The SWOT Analysis looks at a company’s Strengths, Weaknesses, Opportunities and Threats. It assesses the internal environment (a company’s strengths and weaknesses) which a company operates in, as well as its external influences (opportunities and threats).

A company strengths and weaknesses can include such things as:

    product/service it produces
    staff, skills and experience
    location
    customer base
    finances
    reputation
    systems and processes
    infrastructure

The strengths and weaknesses analysis calls upon a company to take an honest look at itself to define what it is really good at and where it needs help.

Looking at the external environment, a company can think about:

    industry trends
    social and demographic changes
    competitors
    currency and interest rate movements
    changes in government policy
    natural disasters, war, disease

The external environment presents issues that the company may not be able to control, but can seek to influence.

It is best for a company to make a list under the various headings addressing each of the areas.  Once this has been done, the company can begin the analysis process.  This includes:

Strengths – what are the company’s core competencies or the things that the company is really good at

Weaknesses – where are there major issues in the company, what is critical to address, how can the company overcome the weaknesses

Opportunities – where do the best opportunities lie, what should the priorities be, how can they be captured

Threats – how these can be mitigated

Issues analysis – what are the key issues that come out of the analysis, what constraints are there, how can these be overcome. 

The SWOT analysis will help inform the rest of the strategy development.  Issues raised in the SWOT should also be incorporated into the final Action Plan.