Benefits of SWOT Analysis + Free Template (2024)

SWOT Analysis overview

A SWOT Analysis helps you to discover the internal strengths and weaknesses of your organization. It also helps you to discover the external opportunities and threats that confront you. As such, it's an invaluable tool for performing both internal and external Strategic Analysis. Read our comprehensive guide of how to use the SWOT Analysis template and download the template for free!!

Benefits of SWOT Analysis + Free Template (1)

Benefits of SWOT Analysis

A SWOT Analysis gives you a balanced view of yourself and the world in which you operate. It's also one of the easiest bits of Strategic Analysis that you can perform and is a great way to get people thinking strategically without getting into the full detail of Strategy Formulation.

Completing a SWOT Analysis should help you with things like:

  • Understanding your competitive advantages & disadvantages
  • Finding things to improve about your organization
  • Understanding why some aspects of your organization are struggling
  • Gaining insight on competitor activity
  • Prioritizing actions

A SWOT Analysis is also a very useful framework for getting your team on the same page when it comes to the current state of the business, and where you want to go next (and can also be a useful addition to your Strategy Evaluation process if you're looking at refining your direction). It's a simple, jargon-free way of thinking about strategic planning.

Strengths

Let's start with strengths. Understanding your strengths is crucial to deciding which opportunities you want to exploit in the future. Strengths could be tangible external elements such as well-regarded product lines, or less tangible elements such as a highly-skilled workforce in certain areas. Use the following list to help you understand your strengths as part of your SWOT Analysis:

  • What is your organization famous for?
  • What qualities do you or your products have that set you apart from competitors?
  • What physical assets do you have which might put you ahead of the competition?
  • What intellectual property do you own?
  • What internal resources (such as staff) do you have that you're particularly proud of?

Weaknesses

On the inverse, let's now look at your weaknesses. Weaknesses are a critical part of SWOT for the same reasons that strengths are. Understanding your weaknesses helps you to prioritize what to work on next, and what opportunities you are most likely to succeed with.

To help you understand your weaknesses, consider the following:

  • What major failures have you had in the past 12 months, and why?
  • What physical resources do you lack?
  • What internal / skill-based resources do you lack?
  • What do your competitors do better than you?
  • How would people rate your products? What issues would they raise?
  • How is your cash-flow position?

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Opportunities

The opportunities element of a SWOT Analysis is where you start to shift your gaze away from your own company and to the market as a whole. Understanding the opportunities that exist for you is now useful as you have a sense of your strengths and weaknesses, making those opportunities easier to assess.

Whilst the majority of the opportunities that you identify will be external, there may also be internal opportunities that are even easier to take advantage of. Consider things like:

  • Are you missing opportunities to make additional revenue from existing leads or customers?
  • Are there any countries or markets that you could enter with your existing products with little effort?
  • Are there any markets with a poor competitor showing that you could take advantage of?
  • Are there any emerging trends that you could take advantage of?
  • What new product ideas do you have?
  • Are there any merger or acquisition opportunities that make sense to exploit?

Threats

Threats are the final part of a SWOT Analysis, and require you to consider what elements pose risk to either your organization or any of your revenue streams. This could be a mix of both internal and external threats.

There are several differences between a threat and a weakness, but if you're struggling to classify things, think of weaknesses as 'things that have already happened' and threats as 'things that have not yet happened, but could'.

When thinking about threats, consider elements such as:

  • The emergence of new competitors
  • Shifts in trends that could affect demand for your product or service
  • Changes to the regulatory environment
  • Poor public relations or market perception
  • Staff morale or the possible loss of key people in your team
  • Reduced investor appetite
  • Macro-economic issues

Advantages of SWOT Analysis

Now that you have an understanding of the key elements of a SWOT Analysis, conducting one is relatively simple. Grab a pen and paper (or whiteboard marker) and gather your team, then work through each of the four quadrants above and list out everything you can think of.

Remember to include both internal and external factors for each quadrant - though you'll likely find that strengths and weaknesses tend to be more internal, whilst opportunities and threats tend to be more external.

Ensure that you take this opportunity to involve as many people from your leadership team as possible in the process of conducting your SWOT Analysis.

This is a great way to drive engagement, and given that a SWOT Analysis is often a precursor to a new strategic plan, it's a great way to get buy-in to the process!

We've compiled 8 of the best tool you can use in your strategic analysis in this guide!

Benefits of SWOT Analysis + Free Template (3)

Benefits of SWOT Analysis + Free Template (2024)

FAQs

What are the benefits of using a SWOT analysis? ›

A SWOT analysis serves as a solid foundation for strategic planning and decision-making processes. This process allows businesses to set realistic objectives, allocate resources effectively, and determine the most suitable course of action for their long-term success.

What is the benefit of conducting a SWOT analysis as part of a strategic planning process? ›

SWOT analysis is an important part of strategic planning as it helps businesses identify areas for improvement and growth. By understanding their strengths, weaknesses, opportunities, and threats, businesses can make informed decisions and develop action plans to address identified issues.

What are the benefits of self SWOT analysis? ›

What makes SWOT especially powerful is that, with a little thought, it can help you uncover opportunities that you would not otherwise have spotted. And by understanding your weaknesses, you can manage and eliminate threats that might otherwise hurt your ability to move forward.

What are the major benefits to a SWOT analysis that we discussed in class? ›

Question: The major benefits to a S.W.O.T Analysis, that we discussed in class, are: Simple to use. Reduces the costs of strategic planning. Flexible. Integrates and synthesizes diverse information.

What are the pros and cons of using SWOT analysis? ›

Here are some pros and cons of using the SWOT analysis:
  • Describes the weaknesses of the business. ...
  • Enables better planning. ...
  • Benefits any business or professional. ...
  • Simplifies the business analysis process. ...
  • Allows the company to discover opportunities. ...
  • Ensures the company controls threats. ...
  • Oversimplifies the analysis process.
Mar 21, 2023

What are the three purposes of a SWOT analysis? ›

Some of the objectives of SWOT analysis:

To make a summary analysis of external and internal factors. To identify key items for the management of the organization, which involves establishing priorities for action. To prepare strategic options: risks and problems to solve.

What are the benefits of a situational SWOT analysis as a planning tool? ›

A SWOT analysis will position you to seize opportunities and prepare effective strategies. Getting a clear and realistic view of your internal environment will help you identify ways to better satisfy clients, achieve your objectives and strengthen weaker areas that have an impact on your performance.

What are 4 examples of opportunities? ›

What are some examples of opportunities?
  • Get help on projects.
  • Propose working groups.
  • Get testers for new ideas or products.
  • Create a team to work on an idea you have.
  • Share your expertise or best practices in a particular field.

What is the benefit of conducting a SWOT analysis as part of a strategic planning process and how a SWOT analysis is conducted ›

SWOT Analysis is a tool that can help you to analyze what your company does best now, and to devise a successful strategy for the future. SWOT can also uncover areas of the business that are holding you back, or that your competitors could exploit if you don't protect yourself.

What is the purpose of a SWOT analysis in a business planning process? ›

A SWOT analysis is a strategic planning tool used to assess the strengths, weaknesses, opportunities and threats of your business. Developing a SWOT analysis can help you look at your business in a new way and from different directions. It can also help you to: create or fine tune your business strategy.

What is the benefits of strategic planning using SWOT and PEST analysis? ›

Overall, strategic planning using SWOT and PEST analysis helps businesses adapt to changes in the environment, optimize their resources, and enhance their competitive advantage.

How would SWOT analysis strengthen the strategic management process? ›

By conducting a SWOT analysis, businesses can make informed decisions about their strategic initiatives. By focusing their resources on areas with the greatest potential for growth and competitive advantage, businesses can increase their profitability, market share, and long-term success.

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