Quick answer: What is SWOT analysis? It is a planning exercise that sorts a business into four lists: strengths, weaknesses, opportunities and threats. Strengths and weaknesses are internal; opportunities and threats come from outside. The value comes from ranking the entries into actions.
SWOT is one of several business strategy frameworks, and it is the simplest starting point for a team that has not used any of them. Use the sections below to pick the right moment, fill the template and turn the lists into a short action plan.
When SWOT is the right tool
SWOT suits a team that needs a shared, plain-language picture of where it stands before choosing a direction. It works best as a group discussion that ends in decisions, not as a document that is filed away.
- Choose SWOT when the question is broad, such as whether to enter a market, change a service or rethink priorities, and nobody has yet agreed what matters most.
- Choose something else when the issue is purely about the outside environment. A structured scan of external forces, such as the one explained in what is pestel analysis, gives more depth for the opportunities and threats boxes.
- Add a second lens when the internal side needs more depth. The resource based view is a related way to examine the resources behind your strengths and weaknesses.
The method was originally developed for business and industry, according to the University of Kansas Community Tool Box, and was later adopted for community work. The Tool Box also describes a TOWS matrix adapted from Fred David’s Strategic Management text, which is the step that links the four lists to strategies.
Strengths, weaknesses, opportunities and threats at a glance
SWOT stands for Strengths, Weaknesses, Opportunities, Threats. The table shows what each part means and what to do with it once it is written down.
| Component | Internal or external | What it means | Planning use |
|---|---|---|---|
| Strengths | Internal | Things the business does well that separate it from competitors | Protect them and build plans on them |
| Weaknesses | Internal | Areas that may stop the business exploiting opportunities | Fix or work around them before chasing the related opportunity |
| Opportunities | External | Openings in the industry environment that can make the business more profitable | Rank them and match each to a strength |
| Threats | External | Uncontrollable factors, including anything that can negatively affect the business | Cannot be controlled, so plan a response and watch for change |
The definitions follow Miro’s SWOT guide, and the external focus on competition, the market and changing trends follows ProductPlan’s glossary.
Internal and external factors
The internal and external split decides which box an entry belongs in, and it is where most sorting disputes start. Ask one question: could the business change this itself?
Internal: strengths and weaknesses
Strengths and weaknesses are internal factors that affect how well a business can exploit opportunities. The Community Tool Box says internal factors include resources and experiences, such as staff, funding and past experience. If the item sits within your own team, budget or know-how, it belongs on the left of the grid.
External: opportunities and threats
Opportunities and threats are external. ProductPlan describes them as relating to competition, the market or changing trends. The Tool Box lists forces a group does not control: trends, the economy, funding, demographics, legislation and events.
The same development can sit on either side of the line. The Tool Box notes that threats can become opportunities, and the reverse. A new regulation, for example, may hurt a business that cannot adapt and help one that can, so write down how it affects your business rather than the bare event.
SWOT analysis template
A SWOT matrix is, in ProductPlan’s words, a simple, two-by-two grid with four labelled boxes. Copy the layout below into a spreadsheet, a document or a whiteboard and replace the prompts with your own entries.
| Quadrant | Prompt to ask | Your entries |
|---|---|---|
| Strengths (internal) | What do we do well that competitors do not? What resources or experience do we have? | … |
| Weaknesses (internal) | Where do we fall short of competitors? What might stop us taking an opening? | … |
| Opportunities (external) | What in our market, customer base or industry could make us more profitable? | … |
| Threats (external) | What outside factors that we cannot control could hurt us? | … |
The grid format follows ProductPlan’s description of the SWOT matrix, and the internal and external prompts follow the Community Tool Box.
A spreadsheet suits a team that works remotely or wants to sort and score entries later. Paper or a whiteboard suits a short in-person session where speed of contribution matters more than tidy records.
How to run a SWOT analysis step by step
Run the exercise as a short workshop with a clear sequence. Each step below has a checkpoint so the session does not stall on opinions.
- Gather the right people. ProductPlan calls SWOT a team undertaking that should involve the right people, including sales and support. Asana puts the sweet spot for a productive brainstorming session at around 10 teammates.
- Draw the grid. Use the template above and label all four boxes before anyone starts writing.
- Fill the internal boxes first. List strengths and weaknesses from staff, funding and experience. Checkpoint: each entry should be something the business could change or build on.
- Fill the external boxes. List opportunities and threats from the market, competition, the economy, demographics, legislation and events. Checkpoint: each entry should be something the business cannot control.
- Challenge the entries. Miro warns that an internal analysis sees every aspect through the lens of your company, and that engaging multiple stakeholders helps overcome personal perceptions. Invite outside views, such as customers or staff from other teams, to test the list.
Turning four lists into ranked actions
A finished grid is only a set of observations. The step that makes SWOT useful is deciding which entries deserve effort first.
Rate and rank
Asana suggests discussing each idea and rating it on a scale of one to 10. Treat the score as a way to start the argument, not as a result. If two items score alike, the discussion about which one fits current strengths is usually the more useful output.
Act fast on what is easy to change
Asana also advises taking immediate action on anything that can be changed within 24 hours. Weaknesses that sit entirely inside the business, and that need no budget, are the usual candidates. Quick fixes build trust in the exercise, which makes the harder decisions easier to reach.
Pair the lists to form strategies
The TOWS matrix pairs the lists to produce strategies. Its opportunity-strength pairing uses strengths to take advantage of opportunities. Start there: for each highly rated opportunity, name the strength that makes it realistic. An opportunity with no matching strength becomes either a weakness to fix or an item to drop.
SWOT analysis for small business
A small business can run SWOT with a handful of people, or even with one owner and a notepad. The limits are time and objectivity, not size, so keep the session short and the entries specific.
Example entries
Specific entries with a benchmark beat vague praise. Asana gives the example of customer service with an NPS of 90, compared to competitors’ average NPS of 70, which can be checked and defended. For a weakness, it gives low website visibility caused by a lack of marketing budget. That entry names both the problem and its cause, which makes the next action obvious.
For opportunities and threats, use the external prompts from the template. Name the trend, local competitor change, funding shift or rule change, and say what it means for your business.
Making it work with few people
- Bring in another view. An owner working alone sees the business through their own lens, so ask a trusted employee or customer to challenge the list.
- Keep it to one decision. Run a SWOT for a single question, such as a new product or location, rather than the whole business.
- Finish with owners. Give each top-rated action one named person, so it does not stay on the whiteboard.
Common SWOT mistakes and how to fix them
Most weak SWOT exercises fail in a few predictable ways. Each has a direct remedy.
- Biased entries. A single viewpoint colours every item. Miro recommends engaging multiple stakeholders to overcome personal perceptions, so add voices from other roles or from outside the company.
- Entries in the wrong box. A change in the market is not a strength or weakness, and a skill gap is not a threat. Re-sort anything that fails the could-we-change-it test described earlier.
- Vague statements. “Good service” cannot be ranked or acted on. Rewrite it with a measure, as in the NPS example, or with a cause, as in the website visibility example.
- Stopping at the lists. A grid with no ratings, pairings or owners is a record, not a plan. Finish with the ranking and strategy steps above.
- Working alone. ProductPlan treats SWOT as a team undertaking, and a one-person list tends to miss customer-facing knowledge.
Frequently asked questions
Can SWOT be used once a project has already started?
Yes. The Community Tool Box says a SWOT analysis can offer helpful perspectives at any stage of an effort, which includes exploring options and adjusting plans already under way.
Who usually completes a SWOT analysis inside a company?
Miro notes that the marketing department is often in charge of completing it and presenting the results to senior management. Even then, input from sales, support and other teams improves the quality of the entries.
Should every strength line up with an opportunity?
No. The Community Tool Box says not to be surprised if strengths and weaknesses do not precisely match up with opportunities and threats. Treat a gap as a prompt to refine the analysis, not as an error.
Is a SWOT template the same as the full analysis?
No. The template is only the grid. The analysis is the discussion that fills it, tests the entries for bias and ends with ranked actions and named owners.
