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SWOT analysis: What it is and how to use it (with examples)

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A SWOT analysis helps you identify strengths, weaknesses, opportunities, and threats for a specific project or your overall business plan. It’s used for strategic planning and to stay ahead of market trends. Below, we describe each part of the SWOT framework and show you how to conduct your own.

Whether you’re looking for external opportunities or internal strengths, we’ll walk you through how to perform your own SWOT analysis with helpful examples along the way. 

What is a SWOT analysis?

A SWOT analysis is a technique used to identify strengths, weaknesses, opportunities, and threats for your business or even a specific project. It’s most widely used by organizations—from small businesses and non-profits to large enterprises—but a SWOT analysis can be used for personal purposes as well. 

While simple, a SWOT analysis is a powerful tool for helping you identify competitive opportunities for improvement. It helps you improve your team and business while staying ahead of market trends.

What does SWOT stand for?

SWOT is an acronym that stands for: 


Strengths, weaknesses, opportunities, and threats

When analyzed together, the SWOT framework can paint a larger picture of where you are and how to get to the next step. Let’s dive a little deeper into each of these terms and how they can help identify areas of improvement. 

Strengths in SWOT refer to internal initiatives that are performing well. Examining these areas helps you understand what’s already working. You can then use the techniques that you know work—your strengths—in other areas that might need additional support, like improving your team’s efficiency . 

When looking into the strengths of your organization, ask yourself the following questions:

What do we do well? Or, even better: What do we do best?

What’s unique about our organization?

What does our target audience like about our organization?

Which categories or features beat out our competitors?

 Example SWOT strength:

Customer service: Our world-class customer service has an NPS score of 90 as compared to our competitors, who average an NPS score of 70.

Weaknesses in SWOT refer to internal initiatives that are underperforming. It’s a good idea to analyze your strengths before your weaknesses in order to create the baseline of success and failure. Identifying internal weaknesses provides a starting point for improving those projects.

Identify the company’s weaknesses by asking:

Which initiatives are underperforming and why?

What can be improved?

What resources could improve our performance?

How do we rank against our competitors?

Example SWOT weakness:

E-commerce visibility: Our website visibility is low because of a lack of marketing budget , leading to a decrease in mobile app transactions.

Opportunities in SWOT result from your existing strengths and weaknesses, along with any external initiatives that will put you in a stronger competitive position. These could be anything from weaknesses that you’d like to improve or areas that weren’t identified in the first two phases of your analysis. 

Since there are multiple ways to come up with opportunities, it’s helpful to consider these questions before getting started:

What resources can we use to improve weaknesses?

Are there market gaps in our services?

What are our business goals for the year?

What do your competitors offer?

Example SWOT opportunities:

  Marketing campaign: To improve brand visibility, we’ll run ad campaigns on YouTube, Facebook, and Instagram.

Threats in SWOT are areas with the potential to cause problems. Different from weaknesses, threats are external and ‌out of your control. This can include anything from a global pandemic to a change in the competitive landscape. 

Here are a few questions to ask yourself to identify external threats:

What changes in the industry are cause for concern?

What new market trends are on the horizon?

Where are our competitors outperforming us?

Example SWOT threats:

New competitor: With a new e-commerce competitor set to launch within the next month, we could see a decline in customers.

When should you use a SWOT analysis?

You won’t always need an in-depth SWOT analysis. It’s most useful for large, general overviews of situations, scenarios, or your business.

A SWOT analysis is most helpful:

Before you implement a large change—including as part of a larger change management plan

When you launch a new company initiative

If you’d like to identify opportunities for growth and improvement

Any time you want a full overview of your business performance

If you need to identify business performance from different perspectives

SWOT analyses are general for a reason—so they can be applied to almost any scenario, project, or business. 

SWOT analysis example

One of the most popular ways to create a SWOT analysis is through a SWOT matrix—a visual representation of strengths, weaknesses, opportunities, and threats. The matrix comprises four separate squares that create one larger square. 

A SWOT matrix is great for collecting information and documenting the questions and decision-making process . Not only will it be handy to reference later on, but it’s also great for visualizing any patterns that arise. 

Check out the SWOT matrix below for a simple example. As you can see, each of the quadrants lists out the company's strengths, weaknesses, opportunities, and threats.

[Inline illustration] SWOT analysis (Example)

When used correctly and effectively, your matrix can be a great toolkit for evaluating your organization’s strengths and weaknesses. 

How do you write a good SWOT analysis? 

A SWOT analysis can be conducted in a variety of ways. Some teams like to meet and throw ideas on a whiteboard while others prefer the structure of a SWOT matrix. However you choose to make your SWOT analysis, getting creative with your planning process allows new ideas to flow and results in more unique solutions. 

There are a few ways to ensure that your SWOT analysis is thorough and done correctly. Let’s take a closer look at some tips to help you get started.

Tip 1: Consider internal factors 

Often, strengths and weaknesses stem from internal processes. These tend to be easier to solve since you have more control over the outcome. When you come across internal factors, you can start implementing improvements in a couple of different ways.

Meet with department stakeholders to form a business plan around how to improve your current situation.

Research and implement new tools, such as a project management tool , that can help streamline these processes for you. 

Take immediate action on anything that can be changed in 24 hours or less. If you don’t have the capacity, consider delegating these items to others with deadlines. 

The way you go about solving internal factors will depend on the type of problem. If it’s more complex, you might need to use a combination of the above or a more thorough problem management process.

Tip 2: Evaluate external factors

External factors stem from processes outside of your control. This includes competitors, market trends, and anything else that’s affecting your organization from the outside in. 

External factors are trickier to solve, as you can’t directly control the outcome. What you can do is pivot your own processes in a way that mitigates negative external factors. 

You can work to solve these issues by:

Competing with market trends

Forecasting market trends before they happen

Improving adaptability to improve your reaction time

Track competitors using reporting tools that automatically update you as soon as changes occur 

While you won’t be able to control an external environment, you can control how your organization reacts to it. 

Let’s say, for instance, that you’re looking to compete with a market trend. For example, a competitor introduced a new product to the market that’s outperforming your own. While you can’t take that product away, you can work to launch an even better product or marketing campaign to mitigate any decline in sales. 

Tip 3: Hold a brainstorming session

Brainstorming new and innovative ideas can help to spur creativity and inspire action. To host a high impact brainstorming session, you’ll want to: 

Invite team members from various departments. That way, ideas from each part of the company are represented. 

Be intentional about the number of team members you invite, since too many participants could lead to a lack of focus or participation. The sweet spot for a productive brainstorming session is around 10 teammates. 

Use different brainstorming techniques that appeal to different work types.

Set a clear intention for the session.

Tip 4: Get creative

In order to generate creative ideas, you have to first invite them. That means creating fun ways to come up with opportunities. Try randomly selecting anonymous ideas, talking through obviously bad examples, or playing team building games to psych up the team.

Tip 5: Prioritize opportunities

Now, rank the opportunities. This can be done as a team or with a smaller group of leaders. Talk through each idea and rank it on a scale of one through 10. Once you’ve agreed on your top ideas based on team capabilities, competencies, and overall impact, it’s easier to implement them.

Tip 6: Take action

It’s all too easy to feel finished at this stage —but the actual work is just beginning. After your SWOT analysis, you’ll have a list of prioritized opportunities. Now it is the time to turn them into strengths. Use a structured system such as a business case , project plan, or implementation plan to outline what needs to get done—and how you plan to do it.

Why is a SWOT analysis important?

A SWOT analysis can help you improve processes and plan for growth. While similar to a competitive analysis , it differs because it evaluates both internal and external factors. Analyzing key areas around these opportunities and threats will equip you with the insights needed to set your team up for success.

Why is a SWOT analysis important?

A SWOT analysis isn’t only useful for organizations. With a personal SWOT analysis, you can examine areas of your life that could benefit from improvement, from your leadership style to your communication skills. These are the benefits of using a SWOT analysis in any scenario. 

1. Identifies areas of opportunity

One of the biggest benefits of conducting an analysis is to determine opportunities for growth. It’s a great starting point for startups and teams that know they want to improve but aren’t exactly sure how to get started. 

Opportunities can come from many different avenues, like external factors such as diversifying your products for competitive advantage or internal factors like improving your team’s workflow . Either way, capitalizing on opportunities is an excellent way to grow as a team.

2. Identifies areas that could be improved

Identifying weaknesses and threats during a SWOT analysis can pave the way for a better business strategy.

Ultimately, learning from your mistakes is the best way to excel. Once you find areas to streamline, you can work with team members to brainstorm an action plan . This will let you use what you already know works and build on your company’s strengths.

3. Identifies areas that could be at risk

Whether you have a risk register in place or not, it’s always crucial to identify risks before they become a cause for concern. A SWOT analysis can help you stay on top of actionable items that may play a part in your risk decision-making process. 

It may be beneficial to pair your SWOT analysis with a PEST analysis which examines external solutions such as political, economic, social, and technological factors—all of which can help you identify and plan for project risks .

Plan for growth with a SWOT analysis

A SWOT analysis can be an effective technique for identifying key strengths, weaknesses, opportunities, and threats. Understanding where you are now can be the most impactful way to determine where you want to go next. 

Don’t forget, a bit of creativity and collaboration can go a long way. Encourage your team to think outside of the box with 100+ team motivational quotes . 

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What is SWOT Analysis?

SWOT Analysis Example

SWOT analysis is a process where the management team identifies the internal and external factors that will affect the company's future performance. It helps us to identify of what is happening internally and externally, so that you can plan and manage your business in the most effective and efficient manner.

When to Use SWOT Analysis?

A SWOT involves identifying the strengths and weaknesses of the organization, and opportunities and threats present in the market that it operates in. It can be used for studying various situation of a business:

Basic Concepts of SWOT Analysis

The SWOT analysis will help you understand the company's position which will encourages ideas and decision-making on how to build on strengths, exploit opportunities, minimize weaknesses and protect against threats. Below are four benefits of using a SWOT analysis for your business:

SWOT Question and Checklist

We can conduct the SWOT analysis by answering the group of similar questions (depending on the context or nature of the problems you would like to solve) for each of the four components:


SWOT Template

You can develop a list of prioritized Strengths, Weaknesses, Opportunities and Threats based on some questions, analysis, interviews research of the current state and external operating environment.

SWOT Templates

How to Conduct SWOT Analysis?

As we mentioned before, SWOT stands for Strengths, Weaknesses, Opportunities and Threats. It is a way of summarizing the current state of a company and helping to devise a plan for the future. Regardless of whether you or your team are future planning for specific products, work, personal or any other area, the SWOT analysis process can be conducted with the following steps:

Step 1 - List all strengths that exist now. Then in turn, list all weaknesses that exist now.

Step 2 - List all opportunities that exist in the future. Opportunities are potential future strengths . Then in turn, list all threats that exist in the future. Threats are potential future weaknesses .

Step 3 - Plan of action - Review your SWOT matrix with a view to creating an action plan to address each of the four areas.

SWOT Analysis Example 1 - Internet Small Business Startup

Action plan.

As you use the SWOT Analysis for planning, you align the positive elements to help take advantage of opportunities and identify the gaps in the negative elements that must be improved or managed. Driving to implications from the SWOT requires us to take a strategic leap, looking at the connections across the categories (e.g. where does a strength help us mitigate a threat), as well as looking holistically across for trends.

SWOT Analysis Example 2 - Starbucks *

SWOT Analysis Example 2

SWOT Analysis Example 3 - Nike *

SWOT Analysis Example 3

*Disclaimer: This case study has been compiled from information freely available from public sources. It is intended to be used as an example for illustration purposes only

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* SWOT Analysis is powered by Visual Paradigm's web technology. You can create it in both Visual Paradigm Desktop and Visual Paradigm Online .

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Why Is a SWOT Analysis Important [+ Examples]

By Cristian Oana , Feb 04, 2022

Why Is a SWOT Analysis Important

For small businesses, SWOT is one of the most important acronyms. SWOT stands for an organization’s strengths, weaknesses, opportunities, and threats.

Why is a SWOT analysis important when creating a business strategy? It’s a powerful tool to assess internal and external factors that give a business a clear advantage and help it keep abreast of consumer trends.

In this guide, we’ll share how SWOT analyses help business owners identify areas of improvement and find competitive advantages in the industry.

Haven’t conducted a SWOT analysis before? Venngage makes it easy to create a SWOT analysis  report with numerous templates and customization options.

Click to jump ahead:

What are the four elements of a swot analysis, what questions to ask for a swot analysis, what is the importance of swot analysis for businesses, how to do a swot analysis for your business.

A SWOT analysis examines a business’s position in the market, its potential growth, and the factors that make the business vulnerable.

The SWOT framework takes into account a company’s internal concerns, as well as negative external factors, as you can see in the example below.

why is a swot analysis important

This is why a SWOT analysis is also referred to as internal-external analysis. It plots the company’s internal strengths and internal weaknesses while assessing external opportunities and threats.

Return to Table of Contents

All businesses should regularly conduct a SWOT analysis to assess their strengths, weaknesses, opportunities, and threats in relation to their competitors. (Hint: SWOT analyses are especially useful for marketing departments , sales organizations and in highly changeable industries like healthcare .)

To do so, it is important to have a checklist of questions for each of the four quadrants so you can create a SWOT analysis internal diagram like the one below.

why is a swot analysis important

How to identify strengths

To determine your company’s strengths, start taking advantage of these internal factors:

How to find weaknesses

To find possible weaknesses in your organization, ask these questions:

How to discover business opportunities

Find and create opportunities for your organization by looking into the following external factors:

How to anticipate threats facing your business or projects

Recognize and brace for threats by considering these points:

You can see how asking these questions can help you build a SWOT matrix, like the one below.

why is a swot analysis important

Easily design a branded SWOT analysis with Venngage’s My Brand Kit  feature. Enter your website when prompted and our editor will automatically add your brand logo, colors, and fonts to your designs.

For companies to respond proactively to the changing dynamics of the industry (especially in light of the global pandemic), executives need to understand the importance of using a SWOT analysis.

A SWOT analysis improves your business’s adaptability

When you are aware of the possibilities that your company can achieve, it is easier to adapt to market trends.

Knowing your own strengths and limitations can help you penetrate the market and meet your targets. For example, the SWOT analysis below goes into more detail about the organization’s strengths and opportunities.

why is a swot analysis important

Plus, if your organization is aware of its weaknesses and potential areas of improvement, it becomes easier to mitigate future roadblocks and ensure long-term growth.

A SWOT analysis leads to better use of resources

Regardless of its size, every company has finite resources, such as human resources and capital.

Evaluating your company’s strengths will allow you to determine how to allocate your resources efficiently. This will help you achieve revenue growth and profitability.

Share your SWOT analysis with potential partners with Venngage. Generate a private link to share online or upgrade to a paid plan  to download your SWOT analysis as a PNG, PNG HD, PDF, Interactive PDF, or PowerPoint presentation.

A SWOT analysis improves business operations

Assessing a company’s weaknesses doesn’t mean you are looking for someone to blame for past shortcomings.

Instead, this exercise will identify the most vulnerable areas that need improvement so the organization will be better able to compete within the market.

That’s one of the major points in this SWOT analysis example.

Orange Brewery SWOT Analysis Template

The continuous improvement of a company’s operations in all aspects is extremely important to be able to stay ahead of competitors.

A SWOT analysis leads to the discovery of new opportunities

A business that does not seek out new opportunities is bound to fail, one way or another. A SWOT analysis works best when a company is assessing new ideas.

These include reaching out to a new customer base, broader product distribution, development of new products and services, and geographical expansion.

Improve strategic planning by adding charts to your SWOT analysis. With Venngage templates, you can create a variety of charts that give a quick overview of how your company is staying ahead of the competition.

Import data directly from a Google spreadsheet, CSV, or XLSX file, and our editor automatically populates the chart with your data.

A SWOT analysis helps your business deal with risks

Threats in a SWOT matrix are generally external factors that can have a negative impact on a company’s performance. These include sudden changes in government policy or even intellectual property.

Such threats can happen suddenly. But with a SWOT analysis, like the one below, a company can prepare for the worst.

why is a swot analysis important

When your organization takes the time to develop contingency plans that are quickly implemented when the threats become a reality, risks become less of a threat.

This is how a SWOT analysis can help your company prepare better for whatever it may encounter in the external environment.

A SWOT analysis gives businesses a competitive advantage

A SWOT analysis helps determine a company’s position in relation to the industry. An analysis like the example below also shows the areas that perform well and where the organization’s competitive advantage lies.

why is a swot analysis important

Your organization can continue to grow if you regularly examine business news to find new ways to build on your strengths. For more customizable templates and tips, check out our post: 20+ SWOT Analysis Templates, Examples & Best Practices .

Achieve your organization’s goals and objectives with the information you gather from your SWOT analysis. Use the following steps to conduct an effective SWOT.

Step 1. Establish your business objectives

From the beginning, you have to have a clear objective or problem that the SWOT analysis will solve.

For example, in preparation for the launch of a new product or service. Or when you’re planning to expand your team and don’t know whether those internal factors will benefit your brand, like in this example.

why is a swot analysis important

Step 2. Conduct research

Understand where your company stands in relation to the industry it belongs to before you begin the SWOT analysis. This is crucial for strategic planning for a company of any size.

Hold a brainstorming session with your team, partners, investors, and clients to get a diverse range of perspectives. Don’t forget to take competitors into account so find time to research them.

Step 3. List your business’s strengths and weaknesses

Identify and list down your business’s strengths and weaknesses. Your strengths could be internal factors, like your workforce, financial resources, competitiveness, or even your location. Weaknesses could be a lack of innovative products or employee absenteeism.

why is a swot analysis important

Your goal should be to look back on your SWOT analysis and find that your weaknesses have already been resolved.

Despite the emergence of new weaknesses over time, the fact that you have already addressed the old ones is a good indicator.

Step 4. Examine your business’s potential opportunities and threats

Identify all possible internal and external factors that will create opportunities or threats for your organization.

Opportunities could include innovative technologies, potential investors and partnerships, training programs, and a diversified market, like in this SWOT analysis example.

why is a swot analysis important

Threats may include unemployment growth, the emergence of competitors, and uncertainty in global markets.

Step 5. Determine the hierarchy of business priorities

Determine the hierarchy of the issues you’ve listed in all four quadrants, from the most important concerning to the least.

Step 6. Develop strategies for your brand

Review the prioritized list by asking how, with your strengths and weaknesses, you can improve internal factors to create more opportunities and counteract potential threats.

Use customizable templates for your SWOT analysis

SWOT analyses are a necessary exercise for analyzing and understanding the health of an organization.

Not only does a SWOT analysis allow decision-makers and business leaders to determine where the company stands, but it also identifies areas that need to be improved.

This information will help the company make strategic plans to reach its target audience and remain competitive.

Make your own SWOT analysis with Venngage’s customizable templates and improve your internal processes, market position, and boost business opportunities.

How to Write a SWOT Analysis Essay

Businesses need to come up with their reasons in the beginning and then set clear goals to survive and thrive. With the cut-throat competition in the market to attract more customers, data is the new commodity. Through data, companies collect, analyze, and interpret their growth and challenges as well as that of their competitors.

When looking internally, companies need to keep tabs on their corporate health. Many tools can draw a clear and discernible picture of their business for them. One of these tools is a SWOT analysis.

What Is SWOT Analysis Paper?

Importance of swot analysis, what are the four parts of a swot analysis, swot internal and external factors: what to include, swot analysis essay format, swot analysis essay examples.

SWOT analysis paints a very clear picture of the current health and challenges a company could face. That’s why before conducting one, businesses and organizations should not count preexisting beliefs and value gray areas with great precaution.

swot analysis definition

SWOT Analysis is a planning tool that offers strategic insight to a business regarding its (S) trengths, (W) eaknesses, (O) pportunities, and (T) hreats – hence the name SWOT !

The rationale behind conducting SWOT Analysis is to get a realistic take on both internal and external conditions a business could be facing and to determine a future course of action. Since it takes many input streams to gather and analyze the four cardinal indicators, it is best if a company involves diverse and even diverging sources to get well-grounded data.

Since own SWOT Analysis tries to assess current market trends and causes to predict future outcomes, the results from any study should be taken with a pinch of salt and then adjusted accordingly.

The best thing about SWOT Analysis is that it can be done at a larger business or industry level and on a smaller scale, such as a product line or subsidiary. That’s why businesses spend a big portion of their budget to write a SWOT Analysis report to get a competitive edge against their competitors.

SWOT Analysis can help businesses in project planning for future outcomes and overcoming challenges and threats through the strategic planning process. It gives a clear view of what are the comparative advantages a business is enjoying and the opportunities it can explore based on those advantages. On the other side, it gives indications where a business could be facing disadvantages comparatively and serious issues that can materialize based on them.

Following are some of the points that highlight the importance of SWOT Analysis:

Customizable According to Purpose

At first, SWOT Analysis was only conducted by businesses for very obvious reasons. Later, it was adopted by governments and regulatory bodies to gauge the current and future potential of economic indicators. Now, even entrepreneurs and investors conduct a personal SWOT analysis before making investment decisions.

SWOT Analysis can be tailored and customized according to the question or purpose that the party wants to be answered.

Helps Fortifying Strengths

At the decision-making level, there are always trade-offs and one side gets the best end of the bargain. Businesses make sure they do not cut off profit-making sectors and product lines because of poor insight. This is where SWOT Analysis help them identify the strengths or comparative advantages their businesses have over competitors or throughout the industry.

Keeps Disadvantages at Bay

In the same manner, SWOT Analysis can help stakeholders identify weaknesses in the business. These could be internal or external, mostly the former. By identifying these, managers are in a better position to minimize their effects in the short term and even root them out in the long run.

Highlights Opportunities

In businesses, a missed opportunity is a big loss. This is where SWOT Analysis shines through. Providing a realistic look at the internal factors and how companies can employ them for an external advantage or an opportunity, helps businesses in capturing opportunities to make big profits early on.

Neutralizes Threats

Things that can disrupt the advantages a business has outside of the company can be termed as external potential threats. Threats are external and can be caused by changes in the industry or a competitor’s business. Through SWOT Analysis, companies can identify these threats and neutralize them before they can cause more damage.

what is a swot analysis essay

The researchers usually employ a four quadrants approach to describe and detail SWOT Analysis. This way, it looks into all of the elements with necessary questions answered in a precise fashion.

The term SWOT Analysis is made up of four elements:

Strengths describe what works well for a company. It can be a strong brand, a loyal customer base, an effective marketing strategy, and so on. They often shed light on what a business is doing and how it is doing it. In addition to this, strengths are multidimensional as they not only maximize profits in the short run but also contribute to the expansion and growth of a company.

Companies need to operate at an optimum level to maximize their profits. Weaknesses are all the negative factors that can stop them from doing so. The most common examples of weakness in a company can be a high turnover of employees, high levels of debt, inadequate capital, etc.


Opportunities, as the name indicates can be an incident or a setting that gives a window for competitive advantage to a business. These could be at the business level or even the state level. For instance, if a country revised the tax and excise structure for imports, it can help foreign companies to entice customers into buying their products.

Anything that can disrupt the status quo for a business, assuming the business was doing very well, can be a threat. Developments and incidents in the external business environment can lead to dropping in profit margins, company outlook, environmental factors, etc. The most common threats that businesses face include the rising cost of materials, increasing competition, and so on.

In SWOT Analysis, all the four elements are often set in four-quadrant tables. This allows easy access and a following of the table based on the information given in each of the quadrants. Besides this, there is another distinction between elements.

Internal Factors

Strengths and weaknesses are often described under internal factors. Since these can be directly gauged and adjusted by the companies with no almost no external influence on them. These internal strengths include financial and human capital a company possesses, assets and patents, and so on.

External Factors

Companies do not operate in a vacuum. The external environment or factors that affect business operations are compiled under external factors. These include opportunities and threats that a company faces, such as changes in tariff structure, access to exclusive suppliers, etc.

Writing a SWOT Analysis paper can be scary for someone who hasn’t done it before. There are so many variables and anything can go wrong which can affect the results interpreted from the analysis. There is also a risk of creating clutter or informational bottlenecks which could lead to overall poor quality of the essay.

Here is an outline to present a SWOT Analysis essay format that students and researchers can take advantage of:

Another way of learning how to write an example of a SWOT Analysis paper is by going through the already published examples. They are often done by professional writers with ample experience and expertise in the industry. With clear objectives and insights, these analyses cannot only help the intended audience but also students and young researchers to write a SWOT Analysis summary.

Following are some of the greatest SWOT Analysis essay examples you can find on the web:

FAQs SWOT Analysis Essay

❓ what are examples of strengths in a swot analysis.

When it comes to internal strengths in SWOT Analysis, all internal things that help a business in maximizing profits while giving them a comparative advantage over its competitors can be termed under the strengths table. Examples of strengths can be human and financial resources, proprietary operations and processes for improved efficiency, and so on.

❓ What Is The Most Difficult Part Of The SWOT Analysis?

SWOT Analysis paper intends to give a clear picture of a business based on its internal and external factors. All the determinants and results on the availability of reliable, unbiased data. This is the most difficult part of SWOT Analysis – gathering and interpreting reliable data.

❓ What Is The Most Important Part Of The SWOT Analysis?

While conducting SWOT Analysis, analysts should be aware of the direction of their research and the impact it will have on previous and future calculations. That’s why the direction of analysis in SWOT Analysis is the most important thing.

The best way to move forward is to start with internal factors – strengths and weaknesses, and then move to external factors – opportunities and threats.

what is a swot analysis essay

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Sample Essay On SWOT Analysis

Type of paper: Essay

Topic: Company , Business , Strategy , Competition , Strengths , Advantage , Information , Politics

Words: 1800

Published: 11/04/2021


The purpose of this essay is to present the theoretical background of SWOT analysis, its advantages and the disadvantages. One of the tools used in many researches not only in business area has blurred and contradicting views of its origins. Every company, business or alone actor needs to be aware of its strengths, weaknesses, threats and opportunities and here is where SWOT analysis comes in hand in order to reach the specific companies, business or enterprise’s goals. Since in today’s world, it is not enough to be just good, one needs to have a strategic advantage with added value to consumers. In order to reach that you need to have a SWOT analysis done. Many different tolls of research are known today and one that can be effective when taking into consideration both advantages and disadvantages is also examined SWOT analysis. The origins of SWOT are not clear (Lewin Eyal 2012, 17). The begging of a method goes back to the year 1950 to 1970 (Pahl, Richter 2007, 7). Last but not least the essay will examine the advantages and disadvantages of the SWOT analysis. The SWOT analysis is a tool and a method that examines as can be seen from its acronym strengths, weaknesses, opportunities and threats (Speth 2015, 5). It is an important decision making tool (Valentin, Lewin 2012, 18). With strengths mostly internal factors such as employees, team, management, and members and their experience and competence play a vital role. Weakness need to be addressed to improve your enterprise and make it even better and come over the obstacles. Opportunities are (Harvard Business School Publishing Corporation 2006, 4) “trends, forces, events, and ideas that companies or unit can capitalize on”. With threats mostly external factors that will have influence on you conducting of business matter, such as regulations and politics, competition, market, social, economic and technological conditions. Every single one of factors analysis as it one part have an effect on all others. With SWOT analysis the maximization of strength and minimization of weakness can be overcome. It needs to be used in strategic purposes with showing external and internal prioritizations factors (Septh 2015, 7). The reason and purpose of doing SWOT analysis are to achieve plans for the future and set the goals, where strengths and weaknesses are internal factors and opportunities and external threat. Purpose and reason for doing SWOT can be derived from Porter’s Fife Forces that can help the business decide either to enter some industry or not and they include power of suppliers, power of barriers, competitive rivalry and availability of substitutes (Porter 1998). It matters how many suppliers the company has since that determines their power. It is important what kind of product one has and what importance it represents to the consumers, are there any competitors with similar product or service, and what are the input and output costs. With these and other factors defined by Porter taken into account the company can calculate the profitability and attractiveness. The company is working in the network of buyers, suppliers and substitutes where competition and new entrants play a very important role. For the strategic analysis Porters concepts prove to be valuable for newly started business even more. All actors on the market compete with each other and that’s why the theory of Competitive Advantage matters. Outperformance of others can be achieved (Porter 1998) with access to natural resources, skilled personnel, geographic location, entry barrier that does not permit others to become a concurrence, new technologies, that lead to a better product or service in accordance with the consumer’s needs. The focus should not be only on one core components, but on the trade-offs activity in order to reach sustainability of a strategy (Porter 1996). Based on Porter organization needs to develop unique skills that have not been seen by other organizations that need to be used in the context that makes them valuable for the company (Arhyres and McGahan 2002, 47). The purpose of the Competitive strategy is not to write strategy per se, but to create a useful strategic plan by using the right set of skills for the right purposes. The right question needs to be answered and that is why the SWOT analysis is important to be developed before an overall strategy. Porter argued that the strategy must rest on the certain economic fundamentals even though changes are constant present (Arhyres and McGahan 2002, 49). Strategic planning must focus on the purpose of the company, vision and values, key issues company is facing, with external and internal analysis, aim of competitions, operational plan and projects, sales and resource plan, monitoring and learning that will be included into the strategy that should be customized through the time (Kaplan and Northon, 2008). We can see that from Porter to Kaplan and Northon all have argued the factors that are already foreseen in the SWOT. Advantages of the SWOT analysis lie in identifying the most important internal and external factors that will have an influence on the company. The strengths, weakness, opportunities and threats are being summarized in order to “eliminate weakness and exploiting its capabilities, or to use an option in the fight against threats” (Oreski 2012, 284). Another advantage of the SWOT lies in its simplicity of usage and it is based on the real data and information not only on a theoretical level. It uses both external and internal factors. It can be used for analyzing various actors in order to create a good and effective strategy. With the SWOT strengths can reverse its weaknesses. The organizational threats can be overcome with the clear points. With a concept the objective stance is achieved with almost no extra costs for the company. With the SWOT analysis one can understand the business better. With the SWOT the identification and clarification of fundamental policy choices, programs can be seen (Kearns 1992, 25). Disadvantages of the SWOT analysis as argued by Wang can be to open nature without clear method to conduct the analysis and cannot be effective without the incorporation strategy (Wang 2015, 1). The whole SWOT is hard to present because of the changing nature of the circumstances company works. It can happen that some of the four factors because of various factors cannot be examined and because of the changing life cycle on the way to contribute to the success (Wang 2015, 2). Inability of SWOT to “quantify the effects of weight and strategic factors on alternatives” is another disadvantage. The analysis is presented as factors do not influence each other which are incorrect since they are not independent but interconnected. Another disadvantage was presented by Oreski (2012, 286) such as based only on qualitative analysis. Only using the factor determined by SWOT analysis will not suffice the needs because of the general and brief analysis not taking into account other more complicated aspects. Shallow and misleading results can be produced (Valentin 2001, 54). Many critics have gone to the simple factors included, looking into the information without interconnections and consequences of each factor have on others. It focuses on fulfilling the set of factors without looking forward to the strategic implications it wants to reach. Hill and Westbrook (1997) have even stated that it can harm the performance. The failure to prioritize and give meaning findings should eliminate the SWOT analysis from conducting. The limitation can be seen also in inability of management to control various factors. To summarize the disadvantages no prioritization, no solutions or alternatives, many different ideas without the focus on the main one, much information can be useless. The essay has showed unclear history of the origins of the SWOT analysis. Many various and contradicting information and data have been found with no real evidence of its epistemology. Regardless of its innovator that has roots around the globe that has led to today’s most known research tool, various articles were taken into consideration with presenting the advantages and disadvantages of the SWOT. To sum up both one can conclude that in some cases the SWOT can lead to good results and in many also in the opposite direction. Conduced in the right way its simple used framework can be used in various companies, actors, enterprises from a more educated and sophisticated manager to the ordinary man. For newly started companies defining the strengths, opportunities, threats and weaknesses lead to structural orientation, setting the goals and the aim company wants to achieve. For every new actor, new start up or joint venture Porter’s theory of competitive advantage can be useful. Competitive advantage needs to be reached in order for a business to be profitable and achieve its goals in an ever more interconnected world.


Arhyres, Nicholas, McGahan, M. Anita. (2002). An Interview with Michael Porter. Web. Retrieved from <file:///C:/Users/PuskA/Downloads/Content%20Interview%20%20(1).pdf> Harvard Business School Publishing Corporation. 2006. SWOT Analysis I: Looking Outside for Threats and Opportunities. Retrieved from file:///C:/Users/PuskA/Downloads/SWOT%20Analysis%20I%20-%20Threats%20and%20Opportunities%20(1).pdf Harvard Business School Publishing Corporation. 2006. SWOT Analysis II: Looking Inside for Strengths and Weaknesses. Retrieved from: file:///C:/Users/PuskA/Downloads/Strength%20&%20Weaknesses%20HBR%20(1).pdf Hill, T. & R. Westbrook. (1997). "SWOT Analysis: It’s Time for a Product Recall". Long Range Planning 30 (1): 46–52. Retrieved from 10.1016/S0024-6301(96)00095-7. Kaplan, S. Robert, Norton, P. David. (2008). Mastering the Management System. Harvard Business Review. Retrieved from <https://hbr.org/2008/01/mastering-the-management-system> Kearns, Kevin P. 1992. From Comparative Advantage to Damage Control: Clarifying Strategic Issues Using SWIT Analysis. Retrieved from http://www.udel.edu/ccrs/NPMCC_2006_Materials/Karen_Curtis/Kearns_article.pdf Lewin, Eyal. (2012). National Resilience During War: Refining the Decision-Making Model. New York: Lexington Books. Oreski, Dijana. (2012). Strategic development by using SWOT – AHP. TEM Journal – Volume 1, number 4. 2012. Retrieved from https://www.academia.edu/3019214/Strategy_development_by_using_SWOT_-_AHP Pahl, Nadine, Richter Anne. (2007). SWOT Analysis – Idea, Methodology And A Practical Approach. Germany: GRIN Verlag. Porter, Michael. (1996). “What is Strategy?”. Harvard Bussines Review. Web. Retrieved from <https://hbr.org/1996/11/what-is-strategy> Porter, Michael. (1998). Competitive Advantage: Techniques for Analyzing Industries and Competitors. Print. Free Press. Speth, Christopher. (2015). SWOT Analysis. Namur: Lemaitre Publishing, 50 minutes. Valentin, E. K. (2001). SWOT Analysis from a Resource-Based View. Journal of Marketing Theory and Practice. Vol 9, NO. 2. Pp 54-69. Wang, Kuang-cheng. (2015). A Process view of SWOT Analysis. Retrieved from http://journals.isss.org/index.php/proceedings51st/article/viewFile/470/242

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    A SWOT analysis is a technique used to identify strengths, weaknesses, opportunities, and threats for your business or even a specific project. It’s most widely used by organizations—from small businesses and non-profits to large enterprises—but a SWOT analysis can be used for personal purposes as well.

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    A SWOT analysis examines a business’s position in the market, its potential growth, and the factors that make the business vulnerable. The SWOT framework takes into account a company’s internal concerns, as well as negative external factors, as you can see in the example below. CREATE THIS DIAGRAM TEMPLATE

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    The term SWOT Analysis is made up of four elements: Strengths Weaknesses Opportunities Threats Strengths Strengths describe what works well for a company. It can be a strong brand, a loyal customer base, an effective marketing strategy, and so on. They often shed light on what a business is doing and how it is doing it.

  5. Sample Essay On SWOT Analysis

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