How to do a SWOT Analysis For a Business

Have you ever wondered what’s enabling your competitors to achieve such impressive results? Do you sometimes feel there’s something stopping your business from reaching that success spot?

The truth is that there’s a powerful and insightful tool that costs nothing, yet can help you gain an overview of your company and improve your performance – the SWOT analysis.

Below, we explain everything you need to know about SWOT and show you how to do a SWOT analysis for a business.

What is a SWOT analysis?

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. In essence, the SWOT analysis represents a strategic planning technique that enables business owners to assess these four lenses.

A SWOT analysis helps pinpoint areas that you can improve in your own business to grow profits and gain a larger market share. It can also show you potential negative factors that could be compromising your success.

However, it’s important to note that SWOT analyses are not limited to business goals. As an individual, you can create your own SWOT analysis to plan your career path and personal development. While a personal SWOT analysis differs from a business one in terms of objectives, the execution is very similar. 

But why is a SWOT analysis important?

Overall, a SWOT analysis covers key factors that influence your entire business. 

As a result, it can help you make informed decisions and evaluations on:

• Business planning;
• Market position;
• Building a strong brand recognition;
• Projected business performance, and others.

In most cases, the SWOT analysis is utilised at the organisation level to identify how well the business is aligned with its growth and success benchmarks. It often acts as a powerful planning tool that can help you develop strategies in any business environment.

When to Perform a SWOT analysis

Using SWOT analysis makes sense in a range of different situations and occasions. In short, it’s a good idea to create and analyse your comprehensive SWOT analysis if you’re uncertain about a business decision that you need to make.

Use a SWOT analysis if you’re:

• Considering launching a new product line;
• Thinking of changing your business model;
• Weighting the pros and cons of partnering with other companies (like a marketing agency, a new supplier, or others);
• Planning to change strategies in different departments of the business (for example, your marketing team, sales team, or accounts team);
• Exploring new opportunities for growth;
• Eyeing new company acquisitions, etc.

In some cases, SWOT analysis is conducted at the very start of the business. However, investing time into this strategic planning tool on a regular basis can help you achieve and maintain your competitive advantage. 

A good SWOT analysis can add extra value to workshop sessions, problem-solving meetings, planning get-togethers, and more. 

SWOT analysis factors

Before we can get to the actual components of a SWOT analysis, it’s important to point out that it consists of both internal and external factors. 

Here’s what you need to know about each.

Internal

Internal factors, as the term suggests, are related to your business’s internal processes. 

These are characteristics, assets, and resources in your company that have a direct impact on your performance. All of the internal factors of your SWOT analysis will be under the control of your company – you can influence them at any time.

On a SWOT analysis, there are two components that fall under the internal factors category – strengths and weaknesses. 

For example, internal strengths could include a loyal customer base, technical expertise, outstanding human resources and a talented workforce, strong brand reputation, and more. 

On the other hand, internal weaknesses could be insufficient financial resources, inadequate processes, or poor skillset.

External

At the same time, there are a range of different external factors affecting your business performance. Every external factor is part of the external environment and is therefore outside of your control as an organisation. They are usually a reflection of the market climate and the general business environment. 

In a SWOT analysis, external factors are outlined in the opportunities and threats sections.

Examples of external opportunities include emerging markets, shifts in consumer trends, industry gaps that you could fill, and more.

Meanwhile, external threats could be emerging competitors, unfavourable changes in consumer behaviour, poor customer demand as a result of economic instability, and others. 

The good news is that by conducting your SWOT analysis, you can successfully turn weaknesses into strengths and threats into opportunities. 

Understanding the SWOT Framework

Wondering how to do a SWOT analysis for your organisation? To be able to conduct a SWOT analysis like a pro, you’ll need to understand its framework in detail.

As noted above, this planning tool consists of four key pillars – Strengths, Weaknesses, Opportunities, and Threats. A SWOT matrix represents a 2×2 grid, where each of the four pillars contains one square that encompasses all its points. 

Let’s look at each pillar individually and see what type of information it offers.

Strengths

In essence, your SWOT strengths are your competitive advantages as a business. 

Your organisation’s strengths can include a strong brand reputation, high-quality products that stand out from the rest, excellent customer service, or highly skilled employees who are no match to others in the market.

To identify strengths, think of all that your company does well and how it differentiates from competitors. 

Here are a few useful questions you can ask yourself to determine your business strengths:

• What makes your customers choose your business over others?
• Are there any areas where you stand apart from competitors (production, packaging, delivery, customer service, sustainability)?
• What are some of your brand attributes?
• What’s your unique selling proposition?
• What are some of the best skills or traits that your team has?
• What resources do you have available that others in your space don’t?

These questions can help you think in the right direction and uncover strengths even in situations where you feel like there are none.

Make a list of your answers in your strengths SWOT box and don’t limit yourself to these questions. Don’t forget that a strength is only classified as such if it’s unique to your business. If all other competitors in your market offer the same aspects, they won’t be categorised as strengths. 

Weaknesses

Next, take the time to identify weaknesses within your organisation.

A company’s weaknesses are inherent characteristics of your company. To identify them, analyse your resources, staff, systems, and procedures. Find gaps that you could fill and improve on in the future and consider all that you should avoid to boost your performance.

When noting down your weaknesses, it’s best to focus on what others have to say about you. If possible, conduct a quick customer survey or monitor what your clients are saying on social media and across other channels. 

Some of the core questions to ask yourself when it comes to SWOT weaknesses are:

• What do customers complain about in negative customer reviews?
• If you have high product return rates, why?
• What areas can you improve on?
• What are some of your negative brand attributes?
• What’s stopping you from achieving your sales targets?
• Are there any resources or assets that your competitors have and you don’t?

For most businesses, identifying SWOT weaknesses is not among the most pleasant journeys. However, make sure you’re honest with yourself and observe the situation realistically.

Opportunities

Next, to seize opportunities, you’ll need to be aware of them in the first place.

SWOT opportunities are all about the chances to make something positive happen or take advantage of an opening that will lead to optimisation and success.

In most cases, opportunities are related to things that are external to your company and are likely to take place in the future. They could be tied to technological innovations, economic shifts, and other external factors. When creating your SWOT opportunities, focus on things that you can utilise instantly. 

Some of the questions to ask yourself include:

• Are there any technological advancements coming up that can reshape the way you do business?
• Are there any advertising channels that you can capitalise on better?
• Are there any tools or resources that you could start using better?
• Can you engage your brand advocates even more to promote your products and services?

These are just a few examples that you can use when creating your SWOT analysis. Note that some opportunities can be entirely based on your strengths and weaknesses. 

Threats

Finally, the threats section of your SWOT is designed to help you identify potential threats from the external environment early on. 

For example, some risks could include supply-chain disruptions, new practices introduced by a key competitor, shifts in market trends, or low-skilled recruits. 

Address some of the challenges you encounter when trying to position your products or services on the market. Think about licences, standards, safety policies, or other aspects that could potentially slow down or disturb your business operations. 

When examining the potential threats to your business, think about how your organisation can respond to these specifically. For example, you may be in debt or might be experiencing cash-flow problems, meaning that even the slightest changes in your industry can cause significant damage.

Ideally, the goal of this section is to help you eliminate threats by turning them into opportunities. 

Tips for effective SWOT analysis

Now that we’ve covered the basics of conducting a SWOT analysis, we can offer some practical and easy-to-follow tips for getting the most out of it.

Needless to say, to be able to craft a bullet-proof business strategy from your SWOT analysis, you’ll need strategic thinking, research, and planning.

Overall, SWOT analysis conducting can become much easier and result-guaranteed if you follow these recommendations:

• Keep it short and simple – describing all of your strengths, weaknesses, opportunities, and threats can become messy, lengthy, and hard to follow. Be as short as possible but at the same time, make sure you’re not skipping essential information.
• Acknowledge different viewpoints – remember that oftentimes, the way you see your business will be completely different from the way your partners or customers see it. Make sure you seek feedback and find out how others are perceiving your organisation.
• Be broad and narrow at the same time – oftentimes, business owners are tempted to focus an entire SWOT analysis on a specific issue. While this may be of some use, don’t narrow your analysis to a single point. Instead, think of broad topics that drive business change.
• Make your SWOT analysis useful by connecting it to your business plan – while a SWOT analysis is a great mental exercise, it’s meant to stimulate change and improvement too. To achieve this, link your findings to your business plan and make corrections where necessary. 

If you’ve been postponing your SWOT analysis because you’ve felt uncertain about the process, you’re now ready. Simply follow these tips and tricks and perform a SWOT analysis that will shape your drive change. 

SWOT analysis examples to consider in the United Kingdom

One of the best ways to gain an in-depth idea of how to do a SWOT analysis is to look at a SWOT analysis example.

Tesla

Let’s explore an example SWOT analysis for Tesla – the world’s most popular electric car manufacturer, with a strong presence in the UK.

Here are a few examples of what their Strengths, Weaknesses, Opportunities, and Threats can look like:

• Strengths – powerful brand recognition, advanced battery technology, reliable Supercharger network;
• Weaknesses – production capacity limitations, inability to meet demand, quality control challenges, high price; 
• Opportunities – a growing demand for electric cars in the UK, abilities to tap into other related fields, like energy storage, and solar power; 
• Threats – high competition from traditional car manufacturers that have started looking into electric vehicle technology, economic downturns, and supply chain disruptions. 

Apple

Another interesting example of a SWOT analysis is that of Apple – a leading global technological company that specialises in the production of innovative computers, smartphones, and more.

• Strengths – strong brand recognition, innovation, ease of use;
• Weaknesses – lack of affordability, closed ecosystems, low experimentation;
• Opportunities – new product lines, technological evolution, multiple distribution options;
• Threats – aggressive competition, legal conflicts, data privacy issues.

These points can be further developed into meaningful explanations and sentences. However, they can also be kept as short as simple to offer value at a single glance.

Starbucks

The third and final example worth exploring is that of Starbucks – a preferred and loved coffee company:

• Strengths – amazing brand recognition, recognisable chain, quality and unique product offering;
• Weaknesses – high prices, easy to imitate, lack of cultural diversity for consumers in specific parts of the world;
• Opportunities – product diversification for various cultures, market expansion, technological innovation can make distribution easier and more affordable;
• Threats – more affordable competitors, independent coffee houses, imitation.

These examples can help you uncover the strengths, weaknesses, opportunities, and threats that are specific to your business.

Conclusion 

Conducting a SWOT analysis is a powerful way to gain a granular view of your business. At the same time, it’s an effective method for also achieving a bird’s eye view that will help you make steps towards the right direction.

Now that you have all of this information at your fingertips, you’re ready to take the next step and create your own SWOT analysis. 

Frequently Asked Questions

How often should a SWOT analysis be conducted?

A SWOT analysis should be conducted regularly, at least once a year, or whenever there are significant changes in the business environment. This ensures that your strategy stays relevant and aligned with market conditions.

Are there any templates for a SWOT analysis?

Yes, you can find a free SWOT analysis template online. Although this is a great starting point for you to get an idea of what to include, we recommend only relying on the visual representation of the analysis and fully personalising the rest based on your business.

How is a SWOT analysis different from a PEST analysis?

While a SWOT analysis focuses on internal and external factors affecting a company, a PEST analysis looks specifically at external macro-environmental factors: Political, Economic, Social, and Technological. Both can be used together to get a comprehensive view of business challenges and opportunities.