Whether you’re starting a new project, evaluating the state of your business, or trying to decide how viable a new product might be, here’s a remarkably simple yet powerful tool that can help you move forward: SWOT analysis.
SWOT is a strategic planning method structured on four elements of concern — strengths, weaknesses, opportunities, and threats. SWOT can be terrific tool for strategic planning, and it helps to better manage the future of a product or organization. It’s often used by product owners, marketing managers, and business analysts, but may be undertaken by entrepreneurs and other business decision-makers as well. A SWOT analysis can benefit a business at any stage, and its popularity has driven its use to noncommercial organizations, industries, and even entire countries.
A SWOT analysis is often created during a strategic planning session as the result of brainstorming exercises. It can be constructed quickly and the results are usually broad and simplistic, but they can help jumpstart discussions of strategic priorities.
Considering Internal and External Factors
A SWOT analysis includes factors both internal to the company and outside in the greater environment. Strengths and weaknesses are internal. They are the things the organization does — or doesn’t — do well. Recent research has shown that these are the most important factors, and they’re within the organization’s control. For instance, when performing a SWOT analysis on a company, the internal factors may include the organization’s people and culture, client and vendor relationships, physical plant and equipment, financial assets, manufacturing prowess, intellectual property, marketing capabilities, and beyond.
Opportunities and threats are external factors. These are the forces that are outside the organization, but could still have a significant impact on the ability to reach the stated objective. For a company, these may include competitors and vendors, technology, macroeconomic trends, government policy and regulations, changing demographics, and more.
How SWOT Analysis Works
SWOT analyses have emerged as a valuable approach because they’re fast, flexible, and give a quick overview of the company’s situation. The method works like this:
- Clearly state your objective.
- Identify strengths — things you do well that may help reach the objective.
- Identify weaknesses — areas that need improvement and may hinder you.
- Identify opportunities — places ripe for growth or advantage moving forward.
- Identify threats — competitors or conditions that could harm your efforts.
- Recognize relationships between the identified elements.
- Prune and prioritize to those topics you can focus on to drive change going forward.
The elements proposed in a SWOT may be wide ranging, yet the analysis must be realistic and rigorous. SWOT is a strategic tool. It is about planning for the future, so focus on things that could actually impact reaching the stated objective.
Threat of new upstart competitor? Yes.
Threat of zombie apocalypse? Not so much.
A SWOT analysis can help reveal issues and determine whether the desired objective is feasible in the operating environment. SWOT results can be simply listed or shown in a series of columns. However, the most common representation is a matrix like, this:
|Positive characteristics, tangible or intangible, that will help your efforts. These are things that are going well! e.g., Proprietary technology; brand equity||Negative attributes that may detract from your ability to execute. These are things that could be improved. e.g., Lack of experienced UX designers; dependance on a single supplier|
|Conditions or elements in the environment that can be exploited to help grow. These outside forces may be a benefit. e.g., Market growth in India; possible strategic alliance with Google||Outside forces that might cause problems and hinder progress. These may require contingency plans. e.g., Entry of Amazon into related industry; proposed legislation to restrict distribution|
A SWOT analysis can be used early in a strategic planning session as a conversation starter to surface issues like market positioning or technology changes. Or, it can be taken deep and used as a more comprehensive study.
As a planning tool, SWOT analysis can utilized at many levels. It can be used to:
- evaluate a product,
- appraise a line of business,
- assess a team, or
- analyze an entire organization.
SWOT Analysis at General Assembly
At General Assembly, students learn about SWOT analysis in our User Experience Design Immersive in the unit on business analysis. It’s also covered in our part-time Product Management course, as it’s key in understanding the path to product-market fit. Students are taught to be aware of the competition and what they are doing, but to not let that be the only determinant of what your product should be. They must also appreciate the assets they have to leverage and how it all fits together.
Meet Our Expert
Jason Reynolds teaches the User Experience Design Immersive program and related workshops at General Assembly’s Boston campus. He is passionate about user experience and process improvement and is excited to share his knowledge and experiences with others — especially those new to the field of UX.
“Thoughtful product design is essential. It’s no longer enough to bring a functional product to market. Companies must differentiate on UX and customers want delightful experiences. It’s a great time to be in UX!”
– Jason Reynolds, User Experience Design Immersive Instructor, GA Boston