SWOT analyses can serve as a precursor to any sort of company action, such as exploring new initiatives, making decisions about new policies, identifying possible areas for change, or refining and redirecting efforts mid-plan. Performing a SWOT analysis is also great way to improve business operations, employee communication and morale.
SWOT Analysis can be visually illustrated any number of ways, but typically is laid out this way:
Creating an effective SWOT Analysis which can be used to drive business outcomes requires an honest review across all functions, geographies and management levels if it is to be the cornerstone from which plan improvement is judged.
The elements of a SWOT analysis
A SWOT analysis focuses on the four elements included in the acronym, allowing companies to identify the forces influencing a strategy, action or initiative. Knowing these positive and negative elements can help companies more effectively communicate what parts of a plan need to be recognized or need investment.
When drafting a SWOT analysis, individuals typically create a table split up into four columns to list each impacting element side-by-side for comparison. Strengths and weaknesses won’t typically match listed opportunities and threats, though they should correlate somewhat since they’re tied together in some way.
The first two letters in the acronym, S (strengths) and W (weaknesses), refer to internal factors, which means the resources and experience readily available to you. Examples of areas typically considered include:
The last two letters in the acronym, O (Opportunities) and T (threats), refer to external forces. External forces influence and affect every company, organization and individual. Whether these factors are connected directly or indirectly to an opportunity or threat, it is important to take note of and document each one. External factors typically reference things you or your company do not control, such as: