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SWOT Analysis

How to do a SWOT Analysis.

What is a Swot Analysis?

SWOT is a tool for strategic analysis. It is used to analyze a company and the environment in which it operates.

SWOT stands for Strengths, Weaknesses, Opportunties, and Threats.

Information in a SWOT analysis is organized into internal and external factors:

  1. An examination of the strengths and weaknesses of a company.  This is an internal look at company operations used to identify what the company does well and where it needs to improve. It focuses on the current situation.
  2. An examination of the external environment in which the company operates. This means identifying industry trends and outside forces that could pose Threats or provide Opportunities for the company.  It focuses on the future.

From The New Penguin Business Dictionary

The acronym for the components of a situation analysis (‘audit’) in marketing and business strategy: strengths, weaknesses, opportunities and threats. It is a very simple and, hence, useful framework for analysing the environment in which a firm is operating. Opportunities and threats are usually found in the external environment, whereas strengths and weaknesses usually exist within the firm. A meaningful SWOT analysis needs to involve far more than merely listing of factors. It is necessary to examine each one in depth to see what needs to be done in practical terms to deal with each factor. Above all, it is necessary to place all the factors under each heading in some order of priority. This will focus attention on the most important issues in each area. The weaknesses of the analysis include the time and cost of collecting accurate information and, potentially, the enormous list of factors.
 Copyright © Evan Davies, Graham Bannock, Mark Uncles, Paul Trot, 2003.

SWOT analysis. (2003). In G. Bannock (Ed.), The new Penguin business dictionary. London, UK: Penguin. Retrieved from 

A SWOT analysis will answer these questions:

  • What are the internal strengths and weakness of your company?
  • What are the external opportunities and threats in your industry and its environment?
  • Can any weaknesses be converted to strengths? Any threats into opportunities?
  • How can your company take advantage of strengths and opportunites?
  • What strategic changes can your company implement as a result of the SWOT analysis?