SWOT is a strategic analysing framework used to summarise pivotal events associated with the competition of an organisation or a project as well as its business or execution circumstances in (also can be applied for personnel analysis). The company/project board or management team can employ SWOT analysis to recognise the capabilities and identify valuable information to draw an overall view of its strategic position. Then, potential risks and strategies during accomplishing objectives could be explored accordingly, with a focus on leveraging strengths and opportunities to overcome weaknesses and threats.
The acronym represents four perspectives that are divided into two major categories: internal and external. The internal group consists of strengths (S) and weaknesses ( W ), which indicates the situations of applying readily available resources and experience of the company or project for achieving the objectives. The factors may include all of the 4Ps (Product, Price, Place, Promotion) as well as personnel, finance, manufacturing capabilities, and so forth. There is one reasonable classification of these factors introduced by Business News Daily as follows:
- Financial resources (funding, sources of income and investment opportunities)
- Physical resources (location, facilities and equipment)
- Human resources (employees, volunteers and target audiences)
- Access to natural resources, trademarks, patents and copyrights
- Current processes (employee programs, department hierarchies and software systems)
The external group also covers both positive and negative perspectives that are opportunities and threats. By contrast, the issues in the external group are comparatively uncontrollable for a company or project. Due to the factors external to organisations or projects, such as macroeconomic matters, technological development, legislation sociocultural changes and changes in the marketplace, the opportunities (O) and threats (T) that impact the process of achieving objectives directly or indirectly would emerge. Business News Daily also provides a classified result of them.
- Market trends (new products, technology advancements and shifts in audience needs)
- Economic trends (local, national and international financial trends)
- Funding (donations, legislature and other sources)
- Relationships with suppliers and partners
- Political, environmental and economic regulations
Furthermore, a variant of SWOT, TOWS Matrix can be employed to explore relevant strategic options of identified risks that an organisation or a project could pursue. Jim Woodruff (2019) has explained the differences between SWOT and TOWS. And there is an example of TWOS application presented by Oxford College of Marketing.
Apart from using for risk analysis, a kind of Business Planning Checklist containing key activities that need to be performed when preparing a formal business plan can be generated. The task in the template is a specific activity for dealing with different types of issues that have been identified by SWOT analysis.