Business & Marketing

SWOT Analysis

Strength, Weakness, Opportunities, Threat (SWOT) analysis provides direction and serves as a basis for the development of marketing plans. It accomplishes this by assessing organizations: [1]

  • Strengths: what an organization can do
  • Weaknesses: what an organization cannot do
  • Opportunities: potentially favorable conditions for an organization
  • Threats: potentially unfavorable conditions for an organization.

Definition: A SWOT analysis helps an organization’s in determining its strengths and weaknesses (S-W), as well as its opportunities and threats (O-T) to help with better decision making and planning.

Purpose of SWOT Analysis

The purpose of a SWOT Analysis is to give management and project personal information regarding if any positive or negative organizational factors might affect the outcome of their business objectives. Basically, find out what’s working and not working well so they can prioritize decisions.

Role of SWOT Analysis

SWOT analysis is an important step in planning and its value is often underestimated despite the simplicity in creation. The role of SWOT analysis is to take the information from the environmental analysis and separate it into internal issues (strengths and weaknesses) and external issues (opportunities and threats). Once this is completed, SWOT analysis determines if the information indicates something that will assist the firm in accomplishing its objectives (a strength or opportunity), or if it indicates an obstacle that must be overcome or minimized to achieve desired results (weakness or threat).


When writing down strengths, it is imperative that they be considered from both the view of the firm as well as from the customers that are dealt with. These strengths should be realistic and not modest. A well-developed listing of strengths should be able to answer a couple of questions.

  • What are the firm’s advantages?
  • What does the firm do well?


Weaknesses should also be considered from an internal and external viewpoint. It is important that listing of firm’s weaknesses is truthful so that they may be overcome as quickly as possible. Delaying the discovery of weaknesses that already exist within a company will only further hurt the firm. A well-developed listing of weaknesses should be able to answer a few questions.

  • What can be improved?
  • What is done poorly?

Opportunities and Threats

Companies should always focus on Opportunities and Threats in the external environment. Changes occur rapidly these days in the marketplace. These changes can occur in the rate of overall market growth and in the competitive, economic, political/legal, technological, or sociocultural environments. A few of the changes that accompany should focus on are:

  • Changes in the Competitive Environment
  • Changes in the Sociocultural Environment
  • Changes in the Political/Legal Environment
  • Changes in the Internal Organizational Environment

SWOT Analysis Results Application

SWOT analysis is necessary to minimize or avoid both weaknesses and threats. Weaknesses should be looked at in order to convert them into strengths. Likewise, threats should be converted into opportunities. Lastly, strengths and opportunities should be matched to optimize the potential of a firm. Applying SWOT in this fashion can obtain leverage for a company.

SWOT Analysis Benefits

SWOT analysis can be extremely beneficial to those who objectively analyze their company. The marketing manager should have a rough outline of potential marketing activities that can be used to take advantage of capabilities and convert weaknesses and threats. [1]


  • There will likely be many potential directions for the managers to pursue in conducting a SWOT analysis. Due to the limited resources that most firms have, it is difficult to accomplish everything at once. The manager must prioritize all marketing activities and develop specific goals and objectives for the marketing plan.

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Updated: 7/12/2021

Rank: G91.2

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