of your business could be a threat to another (e.g. you may consider introducing a new service to keep up with consumer trends, but your competitors may already have a similar service). Keep this in mind, but for the SWOT analysis, the same item shouldn't be listed as both an opportunity and a threat.

Opportunities could include new technology, training programs, partnerships, a diverse marketplace and a change of government or change in the existing laws.

List potential threats to your business - List external factors that could be a threat or cause a problem for your business. Examples of threats could include rising unemployment, increasing competition, higher interest rates and the uncertainty of global markets.

Establish priorities from the SWOT analysis - When you have completed the steps above, you will have 4 separate lists. Ideally, these lists can be displayed side-by-side so you can have an overall picture of how your business is running and what issues you need to address. You can then work out what issues are the most important and what can be put on the back burner. By prioritizing you could down on the costs of the changes you need to implement (if any) and you are more likely to maximize your profits for your business.

Develop strategies to address the issues raised from the SWOT analysis - delegate teams to address each point.

Example SWOT analysis

This is an example of a SWOT analysis in deciding whether to introduce a new service into their portfolio.


  • Excellent sales staff with strong knowledge of existing services
  • Good relationship with customers
  • Good internal communications
  • Excellent footfall
  • Successful marketing strategies
  • Reputation for innovation


  • Currently struggling to meet deadlines - too much work?
  • High rental costs
  • Market research data may be out of date
  • Cash flow problems
  • Holding too much stock
  • Poor record keeping


  • Similar services on the market are not as reliable or are more expensive
  • Loyal customers
  • Service could be on the market for ideal time
  • Customer demand - have asked sales staff for similar services


  • Competitors have a similar service
  • Competitors have launched a new advertising campaign
  • Competitor opening service center nearby
  • Downturn in economy may mean people are spending less

Review the SWOT analysis

In the above example, each category of this SWOT analysis could be expanded. The business can then assess the results to decide if they can use their strengths to take advantage of the opportunities and introduce the new service. After assessing the results, they may decide that the weaknesses and threats need to be addressed before they can make any changes to their existing services offered.

When you have completed your SWOT analysis you should review the results to help you decide the next step for your business.

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