A SWOT analysis is a versatile planning tool utilising four sections of a matrix – strengths, weaknesses, opportunities and threats. It was originally conceived in the early 1960s as post-war USA was introducing legislative change to encourage small business, while simultaneously challenging the large monopolies who dominated the USA business landscape (Puyt, et. al. 2023). As such, SWOT analysis was designed for making informed decision-making and navigating competitive landscapes (The Benchmarking Group, n.d.). It is a popular tool used for brainstorming and planning to help identify the current state and make decisions when starting out, during change and in uncertain environments. A SWOT analysis can support your business strategy, prioritise areas for growth and mitigate risk (Business, 2024). It is also useful in evaluation for data collection and qualitative assessment (Reichwein, n.d.).
The first step after you determine the SWOT analysis is an appropriate method is scoping what your SWOT analysis is for and who needs to be involved (Reichwein, n.d.). You need to determine whether your SWOT is for strategic planning, problem solving, team analysis, decision making or evaluation (The Benchmarking Group, n.d.). You can do a SWOT yourself, but for the best results, get the right people together for a complete picture. (Business, 2024).
Conducting a SWOT analysis is quite straightforward. Initially, all ideas should be formally collected before refining the list as a group once brainstorming is complete. The matrix is made up of strengths and weaknesses which are internally focussed and within your control, conversely opportunities and threats, are externally focussed and outside your control (Business, 2024). While these are outside of your control, understanding their existence and taking a proactive approach towards them are likely to make your organisation more competitive. A SWOT analysis is versatile and should be context specific, however some general steps are to plan and collection data, meet and discuss as a group, identify what is important in each quadrant and then refine, analyse and act (The Benchmarking Group, n.d.).
| Strengths are what you are known for and what you excel at, think about competitive advantage, diversification, skills, expertise and brand. | Weaknesses are known problems impacting performance and growth and other areas which need significant improvement or emerging problems if not addressed. |
Opportunities are environmental, legislative, technological or new trends that could provide a competitive advantage, new funding or efficiency in technology. | Threats are about identifying and mitigating the most likely and worse case threats, e.g., inflation, regulations, supply chain disruption. |
The final step, once your SWOT analysis is created and visualised, is to consider what the next steps are and how you may use this effectively for the purposes determined in your context. It may be standalone resource, but it does often feed into a strategic plan, business proposal, or evaluation. Similar with other approaches and tools, developing a plan or project which acts on the SWOT analysis, followed by monitoring and refining over time will pay dividends.
References
Business. (2024). Develop your SWOT analysis. Australian Government. https://business.gov.au/planning/business-plans/swot-analysis
Puyt RW, Lie FB and Wilderom CPM. (2023). The origins of SWOT analysis. Long Range Planning, 56(3), 102304, https://doi.org/10.1016/j.lrp.2023.102304.
Reichwein, B. (n.d.). SWOT analysis. Better Evaluation. https://www.betterevaluation.org/methods-approaches/methods/swot-analysis
The Benchmarking Group. (n.d.). SWOT Analysis: A Practical Guide. https://benchmarking.com.au/business-benchmarks/swot-analysis/