FAQ: What is a SWOT analysis?

What is a SWOT Analysis?

A SWOT analysis is used to evaluate the relationship between a company’s internal resources (strengths and weaknesses) and external possibilities (opportunities and threats). The SWOT analysis can be used in many areas of a company, including products, divisions, and services.

SWOT stands for:

• Strengths
• Weaknesses
• Opportunities
• Threats

What is the purpose of a SWOT Analysis

The purpose of a SWOT analysis is to provide an overview and understanding of the forces, trends, and characteristics of a particular market. SWOT analyses aid in making informed choices about what actions to take to maintain a company’s competitive advantage and increase its ability to achieve its goals and objectives.

What information is included in a SWOT Analysis?

• Strengths: factors that make a company more competitive than its rivals, and the capabilities and resources that the company can use effectively to achieve is performance objectives.
• Weaknesses: limitations, faults, or defects within the company that can prevent it from achieving its objectives.
• Opportunities: favorable current or prospective situations in the external environment (trends, changes, etc) that permit the company to enhance its competitive position.
• Threats: unfavorable situation, trend, or impending change in the external environment that currently or potentially threatens the company’s ability to compete.

After listing strategic factors in these four categories, the SWOT analysis then analyzes the factors and identifies strategic possibilities. This is done by evaluating strengths in light of opportunities, weaknesses in light of opportunities, strengths in light of threats, and weaknesses in light of threats. The result of this analysis indicates the degree of strategic change the company must make.

Where can I locate a SWOT analysis?

You can find SWOT analysis for various companies using the following databases:

• Business Search Ultimate This link opens in a new window
  • Search by company name and look under "Source Type" for "SWOT Analysis."
• Marketline This link opens in a new window
  • Quality business reports, including company profiles, market reports, industry outlooks and country economic and demographic conditions. To find SWOT Analysis, mouse over "Companies" and search within the new box. Previously called Datamonitor.
• Business Insights: Essentials This link opens in a new window
  • Search by company name; a link to the SWOT analysis will be in the left column. This database was formerly the "Business & Company Resource Center."

Check out the Company Information Guide or search for more databases on the A-Z Database List. Use the drop-down provided to narrow down the subject to "Company & Industry Information."

More Information

Here are some SWOT analyses examples:

• SWOT Analysis This link opens in a new window (includes templates) (BusinessBalls)
• Section 14. SWOT Analysis This link opens in a new window (University of Kansas)

References

Bensoussan, B. E., & Fleisher, C. S. (2008). SWOT Analysis. In, Analysis Without Paralysis: 10 Tools to Make Better Strategic Decisions. Upper Saddle River, NJ: Pearson Education.