When you have a big decision to make in your business, the last thing you want to do is wing it. A SWOT analysis is a simple but powerful tool to provide structure to your decision-making and help guide you in the right direction. Developed in the 1960s at Stanford Research Institute, SWOT analysis has become one of the most widely adopted strategic planning tools worldwide — used across industries from healthcare to agriculture to technology.
Table of Contents
- What is a SWOT analysis?
- Internal factors: Strengths and Weaknesses
- External factors: Opportunities and Threats
- Benefits of doing a SWOT analysis
- When should you do a SWOT analysis?
- How to do a SWOT analysis
- Using SWOT analysis in quarterly planning
- After SWOT analysis, what next?
- Common SWOT analysis mistakes to avoid
- Frequently asked questions
What is a SWOT analysis?
What does SWOT stand for? Strengths, Weaknesses, Opportunities, and Threats. A SWOT analysis is a matrix-like tool that outlines each. Most times, a SWOT analysis is formatted in a table, like this:
| Strengths | Weaknesses |
| Opportunities | Threats |
SWOT matrix template
The SWOT matrix is grouped into two sorts of factors: internal and external.
Internal factors: Strengths and Weaknesses
Your strengths and weaknesses are already there inside of your business. This is the place to be clear-eyed about what you have and what you lack. These can include:
- Financial resources
- Physical resources
- Human resources
- Other assets
- Processes and programs
External factors: Opportunities and Threats
External factors are what help you drive a decision forward, by identifying opportunities to seize and threats to avoid. External factors include:
- Market trends
- Economic trends
- Funding
- Demographics
- Relationships and network
- Regulations
SWOT: Strengths
Strengths are favorable internal factors you should take advantage of, including:
- Differentiators
- What your company excels at
- Unique resources/assets
- Good things others say about you
- Unique selling proposition
- Values that drive you
SWOT strength examples: customer-first culture, features your competitors don’t have, strong cash flow, innovations
SWOT: Weaknesses
Weaknesses are unfavorable internal factors you should mitigate, including:
- People, resources, systems, procedures that are lacking
- Things competitors have that you don’t
- What you could improve upon
- Complaints from customers/stakeholders
SWOT weakness examples: limited cash flow, small team, reliance on old/obsolete technologies
SWOT: Opportunities
Opportunities in a SWOT analysis are favorable external factors you could take advantage of, including:
- Trends that favor you
- Changes in technology, social patterns, legislation
- Underserved markets that could be a fit for your business
- Emerging need
- Media coverage around your area of expertise
SWOT opportunity examples: your industry trending, stronger economy for investments, a new generation of consumers connecting to your offering
SWOT: Threats
Threats are unfavorable external factors you should mitigate, including:
- Where the competition outshines you
- Where weaknesses leave you more exposed to shifting tides
- Shifts in market requirements
- Evolving technology
- Changing customer attitudes toward your offer
SWOT threat examples: more well-funded competitors, downturn in market, upcoming regulation that negatively impacts operations
Benefits of doing a SWOT analysis
There are a few reasons people love using the SWOT structure for decision-making analysis.
First of all, it’s a flexible framework. You can apply a SWOT analysis to an initiative, a person, a team, a product, a strategy, or a company as a whole. You can even SWOT one of your competitors as part of a competitive analysis.
A SWOT analysis also encourages you to take a step back to look at the bigger picture and be objective in your approach. Often we can get stuck in a rut when it comes to our strategic thinking — i.e. “we’ve been doing it this way for years” or “if it’s not broken, don’t fix it.” Performing a SWOT analysis invites you to rethink the external and internal factors that should be weighing on your decision.
Putting together a SWOT table also helps you notice connections and patterns between the different parts of your analysis subject. For example, you might not often think of your internal resources as they relate to social trends, and a SWOT analysis could expose interesting connections between the two.
SWOT analyses are forward-looking, while remaining grounded in where you are today. By drawing connections across internal and external factors, as well as positives and negatives, you’re able to make better predictions about the outcomes of your decisions.
When should you do a SWOT analysis?
You might do a version of SWOT analysis with smaller decisions, but that’s likely impromptu and minimal; you don’t need to call a meeting to do a SWOT analysis on whether to stock Cool Ranch or Nacho Cheese Doritos in your snack room. (Obviously, the answer is Cool Ranch.)
For the most part, you should save your SWOTs for the bigger things in your business, like:
- Before you commit to strategic action
- When you’re evaluating your competitive position
- To guide strategic planning and goal-setting
- During annual planning sessions
- When setting quarterly Rocks and priorities
How to do a SWOT analysis
If you’ve decided something is worth a SWOT analysis, it’s worth taking the time to do it right! Just like in your business operating system, investing time in organization up front will help you get much better results down the line.
Stay organized and accountable
Designate people to lead and record the SWOT analysis. This may be two separate people, or one person if the group is small and it’s manageable. Choose the decision makers who can condense the big picture of the analysis into a strategy and action plan.
Determine your objective
It may sound fun, but don’t SWOT just to SWOT! Decide ahead of time what your objective is. It’s easier if you’re using a SWOT analysis to answer yes or no to moving forward with something, like if you’re deciding whether or not to hire someone.
Oftentimes, however, your objective will be more complicated. Imagine you’re using a SWOT analysis to decide on a marketing plan for the upcoming quarter. Decide on a clear objective and tangible outcomes, like: once we finish our SWOT analysis, we will decide which marketing channels to invest in, which products we will feature, and which customer segments we’re targeting. That doesn’t bring you to a full-blown marketing strategy, but it will get you the big picture and guidance on how to design the rest.
Gather data and people
Before you SWOT, consider the information you need. Get what you can from good internal data and human resources. Identify subject matter experts who may have great insights, even if they won’t be a part of the endgame decision-making process.
According to research on strategic planning, SWOT analysis is most effective when it includes input from a diverse group rather than just a few individuals. Having only a few people perform the assessment increases the risk of blind spots and missed insights (NCBI StatPearls).
Start brainstorming
Once you have your plan, start brainstorming. It’s a good idea to start getting every idea out there at first, and worry about refining them later.
Focus on the biggest change-makers
After you’ve gotten a good list for each quadrant of your SWOT matrix, identify the things that are most important to your objective. For example, while TikTok has been a growing advertising channel for many businesses, it’s less proven for B2B marketing, so if you’re developing a B2B marketing plan, you may omit it from your final analysis.
Develop strategy that plays to strengths and mitigates weaknesses
Once you have your streamlined SWOT analysis, it’s time for your decision-makers to develop their strategy. While they may be unpleasant to consider, naming your weaknesses is a huge help in coming up with stronger strategies. Make sure you’re accounting for them in your final decision.
Using SWOT analysis in quarterly planning
If you’re running on EOS® or another business operating system, SWOT analysis becomes even more powerful when integrated into your quarterly planning rhythm. Here’s how to connect the two:
During annual planning: Use a company-wide SWOT to inform your three-year picture and one-year plan. Your strengths and opportunities should shape your ambitious goals, while your weaknesses and threats help you anticipate obstacles.
When setting quarterly Rocks: Reference your SWOT analysis when choosing which priorities to tackle. If you’ve identified a significant weakness, creating a Rock to address it makes that weakness visible and accountable.
In weekly L10 meetings: When Issues arise, check them against your SWOT. Sometimes what feels like a new problem is actually a manifestation of a known weakness or external threat you’ve already identified.
As one business leader shared about using strategic planning tools: “What she loves about EOS® is that it is genuinely a simple, elegant, organic, living, breathing business plan that is lived every day… organizations are encouraged to evaluate their goals not just quarterly, but weekly, fostering a culture of accountability and continuous measurement against established objectives.” — Tammey Zumwalt, CEO, 31st Street Capital (31st Street Capital Case Study)
The key is treating your SWOT as a living document rather than a one-time exercise. Revisit it quarterly to see what’s changed and what new factors have emerged.
After SWOT analysis, what next?
Strategy time!
There are a couple of different ways to work with the information you’ve gathered.
Mitigate the negatives. Your internal weaknesses and external threats give you the most urgent courses of action. How can your strengths or opportunities mitigate them? Can you turn any weaknesses into opportunities? For example, if one threat is that there’s something you’re not doing that your competitors are, you also have an opportunity to start it.
Harness the positives. How can your strengths be applied to cover your weaknesses? Do more of what you’re good at. Seize opportunities. How do your strengths match up with your opportunities?
In Strety, you can complete a SWOT analysis on the company, team, and even individual level for a personal SWOT analysis. The SWOT analysis sits alongside the other business vision tools we offer — including your V/TO, Accountability Chart, and Scorecard — so they intuitively help guide your strategy.
By making your company SWOT analysis available to your team in Strety, you give your employees and stakeholders something to think about whenever they come up with a new strategy or need to make a big decision. You should always seek to overcome weaknesses and strengthen your position, and a company SWOT analysis helps you stay on top of it.
Common SWOT analysis mistakes to avoid
Even experienced teams can fall into traps when conducting a SWOT analysis. Watch out for these common pitfalls:
Making lists too long. A SWOT with 50 items in each quadrant isn’t useful — it’s overwhelming. Focus on the factors that will actually impact your decision. Aim for 5-10 items per quadrant maximum.
Being too vague. “We need to improve communication” doesn’t give you much to work with. Be specific: “Our sales and operations teams lack a shared system for tracking customer requests.” Specificity leads to actionable strategy.
Only including leadership in the analysis. Your front-line employees often have insights that executives miss. Include subject matter experts from different levels and functions for a more complete picture.
Anchoring on one quadrant. Some teams spend all their energy listing strengths (because it feels good) while glossing over weaknesses. Others fixate on threats and create analysis paralysis. Balance your attention across all four quadrants.
Treating it as a one-time exercise. Markets shift, competitors evolve, and your own capabilities change. Review and update your SWOT at least quarterly to keep it relevant.
Confusing internal and external factors. A common error is listing something like “we should expand to new markets” as an opportunity. That’s a potential strategy, not an external factor. The opportunity is “new markets are emerging in X sector.” The strategy is your response to that opportunity.
Frequently asked questions
What are the 4 parts of a SWOT analysis?
The four parts are Strengths (internal advantages), Weaknesses (internal limitations), Opportunities (external factors you can capitalize on), and Threats (external factors that could cause problems). Strengths and Weaknesses are internal to your organization, while Opportunities and Threats are external factors in your environment.
How long should a SWOT analysis take?
A focused SWOT analysis session typically takes 1-2 hours for a leadership team. However, you should spend time gathering data and input beforehand, and plan for additional time afterward to translate findings into action items. For major strategic decisions, you might spread the process across multiple sessions.
What is a personal SWOT analysis?
A personal SWOT analysis applies the same framework to an individual rather than an organization. You assess your own strengths and weaknesses (skills, experience, habits) alongside external opportunities and threats (job market, industry trends, competition). It’s useful for career planning, professional development, and preparing for performance reviews.
Who should be involved in a SWOT analysis?
Include decision-makers who will act on the findings, subject matter experts with relevant knowledge, and representatives from different functions or levels who can offer diverse perspectives. For a company-wide SWOT, this often means leadership team members. For a departmental SWOT, include team leads and key contributors.
How often should you update your SWOT analysis?
Review your SWOT at least quarterly, or whenever significant changes occur in your business or market. Many companies running on EOS® revisit their SWOT during quarterly planning sessions to ensure it reflects current reality and informs their Rock-setting process.
What’s the difference between SWOT and TOWS analysis?
TOWS is an extension of SWOT that focuses on strategy development. While SWOT identifies factors, TOWS creates strategies by matching them: SO strategies (use Strengths to capture Opportunities), WO strategies (overcome Weaknesses by pursuing Opportunities), ST strategies (use Strengths to avoid Threats), and WT strategies (minimize Weaknesses and avoid Threats).
You can get a SWOT analysis going right away with a free trial in Strety — and check out our other business operating system tools while you’re at it! For a product tour that will help you see how your business can be even more organized, book time with a Strety team member.