What is a SWOT analysis?

A SWOT analysis is a strategic planning tool used to identify and evaluate the internal and external factors that can impact an organization. The acronym stands for strengths, weaknesses, opportunities, and threats.

In this context, strengths and weaknesses are internal factors that pertain to the organization itself. Strengths might include resources, capabilities, or advantages that give the organization a competitive edge. Weaknesses are areas where the organization may be lacking or where it could improve. On the other hand, opportunities and threats are external factors. Opportunities can include favorable market trends, new technologies, or changes in legislation that the organization can capitalize on. Threats might involve competition, market downturns, or other external challenges.

This structured analysis helps organizations develop strategies that leverage their strengths and opportunities while addressing weaknesses and threats. By clearly laying out these four dimensions, decision-makers can formulate effective action plans, leading to better strategic alignment and enhanced performance. The SWOT framework is widely applicable across various sectors, ensuring that organizations can align their objectives with both internal competencies and external market conditions.