A SWOT analysis puts your company's internal strengths and weaknesses and the market's external opportunities and threats in one table. Its value lies in what comes after the table: decisions that use strengths to seize opportunities and fix weaknesses before a threat turns into a loss.
Step by step
- 1
Gather the numbers first
Sales, margins, customer feedback and complaints, and competitor prices, so the analysis rests on evidence rather than impressions.
- 2
Strengths and weaknesses are internal
What the company itself has or lacks: the team, quality, costs, systems, reputation and location.
- 3
Opportunities and threats are external
What happens in the market that you do not control: changing customer needs, a new competitor, regulations, material prices and new sales channels.
- 4
Be specific
Instead of a general phrase about good service, write that customers renew their contracts and complaints are few, if that is what your numbers say.
- 5
Turn the table into decisions
Link the items: a strength that seizes an opportunity, a strength that blocks a threat, a weakness to fix so you can take an opportunity, and a weakness and threat together whose effect you reduce. This step is known as the TOWS matrix.
- 6
Give each decision an owner
Three to five actions only, each with an owner and a date, and review the analysis every year or when the market changes significantly.
Mixing up internal and external items ruins the analysis: a growing market is an opportunity, not a strength, and a weak sales team is a weakness, not a threat.
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