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.
Internal factors
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:
- Financial resources (funding, sources of income, investment opportunities)
- Physical resources (location, facilities, equipment)
- Human resources (employees, volunteers, target audiences)
- Access to natural resources, trademarks, patents and copyrights
- Current processes (employee programs, department hierarchies, software systems)
External factors
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:
- Market trends (new products and technology, shifts in audience needs)
- Economic trends (local, national and international financial trends)
- Funding (donations, legislature and other sources)
- Demographics
- Relationships with suppliers and partners
- Political, environmental and economic regulations
