What is a SWOT Analysis?
If you want to thrive in a competitive marketplace, you have to assess the condition of your business, inside and out. Internally, you have to understand what you’re doing well, and where you could improve. Externally, you have to consider where to take your business next, and predict emerging market challenges you’ll likely face.
Attaining this information may seem like a tall order, especially if you’re a small business owner or work as a marketer for a smaller company, but it doesn’t need to be complicated. To start, all you need is a pen and paper.
What Is a SWOT Analysis?
A SWOT analysis is the process of uncovering and examining different aspects of your business, and organizing your discoveries into a simple 2X2 grid template. Each quadrant of the grid corresponds to one letter of the acronym SWOT. The acronym stands for strengths, weaknesses, opportunities, and threats.
Here’s a breakdown of what each word means in the context of a SWOT analysis:
Strengths: Strengths are things your business is already doing well, the unique resources your team possesses, or any competitive advantages you have. Strengths are internal factors, so you can build on them and use them to your advantage.
Weaknesses: Weaknesses are areas where your business could improve, where resources are needed, or areas where your competitors are surpassing you. Weaknesses are also internal factors, so you can often address and overcome them.
Opportunities: Opportunities are areas you can take advantage of now. These could be new resources available to you, emerging trends you could lean into, or any strengths you’ve yet to adopt into your strategy. Like threats, opportunities are external factors because they’re beyond your control.
Threats: Threats are anything that could negatively impact your business from the outside or any obstacles your business currently faces. You can usually get a sense of your business’s threats or competition when you run a market analysis. As an external factor, threats are often beyond your control.
Since the information is presented in an easy-to-read grid, SWOT analyses are quick and straightforward assessments. And Once everything is organized, the condition of your business is easier to assess.
When Should I Do a SWOT Analysis?
There’s no right or wrong time to do a SWOT analysis. There are, however, times when a SWOT analysis can be particularly useful.
Here are 4 times when it’s a good idea to look inward and outward:
When internal business conditions change—Maybe you’ve got a new CEO, your business is scaling rapidly, or departments are being restructured. A SWOT analysis can provide insights that can help with transitions and adjustments.
When external market conditions change—New competitors, shifting economic conditions, regulations, and other shifts in the marketplace can leave businesses in need of reflection. A SWOT analysis can help keep you on your toes and ready to address incoming challenges.
Before strategic planning—Strategic planning often involves new initiatives and changes in resource allocation. Before beginning the planning process, it helps to know the current condition of your business or team so you can make forward-looking decisions.
On a scheduled basis—While most companies do strategic planning every few years, it won’t hurt to do a SWOT analysis on a more regular basis. A quick SWOT analysis on a quarterly or semi-annual basis will provide information you can use in the short term, and bring to the strategic planning process when it’s time.
Now that we’ve described what a SWOT analysis is and when you might want to do one, let’s look deeper at the process of creating a SWOT analysis by focusing on each quadrant.
How to Complete the 4 Sections of Your SWOT Matrix
One of the true benefits of a SWOT analysis is that it’s easy to conduct. All you really need is a way to write down ideas and a willingness to look squarely at your business.
While you can conduct a SWOT analysis on your own, it helps to bring other people to the table. Brainstorming with others can help identify things you might have otherwise missed and clarify ideas that aren’t fully formed.
The “S” in SWOT stands for strengths
The strength quadrant of your SWOT analysis will include things your business or team is doing well. Remember, strengths are internal, so you’ll need to look inward to discover them. It’s also important to hold onto the idea that strengths are things you have control over, so you can build on them later.
Questions to ask to uncover strengths:
What do we do well?
What have our customers or partners told us they like about us?
In what areas do we outpace our competitors?
What’s unique about our business, products, or services?
What assets do we own? (Intellectual property, proprietary technology, capitol)
SWOT analysis strengths examples:
We have excellent customer support
We offer features no other company offers
Our website traffic is higher than 75% of our competitors
We’re getting great engagement with our social media marketing campaigns
The “W” in SWOT stands for weaknesses
The weaknesses quadrant of your analysis will include areas where your business or team needs improvement. Like strengths, the weaknesses section requires you to look inward. And no matter what you uncover, don’t despair! Weaknesses are things you often have control over and can improve.
Questions to ask to uncover weaknesses:
What can we improve?
What are our customers or partners dissatisfied with?
Where do we fall behind our competitors?
Where are we lacking in knowledge or resources?
SWOT analysis weaknesses examples:
Our processes are inefficient.
Our customers find our product difficult to use.
Our organic traffic is lower than our competitors.
We don’t have the resources to expand.
The “O” in SWOT stands for opportunities
The opportunities quadrant will include strategies or resources you can currently use as a business. Opportunities are not controllable by you, as they are external to your business. Knowing where the opportunities are, however, allows you to move toward them.
Questions to ask to uncover opportunities:
What emerging trends can we take advantage of?
Which of our strengths might be valuable to potential partners?
What adjacent markets might we tap into?
Are there geographic locations with less competition?
Can we share our story or successes with the world?
SWOT analysis opportunity examples:
Customers want a product similar to ours. Can we adapt to meet the need?
Our service/product fills a void they may want to fill in their company.
Nobody sells our product in Canada. Can we expand?
We just hit a major milestone. Can we get some positive press?
The “T” in SWOT stands for threats
The threats section of your SWOT analysis will include potential issues or challenges you could face as a business. Again, threats are external factors, so they’re things happening outside of your business. They aren’t controllable, but you can actively plan for them.
Questions to ask to uncover threats:
What is our competition doing?
How could our weaknesses leave us vulnerable?
What market trends are we unprepared for?
What economic or political issues could impact our business?
SWOT analysis threats examples:
Our main competitor is launching a product with similar features
Congress is discussing a bill that would impact our business
The economy is struggling to adapt to new conditions under Covid 19
We don’t have the marketing budget to compete with our competitors
3 real-world SWOT examples
Now that we’ve covered the basics, let’s look at some SWOT analysis real life examples. We’ll cover 3 areas in business where a SWOT analysis can be helpful:
Marketing
Ecommerce
Market conditions
Marketing SWOT Analysis Example
In marketing, a SWOT analysis is often a standard part of a strategy review or competitive analysis. It can help you understand where your marketing strategy is strong or weak, and how you can out-market your competitors. You may want to consider things like:
Current and past marketing campaigns
Customer recognition and sentiment
Your website, landing pages, and social media
Ecommerce SWOT Analysis Example
When it comes to Ecommerce, it’s all about products and sales. An Ecommerce SWOT analysis can be especially useful when you’re launching new products or experiencing rapid growth. You may want to consider things like:
Delivery time
Product range
Website performance
Checkout process
Market Conditions SWOT Analysis Example
Changing market conditions can lead to precarious situations for any businesses. A SWOT analysis focused on your place in the market can help you stay aware of your position and ready for your competitors' moves. You may want to consider things like:
Year-over-year growth
Market share
Geographic impact
Customer demographics
Using a TOWS Analysis for Actionable Insights
Once you’ve brainstormed strengths, weaknesses, opportunities, and threats, and written all of your ideas into your 2X2 SWOT template, the question becomes: What do I do with this information?
While SWOT analyses are a great way to understand your business, they don’t necessarily lead to actionable strategies you can use to move forward. This is where a TOWS analysis comes in handy.
As an expansion of the SWOT analysis, a TOWS analysis allows you to see the relationship between internal and external factors, and strategize based on these insights for better business outcomes.
For your TOWS analysis, you’ll need to expand your 2X2 SWOT matrix with four additional boxes, and label them:
Strengths/Opportunities—Ideas for using your strengths to seize opportunities.
Strengths/Threats—Ideas for using your strengths to overcome threats.
Weaknesses/Opportunities—Ideas for minimizing your weaknesses by taking advantage of opportunities.
Weaknesses/Threats—Ideas for avoiding your weaknesses while minimizing threats.
By deepening your original SWOT analysis with a TOWS analysis, and looking at the relationships between the quadrants, you’ll discover strategies for moving forward.
Businesses that thrive are both inward and outward looking. They take time for self-reflection, while also studying their environment. Before you can get where you want to go, you have to understand your position, and The SWOT analysis process provides a clear path for this kind of holistic understanding.
Once you’ve assessed your position, you can employ the TOWS process to figure out how to move forward. By cross referencing the different points found on your SWOT analysis, the TOWS analysis provides insights on powerful strategies for realizing your goals. There are also many other options as well, such as the “pest analysis”, which can illuminate additional insights.
Taken together, these tools provide a powerful process for looking inward, outward, and toward the future.
