SWOT Analysis is one of the most widely recognized and used business strategic tools in the past decades. Even if you haven’t used it yet, you must have heard about it thousands of times in classes, workshops, or brainstorming sessions.
Let’s dive into what makes SWOT Analysis so powerful and how to apply it effectively.
What is SWOT Analysis
SWOT was developed by Albert Humphrey in the 1960s during his work at the Stanford Research Institute.
It stands for Strengths, Weaknesses, Opportunities, and Threats. This framework helps organizations and individuals identify internal factors (Strengths and Weaknesses) and external factors (Opportunities and Threats) to formulate effective strategies.
The essence of SWOT lies in its structured approach to situational analysis:
- Strengths: What advantages do you or your organization have? (Internal)
- Weaknesses: Where are the gaps or limitations? (Internal)
- Opportunities: What external conditions could benefit you? (External)
- Threats: What external conditions could harm you? (External)
Whether you're crafting a business strategy, evaluating a project, or planning your personal growth, SWOT Analysis provides the clarity you need to succeed.
Variations of SWOT: Exploring Combinations
SWOT becomes more insightful when you explore the interplay between its components. Here are four combinations that add depth to your analysis:
- SO (Strengths + Opportunities): How can your strengths help you seize opportunities?
- WO (Weaknesses + Opportunities): Can opportunities help you overcome weaknesses?
- ST (Strengths + Threats): How can you use strengths to counter threats?
- WT (Weaknesses + Threats): How can you minimize weaknesses to mitigate threats?
These combinations guide strategy formulation, encouraging proactive and targeted actions.
Defining Key Factors in Each Area
Many resources explain what SWOT is, but the real challenge lies in correctly identifying the factors within each quadrant.
Here are some practical examples to help you define each area. You can definitely use this as a checklist while conducting SWOT analysis, it will help you identify the key areas, and most importantly, prevent missing
SWOT Strengths Considerations
- Capabilities
- Competitive advantage
- Resources, assets and people
- Experience, knowledge and data
- Financial reserves, returns
- Marketing, reach
- Innovative aspects
- Location, geographical
- Price, value and quality
- Processes, systems, IT, communications
- Advantages of proposition
