What is SWOT analysis? SWOT analysis definition, Benefits, Limitations, and FAQs

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SWOT analysis

What is SWOT analysis?

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. As the name suggests SWOT analysis is a technique used to identify these four aspects of any project, product, or business. 

Strengths and weaknesses are internal to your company, i.e., things that you have some control over and can change. This includes people in your team, your patents and intellectual property, and your location.

Opportunities and threats are external, i.e., things that are going on outside your company in the larger overall market. 

Opportunities can be taken advantage of; threats can be protected against, but both of these can’t essentially be changed. This can be understood as things like competitors, inflation, and customer shopping trends.

Benefits of SWOT analysis


SWOT analysis does not require any special skill-set. It can be performed by anyone with the knowledge of the business of an organization and the industry in which it operates. 
The process only involves a discussion about the four aspects of SWOT analysis. 

An individual’s thoughts and ideas are aggregated into judgments backed by the whole group. In this way, the knowledge of a single person becomes the knowledge of the group.


SWOT analysis requires neither any technical skills nor any training, therefore, a company can select any staff member from any department to conduct the analysis rather than hire a third party. 
Also, SWOT is a fairly simple method, hence can be performed in a short time.

Data Integration

SWOT analysis requires a precise combination of quantitative and qualitative information from various sources. 
It needs Access to a range of data from various sources to improve enterprise-level planning and policy-making, enhance decision-making, improve communication, and help coordinate operations.

Application Neutrality

SWOT analysis is conducted by firstly, specifying an objective and then, conducting a thorough discussion to identify all the internal and external factors that could affect the final goal’s achievement.
This approach always remains the same irrespective of whether the analysis supports strategic planning, opportunity analysis, business development, competitive analysis, or some product development processes.

Multi-Level Analysis

SWOT analysis can result in valuable information about your objective’s chances by performing an analysis of the four elements – strengths, weaknesses, opportunities, and threats either collectively or individually.

Limitations of SWOT analysis

  • SWOT promotes simplicity, which could lead to an oversimplification of an issue or problem at the highest level.
    The thing is when you simplify a concept, it becomes easier for people to approach it.
    While this is a good trait, sometimes it could lead to unintended negative outcomes as well.
  • Individuals who are involved in SWOT analysis can have their own natural biases that may be brought to the forefront.
    If people have vested interests in what is happening, there is a chance they may not apply the analysis in an objective way. These factors can harm the analysis and there could be no beneficial outcome from the practice.

How do you write a good SWOT analysis?

Assemble the right people

Gather people from different departments of your organization. You should make sure that there is representation from every department and team.

Different people within your company could have different ideas and perspectives which is critical for a successful SWOT analysis.

Explore every idea

SWOT analysis can be considered somewhat similar to a brainstorming session. Everyone should have the liberty to put forth ideas on their own.

One way to do this is to give everyone a writing pad to list down their ideas. This would eliminate the possibility of groupthink and ensure all voices are heard.

This should be followed by a vigorous discussion on every idea. A simple idea could trigger a chain of thought among people, which is the core of SWOT analysis line of thinking.

Rank the ideas

After an intense discussion of all the ideas, it is now best to rank the ideas based on what people think about them.

You could have a voting system wherein people vote for the ideas they think are in the best interest of the company. The more votes you receive, the higher the rank of your idea. Based on this voting exercise, you now have a prioritized list of ideas. 

This process can be followed for generating ideas for each of the four parts of SWOT analysis: Strengths, Weaknesses, Opportunities, and Threats.


What does SWOT stand for?

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

What are Opportunities in SWOT analysis?

Opportunities refer to favorable external factors that could give an organization a competitive advantage.

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