SWOT Analysis Definition
Understanding the strengths and weaknesses of your business is critical, but it can be hard to know how these factors relate to your potential growth. Using a SWOT analysis makes it easy to collaborate on the strengths and weaknesses of your business, project, or idea.
A SWOT analysis is a strategic tool that allows you to diagram multiple internal and external factors. SWOT is an acronym that stands for Strengths, Weaknesses, Opportunities, and Threats. This template helps diagram the key factors to success for your business and isolates multiple internal and external factors to help accomplish this.
The SWOT analysis isolates internal and external variables, allowing you to analyze your business from multiple angles. The strengths and weaknesses sections focus on the internal elements of your business. The opportunities and threats sections highlight the external factors that might affect your business in the future. By contrasting these two variables, you can think about how to best plan for the future while optimizing success today.
Using a SWOT analysis is critical to ensure your team is communicating correctly and everyone is aware of the positioning of your business. This awareness can help mitigate risk in the future and can help your team create an effective strategy for the organization.
The SWOT template isn’t only applicable to strategic planning and can be used in a myriad of different situations. Because it primarily analyzes strengths and weaknesses, you can use it for project planning, product innovations, or considering a new business venture. All of these scenarios benefit from the SWOT analysis template if appropriately used.
The most effective way to use a SWOT analysis template is through repetition and regular analysis. Especially regarding the external factors, understanding how the environment changes is crucial to keeping an accurate and up-to-date strategy. Any time an important decision needs to get made, conducting a SWOT analysis is a beneficial exercise.
SWOT Analysis Template
Completing a SWOT analysis requires a nuanced understanding of your organization and the competitive ecosystem. To make this process easier, here are the basic steps to completing a blank SWOT analysis template.
Strengths
The first component to tackle in a SWOT analysis is the strengths portion. This is where you analyze your internal and external strengths and why they specifically benefit you.
Your organization’s strengths should come from things that are within your control that you use to leverage your advantage. This could include your internal talent, customer interactions, unique value proposition, or creative ability.
Some prompting questions might be:
- What are the things you do well?
- What are the things that make you unique?
- What do other people perceive your strengths to be?
- What is our strongest asset?
- What is our central value proposition?
- What skills and assets do we have that the competition does not?
- What things do our customers say we excel at?
Weaknesses
One of the unique benefits of the SWOT analysis template is that it focuses on your plan’s weaknesses. Without thinking about your weaknesses, you can miss some glaring errors when planning your solution. Because of this, focusing on current weaknesses helps create risk-averse solutions that are well-informed.
The weaknesses section is also focused on internal improvements rather than external factors. These things should be in your power to change and control. While this section focuses internally, consider how these weaknesses could become threats if targeted by an external source.
Thinking about areas you want to improve is a good place to start when considering potential weaknesses. If you need to overhaul something, there’s likely a weakness there that could be exposed to the customer. Additionally, it might be easiest to start from the customer’s end and address the things they’ve vocalized as the biggest weakness of your product/service.
Some prompting questions might be:
- Where could there be room for improvement?
- Where are you lacking resources?
- What do customers regularly report as an issue?
- What experience are we lacking?
- Are there any possible avenues for someone to exploit our weaknesses?
Opportunities
The opportunities section focuses externally on evaluating where you might be able to benefit in the future. These opportunities will be things that are out of your control but could benefit you as you move forward. With an ever-evolving ecosystem, it’s important to evaluate how these opportunities shift over time and require you to plan accordingly.
Because it focuses so much on the external variables surrounding your solution, many of the prompting questions in this section focus on the larger competitive ecosystem and the target market you are focusing on. With this in mind, some potential opportunities could be a competitor’s struggles, a new partnership, innovative technology for the customer, or a shift in the greater market.
Some prompting questions might be:
- Where do you see a gap in the market?
- What market trends can you take advantage of?
- How can you use your strengths to pivot into opportunities?
- How is our target market evolving, and how can we meet their needs?
- Is there a niche customer base we can succeed with?
- What are our competitor’s biggest strengths, and how can we take from them to improve our product/service?
Threats
The threats section of the SWOT analysis also takes an external approach to your strategy and considers things that are out of your control. Anything that could negatively impact your business could be viewed as a potential threat, and it’s important to analyze this landscape to understand how you can best maneuver your business to avoid risk.
If there is a potential threat you can’t avoid, it’s essential that you have a plan to combat it once it affects your business. There are always threats and risks associated with business development, and the only way to get through them is to create a plan.
Some prompting questions might be:
- What are the potential threats, and how could they harm you?
- What is your competition doing that you aren’t?
- Is our target market shrinking or moving away?
- How is the competitive ecosystem evolving?
Advantages of Using a SWOT Analysis Template
Using a SWOT analysis template helps build understanding within your organization but also helps create an actionable plan for the future. Here are some of the biggest advantages of conducting a SWOT analysis.
- It’s collaborative: Accessing a SWOT template through an online whiteboard is easy to use and can be done collaboratively with your team. Compared to conducting a traditional risk assessment or creating a strategic planning document, using a SWOT analysis template is easy, cost-efficient, and communicative.
- It’s forward-looking: By looking at external factors like opportunities and threats, the SWOT analysis template is very forward-looking. Developing a forward-facing strategy is extremely helpful in relation to your potential pitfalls. Creating an action plan for these in advance could be the difference between succeeding and struggling.
- Formalizes opportunity areas: Your competitive ecosystem can evolve fast, and it’s important you consistently conduct an opportunity analysis to make sure you’re ahead of the curve. The SWOT analysis template formalizes these opportunities each time so you can gain an accurate picture of your trajectory and what the most valuable opportunities are.
- Creates action plan: Using a SWOT analysis forces everyone to consider the internal strengths and weaknesses of the organization. This can be somewhat of a reality check at first, but it also allows everyone to create a solid action plan to capitalize on their strengths and improve their weaknesses. Communicating this information gives everyone a nuanced understanding of the organization and creates a well-informed team.
SWOT Analysis Airpods Example
In our example, we outline a SWOT template for Airpods. You can look at the potential competition for Airpods, how they have an advantage over their competition, what markets they could expand to, and where they could improve their product.
- Strengths: The strengths of AirPods are mainly their design and usability features. These features correspond well to the brand image of Apple, and people can expect this same level of sleek usability from their AirPods.
- Weaknesses: There aren’t many weaknesses for AirPods, but they have had some feedback saying they’re a bit outdated, need an update, and might not be the best value on the market.
- Opportunities: The tech market is constantly evolving, and the biggest opportunity for Apple AirPods is new technological innovations. They are always at the forefront of new tech and could benefit highly from these new opportunities.
- Threats: The threats to AirPods are slim, but with increasing technological fluency, many other companies are making a similar product at a better value. This might harm Apple’s market share in terms of AirPods.
