How to Complete a SWOT Analysis

What is a SWOT analysis?

SWOT stands for strengths, weaknesses, opportunities, and threats. It's used for business strategy planning, taking into account both internal and external factors that can be used in your business planning and goal-setting process.

Strengths and weaknesses are internal factors that you have direct control over. In contrast, external factors are your opportunities and threats, which you'll find with some market research, ultimately comparing your business to others in your industry.

SWOT analyses help you identify areas of improvement for the business that are critical to your success and can help you gain a competitive advantage. You can use a SWOT analysis for the entire business or more specific projects.

For example, your marketing team might do a SWOT analysis of your email marketing strategy, comparing its strengths and weaknesses and looking to see how the competition does things differently. You can even do a personal SWOT analysis on yourself to set goals for yourself as a business leader.

When using a SWOT analysis to identify key areas of the business as a whole, they're used to help business leaders identify growth opportunities and track benchmarks. Every SWOT analysis consists of four components, which are typically laid out in a grid format.

The four components of every SWOT analysis are:

Strengths

Your organization's strengths are the things that you excel at. If you're doing a SWOT analysis of your marketing strategy, your strengths might be things like consistent branding or a strong mission statement.

However, if you're looking at organization-wide strengths, they might be things like strong brand recognition or a good reputation. Your strengths should separate you from your competition, identifying what you do better than anyone.

Weaknesses

Your weaknesses identify areas of the business that need improvement. These are the things you don't excel at and prevent you from reaching your small business goals. Your weaknesses could be anything from a high employee turnover rate to debt or lack of funding.

Opportunities

Opportunities are one of the external factors of a SWOT analysis that refer to opportunities you have to improve your business and give it a competitive edge. A new business model or a new stream of revenue are both examples of opportunities.

On a more granular level, if you're doing a SWOT analysis of your marketing strategy, opportunities might be things like digital ads or different strategies you haven't leveraged in the past.

Threats

Threats are another external factor that typically involves your competition. When you perform competitive research, you can find out what your competitors are doing that may make customers or clients want to use their products and services over yours.

Threats can also be other external factors like the seasonality of your business, weather, or rising production costs.

When to conduct a SWOT analysis

You can conduct a SWOT analysis at any point to identify these key areas of your business. However, you should always use analysis before making a decision on something that can affect the business.

Examples of when you'd use a SWOT analysis include:

• Considering new initiatives
• Trying a new stream of revenue
• Changing the business model
• Changing internal policies
• Considering new opportunities
• Forming new partnerships with other companies
• Company acquisitions
• Changing strategies in different departments of the business

SWOT analyses are used to help you make better decisions while understanding critical information and data about your business. Doing a SWOT analysis on a quarterly basis can help you identify new opportunities, threats, and even weaknesses as your business evolves.

Importance of SWOT analysis

A SWOT analysis is important for every business because it can help you solve major challenges and answer important questions, making decision-making easier for leaders. Benefits of a good SWOT analysis include:

Visualizing complex problems

A SWOT analysis can help you visualize complex problems, breaking them up into smaller pieces to make them more manageable. Most organizations use data tracking to learn about operations, customers, and internal and external factors that affect their bottom lines.

However, with so much data available, it can become overwhelming trying to understand and utilize it effectively. A SWOT analysis can help take that data and use it to formulate relevant considerations, breaking down data and complex ideas into easy-to-read and understandable bullet points on a diagram.

Considers external factors

Most companies focus on analyzing internal factors, or the factors they have the most control over. However, when you're only looking at your strengths and weaknesses, you're missing out on everything going on in the industry. If you're not performing a competitor analysis on a regular basis, you might not know what your competition is doing to earn your customers.

Can be applied to any business or strategy

A SWOT analysis has many applications. It can be applied to any business in any industry, ranging from major corporations to small e-commerce companies. They can also be used across departments and strategies.

For example, you can do a SWOT analysis of your overarching digital marketing strategy or pinpoint different strategies to analyze and perform an SEO SWOT analysis, email marketing SWOT analysis, and even a social media SWOT analysis.

Easy to prepare

SWOT analyses are easy to prepare for almost anyone in the organization, but the person making it should have valuable insight into the business.

If you're doing a SWOT of your business operations, the operations manager, CEO, or other leaders who know what's happening in that part of the business are best suited for the task. Meanwhile, if you're doing a human resources (HR) SWOT, you'd want it done by the HR manager.

Ultimately, many different staff members can contribute to a SWOT, depending on what you plan on using it for. Since they're fairly straightforward, it won't take much explanation for each team member to do their part.

Improved communication

SWOT analyses can improve communication throughout organizations. For example, the business owner might think everything is going well in a department because they don't communicate with them often. Unfortunately, leaders, executives, business owners, and stakeholders can't be everywhere at once.

However, a SWOT analysis might highlight issues the owner didn't know about because they don't have the time to manage them. The more decision-makers know about different parts of the business, including its strengths, weaknesses, opportunities, and threats, the better decisions they can make for the good of the business.

How to conduct a SWOT analysis

Conducting a SWOT analysis is easy, and anyone can do it. First, you should start by formatting your analysis by breaking it up into four sections, with the internal factors—including strengths and weaknesses—on top and external factors—such as opportunities and threats—on the bottom.

The goal is to make your SWOT as easy to read as it is to create, so you'll only need bullet points and don't have to explain everything in great detail.

Once your SWOT is complete, you'll have a clear view of internal and external factors affecting your potential growth, allowing you to brainstorm solutions to different problems. The basic steps for conducting a SWOT analysis are as follows:

1. Put a team together

When conducting a company-wide SWOT analysis, you'll need a diverse team from different areas of the business for a comprehensive overview of the business. For example, you'll need a representative from HR, operations, marketing, and so on. Every department should have a voice in the SWOT to give you a clear picture of your business.

2. Set a goal for your SWOT analysis

Every SWOT analysis needs a clear goal. Why are you conducting a SWOT in the first place? For example, you can aim to learn more about your business or decide if you should merge with another business. Remember, SWOTs should be done before you make any major decisions regarding your business, so any opportunity you have may require a thorough analysis.

3. Make a list of strengths, weaknesses, opportunities, and threats

Internal factors are the company's strengths and weaknesses. Identifying those will be easiest. When identifying strengths, consider what you're doing well, including your strongest assets and areas where you excel. For example, a marketing agency might excel at branding.

For your weaknesses, you'll need to consider the aspects of the business where you fall short. For example, you can list products that don't sell well or areas of the business that detract from your goals, such as high employee turnover.

Your opportunities and threats may be more difficult to distinguish because you don't think about them daily. Consider things happening outside your company that are just as important as your strengths and weaknesses because they affect you.

For example, changes to customer demand, access to materials, and your competitors getting more funding could affect your business even though they're not happening directly to you or as a result of something you've done.

When considering your opportunities, you'll need to think about things that can help improve your business. For example, if you have access to an investor, an opportunity could be to secure more funding. When considering your threats, you should look at your competition and factors beyond your control. For example, a threat to a Christmas tree business would be seasonality.

4. Refine, organize, and prioritize the ideas in each category

Once you've identified the internal and external factors of your SWOT analysis, you can start refining and organizing the ideas in each category on your template.

Prioritize what's most important to you, the items on your list that you'd want to tackle first. However, you should also consider items that can be done easily instead of putting them off to form an action plan for more important business initiatives.

5. Create an action plan to address SWOT analysis priorities

After prioritizing your SWOT findings, you can start to brainstorm action plans to align your business goals with your strengths, weaknesses, opportunities, and threats. Take each item out of the SWOT and begin creating strategies.

For example, if you're trying to decide whether you need to hire more employees, you can look at weaknesses, such as high employee turnover, and try to find a way to reduce your turnover rate through effective HR strategies.

When you're done with your SWOT analysis and have a strategy in place to address priorities, you can revisit your analysis on a quarterly, monthly, or bi-annual basis to determine whether or not you're hitting your goals.

SWOT analysis template

SWOT analysis example

The process might seem intimidating or even daunting if you've never conducted a SWOT analysis. In this case, looking at SWOT analysis examples might help. Let's use a company everyone around the globe has heard of – Netflix. Here's our SWOT analysis of Netflix:

Internal strengths:

• Brand recognition: Netflix is a household name, and many people have subscriptions or know people who do. Their company frequently comes up in the news and in popular media.
• Revenue growth: Netflix isn't a new company, but it's continued to experience growth since its inception, taking advantage of opportunities like switching from a DVD rental business to a streaming service.
• Affordable pricing: Netflix is less expensive than cable and has transparent pricing plans.

Internal weaknesses:

• Limited copyrights: While Netflix creates some of its own programming and movies, they don't own most of the content available on the streaming service. After the rights expire, the content may be viewable on competitive streaming platforms like Hulu or HBO Max.
• Rising prices: Netflix was once considered an affordable option to many who wanted to make the switch from cable. However, as Netflix continues to increase its price, it may lose customers to more affordable streaming services.

External opportunities:

• Ad-based streaming: Many Netflix competitors, including Hulu, have a lower-priced plan, leveraging ads to increase their revenue while providing customers with affordable options.
• Original content: Netflix's original content could help increase revenue while avoiding the pitfalls of limited copyrights.
• Reduce costs: Netflix can reduce costs to bring back customers who have left the streaming service due to rising prices.

External threats:

• Competition: Netflix's biggest threat is the growing competition in the streaming services industry, with Hulu, HBO Max, Showtime, and many more channels entering the market.
• Piracy: Many people still have access to pirated media that allow them to download content for free.
• Account sharing: Customers sharing accounts potentially limits revenue.

Common SWOT analysis mistakes to avoid

Even with a well-structured SWOT analysis chart and clear methodology, many businesses fall into common traps that can undermine the effectiveness of their strategic planning efforts.

Whether you're using a horizontal SWOT analysis template or a traditional SWOT matrix, avoiding these pitfalls is crucial for generating actionable insights.

A SWOT analysis focusing on specific, measurable factors rather than broad generalizations will yield much better results for your business strategy. Understanding these common mistakes can help you conduct a more thorough analysis that properly accounts for market trends, emerging competitors, and other critical factors that impact your business success.

Being too vague or generic

One of the most frequent mistakes in SWOT analysis is listing vague strengths like "good customer service" or "quality products" without providing specific details or measurable data. These generic statements don't offer actionable insights or help differentiate your business from competitors.

Instead of writing "strong brand," specify what makes your brand strong, such as "95% brand recognition among target demographic" or "award-winning customer loyalty program with 40% repeat purchase rate."

The same principle applies to weaknesses, opportunities, and threats. Generic entries make it impossible to create targeted strategies or measure progress effectively.

Overlooking external factors

Many organizations become too internally focused during their SWOT analysis, spending excessive time on strengths and weaknesses while neglecting opportunities and threats.

This internal bias can cause businesses to miss critical market shifts, regulatory changes, or competitive moves that could significantly impact their success.

Companies often fail to research emerging competitors, changing consumer preferences, or technological disruptions that could threaten their market position. A comprehensive SWOT analysis requires dedicated time for market research, competitor analysis, and industry trend evaluation to ensure external factors receive proper attention and consideration.

Failing to take action on findings

The most critical mistake is treating the SWOT analysis as a one-time exercise rather than a foundation for strategic action. Many businesses invest time creating detailed SWOT analyses but then file them away without developing concrete action plans or implementation strategies.

A SWOT analysis only becomes valuable when insights are translated into specific initiatives, timelines, and accountability measures. Organizations should assign owners to each identified item, set deadlines for addressing weaknesses and threats, and create measurable goals for leveraging strengths and opportunities.

Without follow-through, even the most thorough SWOT analysis becomes nothing more than an academic exercise.

How to use your SWOT analysis to make strategic decisions

A SWOT analysis becomes truly valuable when it transforms from a simple strategic planning tool into actionable business intelligence that drives decision-making. An effective SWOT analysis should serve as the foundation for developing comprehensive strategies that address your company's weaknesses while capitalizing on market opportunities.

The key to maximizing your SWOT template lies in asking the right swot analysis questions during your brainstorming session and connecting findings to concrete business outcomes.

Whether you're pursuing personal and professional growth or expanding into emerging markets, your SWOT diagram should guide every major strategic decision through systematic evaluation and implementation.

Turning insights into opportunities

Once you've completed your SWOT analysis, the next crucial step is converting identified insights into actionable opportunities that drive business growth. Examine how your strengths can be leveraged to address market gaps or capitalize on emerging trends you've identified through market research.

For instance, if your analysis reveals strong internal processes as a strength and identifies emerging markets as an opportunity, develop strategies to export your operational excellence to new geographic regions.

Cross-reference your findings with complementary analysis tools like pest analysis to ensure your strategic opportunities account for broader environmental factors. This strategic tool approach helps transform static observations into dynamic business initiatives.

Aligning SWOT results with business goals

Your SWOT analysis should directly inform and align with your existing business objectives and long-term strategic vision. Review each element of your analysis against current company goals to identify synergies and potential conflicts that need resolution.

If your business goals include revenue growth but your SWOT analysis reveals significant weaknesses in customer retention, prioritize addressing those internal deficiencies before pursuing aggressive expansion strategies.

Create specific metrics and key performance indicators that connect SWOT findings to measurable business outcomes, ensuring every strategic decision can be tracked and evaluated. This alignment process ensures your analysis drives focused action rather than scattered efforts across multiple unrelated initiatives.

Reassessing regularly for continuous improvement

Strategic environments change rapidly, making regular SWOT reassessment essential for maintaining competitive advantage and strategic relevance. Schedule quarterly or bi-annual reviews to update your analysis, incorporating new market intelligence, competitive developments, and internal organizational changes.

During each reassessment, evaluate the effectiveness of previously implemented strategies and adjust your approach based on actual results versus projected outcomes. This continuous improvement cycle ensures your SWOT analysis remains a living document that evolves with your business environment rather than becoming an outdated snapshot.

Regular updates also help identify emerging patterns and trends that might not be apparent in single-point-in-time analyses.

Final notes

A SWOT analysis can help you make better decisions when it comes to your business and its growth potential. Analyzing your strengths, weaknesses, opportunities, and threats is an effective way to measure your business, set goals, and make important decisions that can affect your organizational health.

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Key Takeaways

• SWOT analysis evaluates your business's internal strengths and weaknesses alongside opportunities and threats to guide decision-making and identify growth opportunities.
• Conduct a SWOT analysis before major business decisions like launching new initiatives, changing business models, forming partnerships, or entering new markets to ensure a comprehensive evaluation of all factors.
• Avoid common mistakes such as being too vague with findings, overlooking external market factors, and failing to create actionable plans from your analysis results.
• Transform insights into strategic action by aligning SWOT findings with business goals, developing specific implementation plans, and regularly reassessing your analysis to maintain a competitive advantage.

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