A SWOT analysis is a strategic tool that businesses (and individuals) use to assess their strengths, weaknesses, opportunities, and threats. It provides valuable insights for decision-making, helping identify areas for improvement and growth. Professor Albert Humphrey developed SWOT analysis in the 1960s, and it has become a cornerstone of strategic planning across industries.
In this guide, we explore what SWOT analysis is and explain how to do one, and provide practical examples to help you do one yourself, whether you're assessing a business, your own career goals, or personal development.
SWOT stands for strengths, weaknesses, opportunities, and threats. It's a simple yet effective way to assess internal and external factors that affect your current situation. It pinpoints what's working well, where the challenges lie, and opportunities for growth. Here's a closer look at each component.
Strengths: These are the internal attributes that set you or your business apart, such as your key skills, unique resources, or elements that give you a competitive edge.
Weaknesses: These are the internal factors that can hinder your performance.
Opportunities: These are external factors that could benefit you and help you stay ahead of the competition.
Threats: These are external factors that could affect your performance or chances of success.
A SWOT analysis provides a clear and structured way to assess where you currently stand and how you can progress. It's useful for refining business strategies or planning your career path. Here's how a SWOT analysis could benefit you.
For businesses, a SWOT analysis helps identify the strengths and weaknesses of their operations, workplace culture, and team. It also sheds light on external factors, such as market conditions, competition, and industry trends.
For individuals, it helps assess skills, strengths, and career environment. It can provide a clear picture of where you stand in the job market. This comprehensive view allows you to make informed decisions about your future.
Identifying areas for improvement is one of the most valuable outcomes of a SWOT analysis. Businesses can pinpoint gaps in their operation and market strategies. Individuals can recognise the skills and experiences they require to advance their careers. By identifying these weaknesses, SWOT encourages improvement by turning challenges into opportunities for growth.
Recognising new professional opportunities such as industry trends, tech advancements, or a potential promotion allows you to plan for future success. Whether it's a gap in the market or a training course, opportunities come to the forefront with a SWOT analysis.
A SWOT analysis helps you identify potential threats before they arise. For businesses, these threats could be increasing competition, regulation changes or market downturns.
On a personal level, threats might include a lack of up-to-date skills, job market shifts, or industry disruptions. By identifying these threats early, you can prepare for them, ensuring you're ready to adapt when the situation changes.
Whether you're making long-term decisions for a company or considering your own career path, understanding your strengths, weaknesses, opportunities, and threats is essential for developing a successful plan of action. It provides the outlook you need to set achievable goals and allocate resources effectively. It also allows you to create strategies to address weaknesses and protect against external threats.
One of the most useful aspects of a SWOT analysis is that it looks at internal and external factors. This allows you to make balanced decisions that consider both what you can and can't control. For businesses, this helps align internal resources with external opportunities. For individuals, it allows you to match your existing personal strengths with emerging trends in your field.
SWOT analysis provides a broad overview of your situation, but it can also be the launch point for deeper analysis. Once you've completed your SWOT analysis, you may uncover areas that require further exploration or research. For example, if your analysis reveals a specific threat or opportunity, you may want to conduct a more detailed market analysis. You could also explore professional development courses that may help you bridge a skill gap.
Conducting a SWOT analysis requires reflection, research and strategic thinking. Here's a step-by-step guide to get started.
Before beginning the analysis for a business, gather a team of people so you can collect a range of perspectives. Assemble a diverse team from different departments (e.g., marketing, finance, operations, etc.) Each team member can provide unique insights based on their expertise and area of focus, leading to a more comprehensive analysis.
For individuals: reflect on your personal situation by considering your career, skills, and environment. If needed, seek feedback from trusted colleagues, mentors, or peers who can offer an external perspective.
Establish the specific goal of your SWOT analysis. Are you launching a new product, entering a new market, or making a career change? Having a clear, comprehensive objective will keep the analysis focused and relevant.
First, you should focus on external factors. List opportunities that could help your business grow or benefit your career. For businesses, opportunities can include market changes, new technologies, emerging trends, or shifting customer demands. For individuals, opportunities might involve new courses, networking events, or a rapidly growing job market.
Next, identify external threats that could negatively impact your business or career. Threats are factors outside your control that could challenge your success. For businesses, this can be competitors, regulatory changes, and economic changes that affect performance. For individuals, threats might include changes in the job market or challenges balancing work with home life.
Identify the strengths, capabilities, and advantages that set you apart from competitors or others in your field. As a business, this might include strong brand recognition, a loyal customer base, or a skilled workforce. For individuals, think about your unique skills, experiences, qualifications, and personal qualities. This may include being a strong communicator or having deep industry knowledge.
Next, reflect on areas where there's room for improvement. Weaknesses are the internal factors that may hinder progress. It's important to be honest and objective here.
For businesses, common weaknesses could include a lack of resources, outdated technology, or inefficient operations. For individuals, consider whether limited experience, a lack of skill in a particular area, or a small professional network could hold you back.
Once you've listed all the strengths, weaknesses, opportunities, and threats, it's time to prioritise the most important factors. Which strengths should you build on? Which weaknesses need attention first? Which opportunities should you capitalise on first, and which threats require immediate action?
If you're running a business, this could mean focusing on building stronger customer relationships or addressing weaknesses that could hinder growth. For individuals, you should prioritise areas where you can improve most effectively or where the biggest opportunities lie, such as gaining a new skill or finding a mentor.
Finally, use the insights from your SWOT analysis to create a clear action plan. This should outline specific steps you can take to address weaknesses, leverage strengths, exploit opportunities, and mitigate threats.
For businesses, an action plan might include launching a targeted marketing campaign and expanding into new markets while also investing in technology to address weaknesses. For individuals, an action plan might involve upskilling through courses, expanding your network, or preparing for industry shifts to avoid career stagnation.
Ready to create your own SWOT analysis? Here's a helpful SWOT analysis template developed by the Australian government.
Below are three detailed SWOT analysis examples for a business, a product, and an individual.
Strengths | Weaknesses | Opportunities | Threats |
High-quality coffee | Single-store model | Develop a loyalty program | Emerging competition |
Unique blends | No mobile app | Expand product offerings | Shift in consumer beverage preferences |
Attractive store design | Introduce a delivery service |
Weaknesses: The single-store model limits scalability. The lack of a mobile app restricts customer engagement and convenience.
Opportunities: Developing a loyalty program and expanding product offerings can help retain customers and increase revenue. Introducing delivery services could tap into a growing demand for convenience.
Threats: Increasing coffee prices and competition from other local shops or large chains could pressure profit margins. Additionally, a shift in consumer preferences towards different beverages could impact sales.
The coffee shop can focus on customer retention through loyalty programs and product innovation. It can address weaknesses by developing a mobile app and exploring expansion into other locations or a delivery service to meet customer needs. It can also monitor emerging competitors and diversify the product line to mitigate external threats.
Strengths | Weaknesses | Opportunities | Threats |
Cutting-edge technology | High price point | Expand into emerging markets | Competition with established brands |
Strong relationship with tech providers | Limited brand recognition | Collaborate with influencers | Rapid technological advancements |
Sleek innovative design | Uncertain software updates | Launch promotional campaigns | Economic downturn affecting consumer spending |
Strengths: The smartphone features state-of-the-art technology, including exceptional camera performance, extended battery life, and a sleek, innovative design. Additionally, strong relationships with tech providers ensure reliable supply chains.
Weaknesses: The high price point may deter some customers. Uncertainty around software updates can also impact customer satisfaction.
Opportunities: The brand could expand into emerging markets where smartphone demand is growing and partner with influencers to increase visibility.
Threats: Established competitors, rapid technological advancements, and economic downturns are significant threats. Consumer spending may decrease in uncertain economic times, which could affect sales.
The brand can use its strengths in technology and design to differentiate itself, but it should consider offering competitive pricing or financing options to address the high cost. Expanding in emerging markets and building a strong influencer-driven marketing strategy will increase brand recognition. Regular software updates will be essential for retaining customer trust.
Strengths | Weaknesses | Opportunities | Threats |
A good academic reputation | Limited professional experience | Tech skills in-demand by employers | Potential for AI automating tech-based roles |
Advanced technical skills | A small professional network | Opportunity to enter emerging industries | High competition from other graduates |
Desire to learn and grow | Uncertainty about career goals | Upcoming industry networking events | Economic downturn affecting consumer spending |
Strengths: The recent graduate has a strong academic background and up-to-date technical skills, which employers highly value. Their enthusiasm and eagerness to learn are also assets in a rapidly evolving job market.
Weaknesses: Lack of professional experience and a limited network may make it harder to find job opportunities. Uncertainty about career direction could delay decision-making.
Opportunities: The growing demand for tech-savvy professionals and opportunities for internships and networking events can open doors. Emerging industries also offer promising career paths for those willing to adapt.
Threats: High competition from other recent graduates and potential economic uncertainty may make it harder to secure a job. Automation and AI are also potential threats to entry-level roles.
The graduate should focus on gaining practical experience through internships or freelance work to build a professional portfolio. Networking through industry events and using online platforms such as SEEK will help expand connections. Continuing to upskill in emerging technologies will make them more competitive in a crowded job market.
Here are 11 top tips for a SWOT analysis that drives results.
A successful SWOT analysis requires you to be unbiased. Be realistic about your strengths and weaknesses. Avoid overestimating your strengths or downplaying weaknesses, as this can lead to misguided strategies.
Avoid vague language in your analysis. Make each point concrete and measurable, and support it with data where possible. Instead of stating, "Our marketing is effective," say, "Our recent marketing campaigns increased website traffic by 15%." This makes it easier to track progress and set clear goals.
After identifying your strengths, weaknesses, opportunities, and threats, rank them based on their significance and impact. This allows you to focus on the most critical factors.
A thorough SWOT analysis looks at both internal and external factors. Balancing these gives a more complete picture. For example, you can leverage internal strengths such as a highly skilled workforce against external threats such as economic downturns.
Involve team members from different departments or roles. By having a range of perspectives, you can uncover insights you might otherwise overlook.
For example, while the marketing team may identify strong brand recognition, the sales team may point out that customer service issues are eroding trust.
Carry out a SWOT analysis regularly to reflect changes in the business environment. A SWOT analysis from six months ago might not account for recent shifts in consumer preferences or competitor strategies.
A SWOT analysis should guide your strategy for growth. After identifying critical areas, think about what you need to do to see improvements. For example, if you identify a growing market opportunity, develop an appropriate marketing strategy to capitalise on it.
Focus on specific challenges or goals rather than trying to analyse everything at once. For instance, if you're assessing a new product line, limit your analysis to factors affecting that product rather than the entire company.
While it's important to identify all relevant factors, limit your analysis to the most impactful ones. This will help you stay focused and avoid being overwhelmed with data.
Gaining insights from external sources such as industry experts, customers, or consultants, offers a fresh viewpoint and helps to identify areas of improvement. For example, a customer survey might uncover recurring issues that were previously unnoticed or unaddressed.
Rather than just identifying weaknesses and threats, dig deeper to understand the root causes. This will help you develop effective strategies to address them. If your weakness is "slow product development," for example, explore whether it's due to resource constraints, lack of innovation, or inefficient processes.
For a SWOT analysis to be useful, there are certain pitfalls to be aware of. Here are some common SWOT mistakes to avoid.
A common mistake is using broad or unclear statements that don't provide actionable insights. For example, saying "we're competitive" is too general. Instead, identify specific factors that make you competitive, such as unique product features or strong customer relationships.
Mixing up internal factors (strengths and weaknesses) with external factors (opportunities and threats) can lead to confusion. Clearly distinguish between what your company controls (internal) and what it can't control (external).
Another mistake is failing to consider all relevant factors that could influence your analysis. For instance, you may focus on product features while neglecting customer feedback or market conditions. Gather input from multiple sources, including different departments, to ensure a comprehensive analysis.
Listing too many points without prioritising them can overwhelm your analysis and make it hard to make clear decisions. Focus on the three to five most important strengths, weaknesses, opportunities, and threats to maintain clarity and develop effective strategies.
Conducting a SWOT analysis without input from different people or departments can result in an incomplete view of the situation. Involve people from various departments and consider seeking feedback from external sources to ensure a well-rounded analysis.
A SWOT analysis can’t beeffective if you don't use the findings in decision-making. Use the insights from your SWOT analysis to inform your strategy and make decisions on priorities, resource allocation, and goals.
Analysing every market trend, competitor, or product feature can dilute your focus. Narrow your scope to specific goals that are most important. For example, if you're analysing a new product launch, focus on factors that directly impact that product's success.
Including too many factors in each quadrant can overwhelm you with information and make it difficult to prioritise. Limit your analysis to three to five key points in each quadrant. This helps you concentrate on the most important factors and ensures that your findings are actionable.
It's common to overrate your company's strengths, especially when you're emotionally invested in the business. Use objective data, customer feedback, and performance metrics to gain a realistic picture of your strengths and weaknesses.
A shallow analysis will miss crucial insights. Analyse the underlying causes of strengths, weaknesses, opportunities, and threats. Rather than just saying “competition is a threat,” explore which competitors are gaining market share and why.
Using templates and digital tools for SWOT analysis can make the process easier. These tools typically offer features that streamline collaboration, enhance data visualisation, and help teams present their findings more effectively. Here are five of our top picks.
ClickUp is a versatile project management tool that offers a template specifically designed for SWOT analysis. It allows you to categorise your strengths, weaknesses, opportunities, and threats easily.
Customisable templates for SWOT analysis
Task management and collaboration features
Real-time collaboration for team input
Integration with various other tools, such as Google Drive and Slack.
Free plan available; paid plans start at $7 USD per user/month
4.7/5 (Capterra)
Alignment is a strategic planning tool that includes a built-in SWOT analysis feature. It helps businesses align their teams around strategic objectives and outcomes.
Intuitive SWOT analysis interface
Focus on strategy alignment and goal tracking
Collaboration features for team discussions.
Free plan available; paid plans start at $65 USD per user/month with a minimum of 5 users.
4.9/5 (G2)
Visual Paradigm is a powerful visual modelling tool that offers a dedicated SWOT analysis template. It allows users to create detailed, visual representations of their SWOT analysis for better clarity and presentation.
Professional SWOT analysis templates
Diagramming tools for easy customisation
Integration with other business tools.
Free version available; paid plans start at $6 USD per month
4.5/5 (Trustpilot)
SafetyCulture offers an easy-to-use platform for creating a variety of business tools, including SWOT analysis templates. It's especially useful for teams in industries such as safety and operations.
Pre-built SWOT analysis templates
Mobile app for on-the-go access
Real-time collaboration and reporting.
Free plan available; paid plans start at $29 USD per user/month.
4.7/5 (G2)
SmartDraw is a diagramming tool that offers various templates, including those for SWOT analysis. It provides easy drag-and-drop functionality to create customized SWOT diagrams.
Hundreds of templates, including SWOT analysis
Easy-to-use interface with drag-and-drop features
Cloud integration and sharing.
Free trial available; paid plans start at $5 USD per month.
4.4/5 (Capterra)
Whether you're planning a business strategy, launching a new product, or mapping out your career path, a SWOT analysis provides insights that inform decision-making and shape long-term success. It allows you to identify the strengths, weaknesses, opportunities and threats to your objective, considering both internal elements and external forces. By applying the findings of a SWOT analysis in your future planning, you canunlock new opportunities for business or personal growth and success.
SWOT stands for strengths, weaknesses, opportunities, and threats. It's a strategic planning tool for evaluating internal and external factors that can impact an individual or organisation's success.
Albert Humphrey developed SWOT analysis at the Stanford Research Institute in the 1960s. He created it as a way for businesses to assess their internal strengths and weaknesses while identifying external opportunities and threats.
Conducting a SWOT analysis offers several key benefits:
Gaining a clear understanding of current strengths and weaknesses
Identifying new opportunities for growth or improvement
Preparing for potential threats that could impact success
Helping to inform strategic decisions, ensuring more effective and focused planning
To conduct an effective SWOT analysis, follow these steps:
Define your objective (e.g., evaluating a product, career, or business).
Gather diverse perspectives (for businesses, involve multiple team members).
List strengths, weaknesses, opportunities, and threats objectively.
Prioritise the most important factors.
Develop an action plan to capitalise on strengths, address weaknesses, exploit opportunities, and mitigate threats.
Here are three best practices to consider:
Be honest and objective when identifying strengths and weaknesses.
Involve multiple perspectives to get a broader view.
Use specific and measurable statements for clearer insights.
Here are three common mistakes to avoid:
Ignoring external perspectives, which can limit the accuracy of your analysis
Listing too many factors in each quadrant, which makes it harder to take action
Overestimating strengths or ignoring weaknesses, leading to overconfidence