SWOT analysis (TOWS matrix) Made Simple

SWOT Analysis Made Simple – History, Definition, Tools, Templates & Worksheets

How to do a SWOT analysis

SWOT analysis made simple – date reviewed April 2016

This page has been developed to help you to carry out a SWOT or TOWS analysis. It can be used for strategic planning or business review purposes. This page is comprehensive. It contains many examples, templates and outlines.

Go straight to the free Templates (below)

Template 2 Template 3 Template 4 Page Contents (there is a lot here):

The SWOT Model

Definition of SWOT

History and Background – SOFT & SWOT Analysis

Introduction to a SWOT analysis

Overview of SWOT

Aim of a S.W.O.T. analysis

How to do a SWOT

Getting A SWOT used

Critical Success Factors (CSFs)

To SWOT or not to SWOT

A five-step process to an effective SWOT

When to use a BIR as a structured SWOT analysis tool

Possible Strengths

Possible Weaknesses

Possible Opportunities

Possible Threats

5 common mistakes in doing a SWOT analysis

Doing a SWOB analysis

SWOT Analysis

A SWOT analysis is a planning tool used to understand the Strengths, Weaknesses, Opportunities, and Threats involved in a project or a business. It involves specifying the business’s objective or project and identifying the internal and external factors that are supportive or unfavourable to achieving that objective.

SWOT is often used as part of a strategic planning process. SWOT or TOWS is an acronym for Strengths, Weaknesses, Opportunities, Threats.

There are several ways of graphically representing a SWOT analysis on a matrix or grid. Several versions of a SWOT analysis grid/ matrix are shown on this page – use the one best suited to your application and preferred style. While at first glance, this (A SWOT analysis) looks like a simple model and easy to apply, I can say from experience that to do a SWOT analysis that is both effective and meaningful requires time and a significant resource.

A true SWOT analysis cannot be done effectively by just one person. It requires a team effort.

The methodology (SWOT analysis) has the advantage of being used as a ‘quick and dirty’ tool or a comprehensive management tool. More importantly, this is not a decision that has to be made in advanced as one can lead to the other. This flexibility is one of the factors that has contributed to its success, along with many believing it is lightweight due to the lack of its original purpose.

Is a SWOT Analysis an analysis?

The term “SWOT ANALYSIS” is in itself interesting. Many believe the SWOT is not an analysis but a summary of a set of previous analyses – even if those were not more than 15 minutes of mini-brainstorming with yourself in front of your computer. The analysis or a correct interpretation comes after the SWOT summary has been produced. See our slides on Slideshare

The SWOT Analysis Matrix Model

Positive	Internal		Negative or potential to be negative ©rapidbi
	Strengths	Weaknesses
	Opportunities	Threats
	External

An Alternative SWOT Matrix:

SWOT ANALYSIS	Strengths	Weaknesses
Opportunities	Offensive-make most of these	Defensive-watch competition closely
Threats	Adjust-restore strengths	Survive -turn around ©rapidbi

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Definition of a SWOT Analysis

A process generates information that helps match an organization or group’s goals, programs, and capacities to the social environment in which it operates. Note that in itself is only a data capture – the analysis follows.

Strengths

• Positive tangible and intangible attributes internal to an organization.
• They are within the organization’s control.

Weakness

• Factors that are within an organization’s control that detract from its ability to attain the desired goal.
• Which areas might the organization improve?

Opportunities

• External attractive factors represent the reason for an organization to exist and develop.
• What opportunities exist in the environment, which will propel the organization? Identify them by their “time frames.”

Threats

• External factors beyond an organization’s control, which could place the organization mission or operation at risk.
• The organization may benefit by having contingency plans to address them if they should occur.
• Classify them by their “seriousness” and “probability of occurrence”.

 

Background & History of the SWOT Analysis

The origins of the SWOT analysis technique is credited by Albert Humphrey, who led a research project at Stanford University in the 1960s and 1970s using data from many top companies. The goal was to identify why corporate planning failed. The resulting research identified many key areas, and the tool used to explore each of the critical areas was called SOFT analysis. Humphrey and the original research team used the categories “What is good in the present is Satisfactory, good in the future is an Opportunity; bad in the present is a Fault and bad in the future is a Threat.”

In 1964 Urick and Orr at a conference changed the F to a W, and it has stuck as that, soFt to sWot

The myth of the history of SWOT – Learned, Christensen, Andrews and Guth

Some researchers reference the 1965 publication “Business Policy, Text and Cases” by Learned, Christensen, Andrews and Guth (from Harvard University). A framework is used which closely resembles a SWOT analysis. However, these words are not used, and certainly, the framework is not described as succinctly as we know it today. In this book, the terms used are:

Strengths, Weaknesses, opportunities, risks, environment & problems of other industries.

The terms SWOT or THREATS is not used – how do I know? Simple, I bought the book and checked! How many other writers on this subject have done this!

In fact, these authors reference a course note from K R Andrews:

“A Concept of Corporate Strategy” for much of the strategy framework.

On its own, it is said that a SWOT analysis is meaningless (we at RapidBI fully agree!).

It works best when part of an overall strategy or in a given context or situation. This strategy may be as simple as:

1. Goal or objective
2. SWOT analysis
3. Evaluation of measures of success strategy
4. Action

This is sometimes known as the 4As model – Aim, Assess, Activate and Apply where:

• Aim – is the Goal or objective.
• Assess – is the SWOT review itself.
• Activate – identify the strengths or measures of success and use them to advantage
• Apply – take action

 

Introduction to a SWOT analysis

The SWOT analysis is great for developing an understanding of an organization or situation and decision-making for all sorts of situations in business, organizations and individuals. The SWOT analysis approach headings provide a good framework for reviewing strategy, position and direction of a company, product, project or person (career). Doing a SWOT analysis can be very simple. However, its strengths lie in the flexibility and experienced application of a swot analysis. Remember, the SWOT capture is only part of the picture.

Applications of SWOT analysis

A SWOT analysis can be used for:

• Workshop sessions
• Brainstorm meetings
• Problem-solving
• Planning
• Product evaluation
• Competitor evaluation
• Personal Development Planning
• Decision Making (with force field analysis)

The SWOT analysis is a great tool that can be used in association with PESTLE & PRIMO-F
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Overview SWOT Matrix:

SWOT Analysis	POSITIVE/ HELPFUL in achieving the goal	NEGATIVE/ HARMFUL/ RISKS to achieving the goal
INTERNAL Origin facts/ factors of the organization	Strengths Things that are good now maintain them, build on them and use them as leverage	Weaknesses Things that are bad now, remedy, change or stop them.
EXTERNAL Origin facts/ factors of the environment in which the organization operates	Opportunities Things that are good for the future prioritize them, capture them, build on them and optimize	Threats Things that are bad for the future put in plans to manage them or counter them ©rapidbi

 

Aim of a SWOT Analysis

• Reveal your competitive advantages
• Analyze your prospects for sales, profitability and product development
• Prepare your company for problems
• Allow for the development of contingency plans.

A SWOT analysis is a process to identify where you are strong and vulnerable — where you should defend and attack. The result of the process is a ‘plan of action’ or ‘action plan’. The swot analysis can be performed on a product, a service, a company, or even an individual. Done properly, a SWOT analysis will give you the BIG PICTURE of the MOST IMPORTANT FACTORS that influence SURVIVAL and PROSPERITY. As well as a PLAN to ACT ON.

How to do a SWOT

Irrespective of whether you or your team are future planning for specific products, work, personal or any other area, the SWOT analysis process is the same.

• Step 1 of a swot analysis– Information collection – In the here and now… List all strengths that exist now. Then, in turn, list all weaknesses that exist now. Be realistic but avoid modesty!
  • You can conduct one-on-one interviews. Or get a group together to brainstorm. A bit of both is frequently best.
  • You’ll first want to prepare questions related to the specific company or product you are analyzing. You’ll find some questions and issues below to get you going.
  • When facilitating a SWOT – search for insight through intelligent questioning and probing.

• Step 2 of a swot analysis– What might be… List all opportunities that exist in the future. Opportunities are potential future strengths. Then, in turn, list all threats that exist in the future. Threats are potential future weaknesses.
• Step 3 of a swot analysis– Plan of action… Review your SWOT matrix to create an action plan to address each of the four areas.

In summary, a swot analysis:

• Strengths need to be maintained, built upon or leveraged.
• Weaknesses need to be remedied, changed or stopped.
• Opportunities need to be prioritized, captured, built on and optimized.
• Threats need to be countered or minimized, and managed.

A SWOT analysis can be very subjective, and two people rarely come-up with the same final version of a SWOT analysis. However, it is an excellent tool for looking at the negative factors first to turn them into positive factors. Use a SWOT analysis/ framework as a guide and not a prescription.

Simple rules for a successful SWOT analysis

• Be realistic about the strengths and weaknesses of your organization.
• The Analysis should distinguish between where your organization is today and where it could be in the future.
• Be specific. Avoid grey areas
• Always analyze in relation to your competition, i.e. better than or worse than your competition.
• Keep your SWOT analysis short and simple – but only as short and simple as the application or situation demands – it is about fitness for purpose.
• Avoid unnecessary complexity and over (swot) analysis.
• There is no point listing an opportunity (O) if the same opportunity is available to competitors.
• It is pointless to say you have strengths (S) if your competitors have the same.

 

What makes a SWOT analysis work?

Due to the collaborative nature of a swot analysis, your working group will need certain qualities to succeed:

• Trust – The questions that a SWOT analysis will bring up, particularly in the Weaknesses and Threats categories, may be uncomfortable. Your group must be at a point in its working relationship where weaknesses and potential threats can be faced openly and objectively.
• Ability and willingness to implement change.
• Diversity – The team conducting the SWOT analysis should be representative of your entire planning team.
• Time – Taking time to do a thorough SWOT analysis and assessment will help your group move forward in developing a workable plan.

Steps/ Process to do a SWOT

• Establish that your coalition has the necessary components to conduct a SWOT analysis (above) successfully.
• Assemble the group that will conduct the SWOT analysis
• Set up meeting times (if the SWOT analysis is not going to be completed in one sitting
• Distribute/ complete the swot analysis tool/template individually
• In the group meeting, combine individual answers. Collaborate on each category. Complete the analysis.
• Discuss how to use the information gathered from the SWOT analysis to inform your next steps.

 

Using SWOTs with an Objective or Goal

If a SWOT analysis does not start with defining a desired end state or objective, it runs the risk of being an exercise for the sake of an exercise (i.e. useless). A SWOT analysis may (should) be incorporated into a strategic planning model. If a clear objective has been identified, SWOT analysis can help in the pursuit of that objective. In this case, SWOT analysis are:

• Strengths: attributes of the organization that are helpful to achieving the objective.
• Weaknesses: attributes of the organization that are harmful to achieving the objective.
• Opportunities: external conditions that are helpful to achieving the objective.
• Threats: external conditions that are harmful to achieving the objective.

Decision-makers can then use the results from a SWOT analysis to determine whether the objective is attainable, given the resulting analysis and summary. If the objective is NOT attainable, a different objective must be selected and the process repeated.

Generating Strategies – get them USED

When the desired objective has been deemed attainable, the SWOTs are used as inputs to the creative generation of possible strategies by asking and answering each of the following four questions many times:

• How can we Use each Strength?
• How can we Stop each Weakness?
• How can we Exploit each Opportunity?
• How can we Defend against each Threat?

Ideally, a cross-functional team or a task force representing a broad range of perspectives should carry out the SWOT analysis. For example, a SWOT team may include an accountant, a salesperson, an executive manager, operational staff and an engineer,

What strengths and weaknesses are examined in a swot analysis?

The strengths and weaknesses analysis is an internal examination that focuses on your past performance, present strategy, resources and capabilities. It is based on an analysis of facts and assumptions about the company, including:

• People (Human Resources)
  • People and skills (in particular marketing, export experience)
  • Staff development
• Properties (Buildings, Equipment and other facilities)
• Processes (Such as quality, finance, M.I.S. etc.)
  • Financial resources (debt to asset ratio and personal equity)
  • Governance
  • Management/ Leadership
  • Staff Development
  • Communication
• Products (Publications etc.)
  • Sales
  • Products
  • Markets
  • Capabilities/ scalability
  • Capital structure suppliers
  • Customers (market research)
  • Intellectual property

Some organizations use the framework PRIMO-F as the structure for capturing SW factors of SWOT analysis:

• People
• Resources
• Ideas/ Innovation
• Marketing
• Operations (products, services etc.)
• Finance

In other words:

• Strengths
  • What do you do well? Is there anything you do better than most? Better than anyone else?
• Weaknesses
  • What should be improved? What do you do poorly? What should you avoid, based on mistakes in the past?

 

What opportunities and threats are examined

The opportunity and threat analysis is carried out by examining external factors in your domestic and export markets. This is usually broken down into environmental factors and competitors, including:

Environmental Factors	Competitor Factors
Demographics Economic Political/legal Sociological Environmental Technology Cultural	Capability Resources Ownership New entrants Market segments Products Prices Promotion Distribution Substitute products Suppliers customers Product life cycle Risk and cost of intellectual property violation of your product

Opportunities and threats factors of a SWOT analysis are often taken from a PESTLE analysis – also see Porters Five Forces In other words –

• Opportunities
  • Where can you find, or create, a competitive advantage?
    • What are some major trends in your business? – Consolidation / Diversification? – Specialization / Generalization? –
    • Changes in technology. Such as computer software that lets you perform services that others can not.
    • Changes in the types of businesses in your potential market, such as the demand for healthcare or telecommunications expertise.
    • Changes in social patterns, population profiles, lifestyle.
    • Changes in creative trends.
    • Changes in demand for certain types of services, perhaps related to interactive / Internet.
• Threats
  • What obstacles do you face?
  • What are your competitors doing that may result in a loss of clients, customers, market share?
  • Are the required specifications for your job, products or services changing?
  • Is changing technology threatening your position? Do you have cash-flow problems?

Examples and SWOT worksheets

Strengths and Weaknesses- Internal Factors	Opportunities and Threats- External Factors
What advantages does your company have? What do you do better than anyone else? What unique or lowest-cost resources do you have access to? What do people in your market see as your strengths? What factors mean that you “get the sale”? What could you improve? What should you avoid? What are people in your market likely to see as weaknesses? What factors lose your sales? Advantages/ Disadvantages of a proposition? Capabilities/ Gaps? Competitive advantages?USP’s (unique selling points)/ reputation? Resources, Assets, People?Experience, knowledge, data? Financial reserves, likely returns? Marketing – reach, distribution, awareness? Innovative aspects? Location and geographical? Price, value, quality? Accreditations, qualifications, certifications? Processes, systems, IT, communications? Cultural, attitudinal, behavioural? Management cover, succession? Other factors may include: Resources: financial, intellectual, location Cost advantages from proprietary know-how Creativity/ability to develop new products Valuable intangible assets: intellectual capital Competitive capabilities Big company selection.	Where are the good opportunities facing you? What are the interesting trends you are aware of? Useful opportunities can come from such things as: Changes in technology and markets on both a broad and narrow scale Changes in government policy related to your field Changes in social patterns, population profiles, lifestyle changes, etc. Local Events Market developments? Competitors’ vulnerabilities? Industry or lifestyle trends? Technology development and innovation? Global influences? New markets, vertical, horizontal? Niche target markets? Geographical, export, import? New USP’s? Tactics – surprise, major contracts, etc.? Business and product development? Information and research? Partnerships, agencies, distribution? Volumes, production, economies? Seasonal, weather, fashion influences? What obstacles do you face? What is your competition doing that you should be worried about? Are the required specifications for your job, products or services changing? Is changing technology threatening your position? Do you have bad debt or cash-flow problems? Could any of your weaknesses seriously threaten your business? Political effects? Legislative effects? Environmental effects? IT developments? Competitor intentions – various? Market demand? New technologies, services, ideas? Vital contracts and partners? Sustaining internal capabilities? Obstacles faced? Insurmountable weaknesses? Loss of key staff? Sustainable financial backing? Economy – home, abroad? Seasonality, weather effects? Other factors may include: Takeover’s Market Trends Economic condition Mergers Joint ventures Strategic alliances Expectations of stakeholders Technology Public expectations Competitors and competitive actions Poor Public Relations Development Criticism (Editorial) Global Markets Environmental conditions ©rapidbi
In the BIR, we use the following as SWot factors: PRIMO-F People Resources Innovation & Ideas Marketing Operations Finance ©rapidbi	External factors can also be listed using a PESTLE Analysis.

 

An example SWOT analysis

With the objective of: “To double the businesses turnover in the next three years.”

Internal Factors		External Factors
Strengths	Weaknesses	Opportunities	Threats
In business since 19xx. MD has xx years of experience in the industry and as head of the company. Sales and profits have grown steadily. Sales and profits were $xx million and $y00,000 in 2007. MD responds personally to all customer complaints. MD wants to get involved in marketing. “We run a tight ship”,, MD. “We have an excellent reputation for quality,” MD. “Manufactured Products,” “Modifications”, and “Repairs” have Gross Profit margins greater than 50%	Junior Manager has no experience or education for his position as Sales Manager. The marketing assistant has little marketing experience. MD says that he is not a good executive. Employees feel free to complain directly to MD. MD can’t find a good General Manager at the salary he wants to pay The company is having trouble selling Derf1 (its new product) MD is worried about converting 5,000 Derf1 into cash. Stock held increased too much during recent months with a resulting interest cost of $4,000 a month. MD can’t break the habit of getting involved in everything. The sales compensation system . . . a) Pays out too much money b) Is too complicated. c) Does not motivate sales reps to sell Derf1 Sales reps do not present Derf1 because they do not know it well. Derf1 is priced higher than competing products. The company does not appear to have historical trend data. They spent $192,000 advertising Derf1, and they have trouble selling it. There is a conflict between a Sales Manager and Marketing Manager regarding the pricing policy on Derf1.	“The opportunities (for growth) are there,” MD. Professional help is available for designing new products. Reliable manufacturers are available for producing new products. There is a market for 1500 Derf1 at $45 a unit.	Many of their industrial customers are going elsewhere for the controls. The $50,000 Derf1 designer did not do a good job. There was a business recession.

Is the defined objective attainable? Since historical and trend data are not given, it is difficult to judge whether the business can be doubled as that would require an annual growth rate of 26 per cent per year. Therefore, it would be more realistic to restate the objective: “To increase the business over the next three years.” The same SWOT analysis details apply.

More examples of and types of SWOT application

		INTERNAL
		Strengths the willingness of staff to change good location of the facility perception of the quality of services	Weaknesses staff lack of motivation small building paperwork and bureaucracy cultural differences with users
E X T E R N A L	Opportunities support of local government high felt need of users little competition internationally funded projects	SO Options training of staff in interactive techniques of quality improvement coordination with other providers to cover all user needs	WO Options remodelling of the facility with local government funds and international help
	Threats low income of users bad roads low salaries lack of budget paradigms of providers	ST Options cost recovery of products/ services with user fees payment of incentives to staff based on performance	WT Options review of procedures for decreasing costs and waiting times and increasing the perceived quality

 

Examples

You know the situation. You are asked to undertake a simple SWOT review of a department. You are given a little time and are aware of certain factors which may or may not impact you. So let’s have a look at the first initial SWOT:

A SWOT Analysis of a Human Resource function:

Strengths	Weaknesses	Opportunities	Threats
Developed techniques for dealing with major areas of HR, job evaluation, psychometric testing and basic training	Reactive rather than pro-active; needs to be asked rather than developing unsolicited ideas.	The new management team, wanting to improve overall organizational effectiveness through organizational development and cultural management programs.	HR contribution not recognized by top management who by-pass it by employing external consultants

Or from another point of view:

Strengths	Weaknesses	Opportunities	Threats
Able to react to changing conditions effectively	Reliant on specific individuals with key skills and external tools which may change without our control	To use external consultants as a channel to influence senior management.	The new management team want to make their own mark and have a history of outsourcing.

So as you can see, there is no right or wrong answer to any section, and it is down to your analysis of the situation. SWOT Analysis is more effective when undertaken as a team activity with people from varying backgrounds and experiences. The very best application is when a task team or change team is assembled to undertake the data capture and analysis. A team approach will help to ensure a balanced approach and that one aspect is not emphasized inappropriately.

Examples continued

S W O T analysis approaches can be used for:

• Business Planning
• Career Development
• Competitor Analysis
• Situational Analysis
• Strategic Planning
• Personal Development
• Managing People
• Innovation
• Problem Solving

 

Possible Strengths of a SWOT analysis

SWOT Analysis – Possible Strengths
Tangible Strengths	Intangible Strengths	Processes & Systems
Assets including plant and equipment Your business location Do you have long-term contracts? Are your product unique or market-leading? Have you got sufficient financial resources to fund any changes you would like to make? Do you have any cost advantages over your competitors? Do you use superior technology in your business? Is your business high volume? Can your scale up if you need to?	Do you have a strong, recognizable brand, or do you stock strong brands? Your reputation – are you considered a market leader? Or an expert in your field? Do you have a good relationship with your customers? (Goodwill) Do you have strong relationships with your suppliers? Do you have a positive relationship with your employees? Do you have any unique alliances with other businesses? Do you own any patents or proprietary technology? Do you have a proven advertising process that works well? Do you have more experience in your field? Are your managers highly experienced?	Do you have superior industry knowledge? Are you involved with industry associations? Is your business Innovative?
Remember – Strengths – internal to your business; characteristics or qualities of your business/ organization that make you better than your competitors. Add any additional strengths that are unique to your business.

 

Possible Weaknesses of a SWOT

SWOT Analysis – Possible Weaknesses
Tangible Weaknesses	Intangible Weaknesses	Processes & Systems
Are your plant and equipment old or outdated? Is your product line too narrow? Have you got insufficient financial resources to fund any changes you would like to make? Do you have a high overall unit cost relative to your competitors? Do you use inferior technology in your business? Do you have low volume and are restricted in your ability to scale up?	Do you have a weak or unrecognizably brand? Do you have a weak or unrecognizable image? Do you have a poor or impersonal relationship with your customers? Do you have a poor relationship with your suppliers? Do you have a poor relationship with your employees? Is your marketing failing to meet objectives? Are your managers inexperienced? Do you have low R&D?	Do you lack industry knowledge? Do you lack innovative skills?
Remember – Weaknesses – internal to your business/ organization; characteristics or qualities of the way you work make you less competitive than your competitors. Add any additional weaknesses that are unique to your business/ organization.

 

Possible Opportunities for a SWOT Analysis

SWOT Analysis – Possible Opportunities
Industry/ Sector Opportunities	External Opportunities
Expand your product line Diversify your business interests Expand into your customer’s field Expand into your supplier’s field Expand your customer base (Geographically or through new products) Do you have placid competitors? Are there any export opportunities? Will your market grow?	Changes to legislation Changes to import/export constraints Good economic outlook Favourable cultural shifts – such as to greener products Changes in the use of technology opening up opportunities for your business to utilize these technologies such as E-commerce or Internet sales
Remember – Opportunities are external to your business. They exist either within your industrial sector or outside of your sector. Add any additional opportunities that are unique to your business.

 

Possible Threats of a SWOT analysis

SWOT Analysis – Possible Threats
Industry/ Sector Opportunities	External Opportunities
Will low-cost imports impact your business? Do consumers have a choice to use a substitute product? Are substitute product sales increasing? Is your market in slow growth or decline? The growing power of customers or suppliers to set price Changing needs of buyers	Foreign exchange rate changes affecting imports/exports Changes in demographics Increasing regulation
Remember – Threats are external to your business. They exist either within your industrial sector or outside of your sector. Add any additional threats that are unique to your business.

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For clarity, we have moved our templates and worksheets to the following page – Templates.

 

Analysis Template/ Worksheet

For ease of use, our templates have now been moved to our page on SWOT analysis Templates. Many of our users have said this page was too long and could we break it up. Now we have separated off the ready to use templates from the examples and text. We hope you find this easier to navigate. go to top– Try our business analysis tool for free NOW

Example Template / Worksheet 2

For ease of use, our templates have now been moved to our page on SWOT analysis. Templates go top-. Try our business diagnostic analysis tool for free NOW.

Example Template / Worksheet 3

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Example Template / Worksheet 4 – Analysis Matrix For ease of use, our templates have now been moved to our page on Templates

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Opportunities/Threats Analysis: Our templates have now been moved to our page on SWOT analysis for ease of use. Templates go to the top-. Try our business diagnostic analysis tool for free NOW

Business and Market Segment Opportunities: Our templates have now been moved to our page on SWOT analysis for ease of use. Templates go to the top of a SWOT analysis– Try our business diagnostic analysis tool for free NOW 5 common mistakes in doing a SWOT analysis

Critical Success Factors (CSFs)

Before developing your SWOT, it is worth ensuring you are clear on the Critical Success Factors (CSF’s) for your company. Follow the link to find out more.

To S.W.O.T. or not to S.W.O.T?

Although a SWOT analysis is often promoted as a useful technique in many texts and courses, it is not universally praised: Some prefer to think of SWOT as a “Significant Waste of Time.” (Hill & Westbrook) The problem with a SWOT analysis is potentially more serious than just wasting time. Because it mixes idea generation with evaluation, it is likely to reduce the range of strategies that are considered unless managed effectively. Also, people who use a SWOT analysis might conclude that they have done an adequate planning job and ignore such sensible things as defining the firm’s objectives or calculating ROI for alternate strategies.

To be effective, A SWOT analysis should only be undertaken in the CONTEXT of the organization, its goals and market place. Several studies have looked at S W O T. These include Menon et al. (1999). The findings showed that the use of this framework harmed performance.

When Hill and Westbrook (1997) examined its use by 20 companies in the UK in 1993-94, they concluded that the process was so flawed that it was time for a “product recall.”

While there are no real ways of knowing whether a given process is robust, to throw away such a simple and effective tool is a little premature. Certainly, care needs to take into its use, and we have already seen that the more people involved in undertaking a diagnostic process, the more reliable it is likely to be.

I would say continue to use the SWOT and being aware of its strengths and limitations. Remember, it is a tool and not a robust process at the end of the day.

The five-step process of an effective SWOT analysis

One supporter asked: if not SWOT, then what? Borrowing from corporate strategic planning literature, one option for planners is to follow a formal written process to:

1. Set objectives
2. Generate alternative strategies
3. Evaluate alternative strategies
4. Monitor results, and
5. Gain commitment among the stakeholders during each step of this process (Armstrong 1982).

Evidence on the value of this (5 step process) planning process, obtained from 28 validation studies (summarized in Armstrong 1990), showed that it led to improved corporate performance. Given the evidence, a SWOT analysis should be used with care and in the CONTEXT of the organization, taking into account the organisation’s financial situation.

What is a SWOT analysis?

When undertaking a traditional strategic planning process, debating future direction, or assessing existing opportunities for the organization, a board or management team can rely on a SWOT analysis for help. During the analysis, the team lists and assesses the organization’s Strengths, Weaknesses, Opportunities, and Threats, often on a matrix. Each of these controlling forces prompts the team to consider factors that might easily be overlooked as it shapes the organisation’s future. This process provides insights into the organization’s internal and external positioning, examining internal and external elements that must be factored into future decision making. It prohibits the organization from becoming too insular and functioning without proper feedback.

When to Use The BIR:

• Conduct a review of your company
• Conduct an analysis of your product
• Conduct a review of your services
• Conduct an analysis of yourself
• Conduct analysis on your intranet site
• Conduct an analysis of your competitors
• Offer an analysis to your current clients.
• Offer an analysis to your current customers.

Note “Management tools can help better to understand particular aspects of an organization or its environment. For the following step – the analysis of insights provided by the models – however, there is no model. Management models are effective only if their users can realize connections and gaps and draw appropriate conclusions.” – Dagmar Recklies SWOT is sometimes known as a TOWS analysis or a TOWS review. Other acronyms used in the strategic planning cycle include:

• SWAN analysis (Strengths, Weaknesses, Achievements, Next step) alternatives – SW And Needs, SW Ambitions Needs, Stakeholders Wants And Needs- The SWAN model is almost as confused as the SMART model for objective setting
• SMFPHR can serve as a conceptual model: S: Strategy M: Marketing F: Finance P: Production HR: Human Resources
• ViSA (Vision, Strategy and Action plan) A SWAN analysis can be undertaken for each of these factors.
• SWOB analysis – Strengths, weaknesses, Opportunities and Barriers. Barriers in a SWOB analysis is generally the emotional or mental barriers the individual may have to success. Often used in reflective practice for CPD activities in teaching, education, nursing and healthcare.
• Kaplan and Norton (1996) – the Balanced Business Scorecard.
  • Customer Perspective
  • Financial Perspective
  • Internal Business Perspective
  • Learning and Growth Perspective
  • They elaborate on these perspectives in terms of the following key ideas:
    • Customer perspective: To achieve our vision, how should we appear to customers?
    • Financial perspective: To succeed financially, how should we appear to our shareholders?
    • Internal business process: To satisfy shareholders and customers, what business processes must we excel at?
    • Learning and growth perspective: To achieve our vision, how will we sustain our ability to change and improve?

Solow developed the SWAN model.

For a complete Internal SWot, look at our Business Improvement Review. go to top

Have you also seen our PESTLE, Need to develop CSFs? Need to write SMART objectives? or CSR (Corporate Social Responsibility) pages. Your feedback and comments are welcome.

This page has been developed by Mike Morrison – Principle consultant at RapidBI. You are free to use any of the SWOT tools on this page. However, if you wish to use this page on a website, please credit us and link, and keep all links intact. To revisit our SWOT analysis review.

This page on SWOT Analysis originally published August 2008 Reviewed March 2015 edited October 2015, Updated March 2016, April 2016, June 2018, August 2019, March 2021

SWOT Analysis

This pages covers – SWOT Analysis The complete guide to understanding your Strengths & Weaknesses, opportunities & threats, tool for strategic planning. Samples, templates,

A SWOT analysis is a planning tool used to understand the Strengths, Weaknesses, Opportunities, and Threats involved in a project or a business. It involves specifying the business’s objective or project and identifying the internal and external factors that are supportive or unfavourable to achieving that objective.