As your business grows, you need a roadmap to help navigate the obstacles, challenges, opportunities, and projects that come your way. Enter: the SWOT analysis.
This framework can help you develop a plan to determine your priorities, maximize opportunities, and minimize roadblocks as you scale your organization. Below, let’s go over exactly what a SWOT analysis is, a few SWOT analysis examples, and how to conduct one for your business.
When you’re done reading, you’ll have all the inspiration and tactical advice you need to tackle a SWOT analysis for your business.
While it may seem simple on the surface, a SWOT analysis allows you to make unbiased evaluations on:
- Your business or brand.
- Market positioning.
- A new project or initiative.
- A specific campaign or channel.
Practically anything that requires strategic planning, internal or external, can have the SWOT framework applied to it, helping you avoid unnecessary errors down the road from lack of insight.
Importance of a SWOT Analysis
You’ve noticed by now that SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. The framework seems simple enough that you’d be tempted to forgo using it at all, relying instead on your intuition to take these things into account.
But you shouldn’t. Doing a SWOT analysis is important. Here’s why.
SWOT gives you the chance to worry and to dream.
A SWOT analysis is an important step in your strategic process because it gives you the opportunity to explore both the potential risks and the exciting possibilities that lie ahead. You’re giving yourself the space to dream, evaluate, and worry before taking action. Your insights then turn into assets as you create the roadmap for your initiative.
For instance, when you consider the weaknesses and threats that your business may face, you can address any concerns or challenges and strategize on how to mitigate those risks. At the same time, you can identify strengths and opportunities, which can inspire innovative ideas and help you dream big. Both are equally important.
SWOT forces you to define your variables.
Instead of diving head first into planning and execution, you’re taking inventory of all your assets and roadblocks. This process will help you develop strategies that leverage your strengths and opportunities while addressing and mitigating the impact of weaknesses and threats.
As a result, you’ll gain a comprehensive understanding of your current situation and create a more specific and effective roadmap. Plus, a SWOT analysis is inherently proactive. That means you’ll be better equipped to make informed decisions, allocate resources effectively, and set realistic goals.
SWOT allows you to account for mitigating factors.
As you identify weaknesses and threats, you’re better able to account for them in your roadmap, improving your chances of success.
Moreover, accounting for mitigating factors allows you to allocate your resources wisely and make informed decisions that lead to sustainable growth. With a SWOT analysis as a guide, you can confidently face challenges and seize opportunities.
SWOT helps you keep a written record.
As your organization grows and changes, you’ll be able to strike things off your old SWOTs and make additions. You can look back at where you came from and look ahead at what’s to come.
In other words, SWOT analyses serve as a tangible history of your progress and provide a reference point for future decision-making. With each update, your SWOT analysis becomes a living document that guides your strategic thinking and helps you stay agile and adaptable in an ever-changing business landscape.
By maintaining this written record, you foster a culture of continuous improvement and empower your team to make data-driven decisions and stay aligned with your long-term vision.
Parts of a SWOT Analysis
Conducting a SWOT analysis will help you strategize effectively, unlock valuable insights, and make informed decisions. But what exactly does a SWOT analysis include?
Let’s explore each component: Strengths, Weaknesses, Opportunities, and Threats.
Your strengths are the unique advantages and internal capabilities that give your company a competitive edge in the market. A strong brand reputation, innovative products or services, or exceptional customer service are just a few examples. By identifying and capitalizing on your strengths, you can foster customer loyalty and build a solid foundation for growth.
No business is flawless. Weaknesses are areas where you may face challenges or fall short of your potential. It could be outdated processes, skill gaps within the team, or inadequate resources. By acknowledging these weaknesses, you can establish targeted initiatives for improvement, upskill your team, adopt new technologies, and enhance your overall operational efficiency.
Opportunities are external factors that can contribute to your company’s progress. These may include emerging markets, technological advancements, changes in consumer behavior, or gaps in the market that your company can fill. By seizing these opportunities, you can expand your market reach, diversify your product offerings, forge strategic partnerships, or even venture into untapped territories.
Threats are external factors that are beyond your control and pose challenges to your business. Increased competition, economic volatility, evolving regulatory landscapes, or even changing market trends are examples of threats. By proactively assessing and addressing them, you can develop contingency plans, adjust your strategies, and minimize their impact on your operations.
In a SWOT analysis, you’ll have to take both internal and external factors into account. We’ll cover those next.
SWOT Analysis Internal and External Factors
A SWOT analysis typically has internal (i.e., within your organization) and external (i.e., outside your organization) factors at play. Here’s a breakdown of each.
Internal factors refer to the characteristics and resources within your organization that directly influence its operations and performance. These factors are completely within your organization’s control, so they can be modified, improved, or capitalized upon.
In a SWOT analysis, strengths and weaknesses are categorized as internal factors. Let’s look at a few examples.
- Brand reputation
- Unique expertise
- Loyal customer base
- Talented workforce
- Efficient processes
- Proprietary technology
- Outdated technology
- Inadequate resources
- Poor financial health
- Inefficient processes
- Skill gaps within the team
External factors are elements outside the organization’s control that have an impact on its operations, market position, and success. These factors arise from the industry climate and the broader business environment. You typically have no control over external factors, but you can respond to them.
In a SWOT analysis, opportunities and threats are categorized as external factors. Let’s look at a few examples.
- Emerging markets
- Changing consumer trends
- Technological advancements
- Positive shifts in regulations
- New gaps in the market you could fill
- Intense competition
- Economic downturns
- Disruptive technologies
- Changing regulations
- Negative shifts in consumer behavior
Remember, a well-rounded SWOT analysis empowers you to capitalize on strengths, address weaknesses, seize opportunities, and navigate threats — all while making informed decisions for the future.
Now, let’s take a look at how you can write a good SWOT analysis for yourself or for stakeholders.
How do you write a good SWOT analysis?
There are several steps you’ll want to take when evaluating your business and conducting a strategic SWOT analysis.
There’s no need to start from scratch for your analysis. Instead, start by downloading a free, editable template from HubSpot. Feel free to use the model yourself, or create your own as it suits your needs.
2. Arrange each section into a table with four quadrants.
Whether you use the template above or create your own, a table format can help you visualize your SWOT analysis. This can be done by arranging each of the four sections into separate quadrants.
3. Identify your objective.
Before you start writing things down, you’ll need to figure out what you’re evaluating with your SWOT analysis.
Be specific about what you want to analyze. Otherwise, your SWOT analysis may end up being too broad, and you’ll get analysis paralysis as you are making your evaluations.
If you’re creating a new social media program, you’ll want to conduct an analysis to inform your content creation strategy. If you’re launching a new product, you’ll want to understand its potential positioning in the space. If you’re considering a brand redesign, you’ll want to consider existing and future brand conceptions.
All of these are examples of good reasons to conduct a SWOT analysis. By identifying your objective, you’ll be able to tailor your evaluation to get more actionable insights.
4. Identify your strengths.
“Strengths” refers to what you are currently doing well. Think about the factors that are going in your favor as well as the things you offer that your competitors just can’t beat.
For example, let’s say you want to use a SWOT analysis to evaluate your new social media strategy.
If you’re looking at a new social media program, perhaps you want to evaluate how your brand is perceived by the public. Is it easily recognizable and well-known? Even if it’s not popular with a widespread group, is it well-received by a specific audience?
Next, think about your process: Is it effective or innovative? Is there good communication between marketing and sales?
Finally, evaluate your social media message, and in particular, how it differs from the rest of the industry. I’m willing to bet you can make a lengthy list of some major strengths of your social media strategy over your competitors, so try to dive into your strengths from there.
5. Identify your weaknesses.
In contrast to your strengths, what are the roadblocks hindering you from reaching your goals? What do your competitors offer that continues to be a thorn in your side?
This section isn’t about dwelling on negative aspects. Rather, it’s critical to foresee any potential obstacles that could mitigate your success.
When identifying weaknesses, consider what areas of your business are the least profitable, where you lack certain resources, or what costs you the most time and money. Take input from employees in different departments, as they’ll likely see weaknesses you hadn’t considered.
If you’re examining a new social media strategy, you might start by asking yourself these questions: First, if I were a consumer, what would prevent me from buying this product, or engaging with this business? What would make me click away from the screen?
Second, what do I foresee as the biggest hindrance to my employees’ productivity, or their ability to get the job done efficiently? What derails their social media efforts?
6. Consider your opportunities.
This is your chance to dream big. What are some opportunities for your social media strategy you hope, but don’t necessarily expect, to reach?
For instance, maybe you’re hoping your Facebook ads will attract a new, larger demographic. Maybe you’re hoping your YouTube video gets 10,000 views and increases sales by 10%.
Whatever the case, it’s important to include potential opportunities in your SWOT analysis. Ask yourself these questions:
- What technologies do I want my business to use to make it more effective?
- What new target audience do I want to reach?
- How can the business stand out more in the current industry?
- Is there something our customers complain about that we could fix?
The opportunities category goes hand-in-hand with the weaknesses category. Once you’ve made a list of weaknesses, it should be easy to create a list of potential opportunities that could arise if you eliminate your weaknesses.
7. Contemplate your threats.
It’s likely, especially if you’re prone to worry, you already have a good list of threats in your head.
If not, gather your employees and brainstorm. Start with these questions:
- What obstacles might prevent us from reaching our goals?
- What’s going on in the industry, or with our competitors, that might mitigate our success?
- Is there new technology out there that could conflict with our product?
Writing down your threats helps you evaluate them objectively.
For instance, maybe you list your threats in terms of least and most likely to occur and divide and conquer each. If one of your biggest threats is your competitor’s popular Instagram account, you could work with your marketing department to create content that showcases your product’s unique features.
SWOT Analysis Chart
A SWOT analysis doesn’t have to be fancy. Our SWOT analysis chart provides a clear and structured framework for capturing and organizing your internal strengths and weaknesses, and external opportunities and threats. It’s the perfect visual aid to make sense of the wealth of information gathered during your analysis.
(Plus, you can always customize and paste it into a document you plan to share with stakeholders.)
But remember: Filling out the SWOT chart is just one step in the process. Combine it with our entire market research kit, and you’ll have all the tools necessary to help your organization navigate new opportunities and threats.
SWOT Analysis Examples
The template above helps get you started on your own SWOT analysis.
But, if you’re anything like me, it’s not enough to see a template. To fully understand a concept, you need to see how it plays out in the real world.
These SWOT examples are not exhaustive. However, they are a great starting point to inspire you as you do your own SWOT analysis.
Apple’s SWOT analysis
Here’s how we’d conduct a SWOT analysis on Apple.
First off, strengths. While Apple has many strengths, let’s identify the top three:
- Brand recognition.
- Innovative products.
- Ease of use.
Apple’s brand is undeniably strong, and its business is considered the most valuable in the world. Since it’s easily recognized, Apple can produce new products and almost ensure a certain degree of success by virtue of the brand name itself.
Apple’s highly innovative products are often at the forefront of the industry. One thing that sets Apple apart from the competition is its product inter-connectivity.
For instance, an Apple user can easily sync their iPhone and iPad together. They can access all of their photos, contacts, apps, and more no matter which device they are using.
Lastly, customers enjoy how easy it is to use Apple’s products. With a sleek and simple design, each product is developed so that most people can quickly learn how to use them.
Next, let’s look at three of Apple’s weaknesses.
- High prices
- Closed ecosystem
- Lack of experimentation
While the high prices don’t deter Apple’s middle- and upper-class customer base, they do hinder Apple’s ability to reach a lower-class demographic.
Apple also suffers from its own exclusivity. Apple controls all its services and products in-house, and while many customers become loyal brand advocates for this reason, it means all burdens fall on Apple employees.
Ultimately, Apple’s tight control over who distributes its products limits its market reach.
Lastly, Apple is held to a high standard when it comes to creating and distributing products. Apple’s brand carries a high level of prestige. That level of recognition inhibits Apple from taking risks and experimenting freely with new products that could fail.
Now, let’s take a look at opportunities for Apple.
It’s easy to recognize opportunities for improvement, once you consider Apple’s weaknesses. Here’s a list of three we came up with:
- Expand distribution options.
- Create new product lines.
- Technological advancement.
One of Apple’s biggest weaknesses is its distribution network, which, in the name of exclusivity, remains relatively small. If Apple expanded its network and enabled third-party businesses to sell its products, it could reach more people globally, while alleviating some of the stress currently put on in-house employees.
There are also plenty of opportunities for Apple to create new products. Apple could consider creating more affordable products to reach a larger demographic, or spreading out into new industries — Apple self-driving cars, perhaps?
Finally, Apple could continue advancing its products’ technology. Apple can take existing products and refine them, ensuring each product offers as many unique features as possible.
Finally, let’s look at threats to Apple.
Believe it or not, they do exist.
Here are three of Apple’s biggest threats:
- Tough competition.
- International issues.
Apple isn’t the only innovative tech company out there, and it continues to face tough competition from Samsung, Google, and other major forces. In fact, Samsung sold more smartphones than Apple did in Q1 of 2022, shipping 17 million more units than Apple and holding 24% of the market share.
Many of Apple’s weaknesses hinder Apple’s ability to compete with the tech corporations that have more freedom to experiment, or that don’t operate in a closed ecosystem.
A second threat to Apple is lawsuits. Apple has faced plenty of lawsuits, particularly between Apple and Samsung. These lawsuits interfere with Apple’s reputable image and could steer some customers to purchase elsewhere.
Finally, Apple needs to improve its reach internationally. The company isn’t number one in China and doesn’t have a very positive relationship with the Chinese government. In India, which has one of the largest consumer markets in the world, Apple’s market share is low, and the company has trouble bringing stores to India’s market.
If Apple can’t compete globally the way Samsung or Google can, it risks falling behind in the industry.
Starbucks SWOT Analysis
Now that we’ve explored the nuances involved with a SWOT analysis, let’s fill out a SWOT template using Starbucks as an example.
Here’s how we’d fill out a SWOT template if we were Starbucks:
Restaurant Small Business SWOT Analysis
Some small business marketers may have difficulty relating to the SWOTs of big brands like Apple and Starbucks. Here’s an example of how a dine-in Thai restaurant might visualize each element.
Small restaurants can lean into their culinary expertise and service skills to find opportunities for growth and brand awareness. A SWOT analysis can also help identify weaknesses that can be improved, such as menu variation and pricing.
While a restaurant might not be as worried about high-level lawsuits, a small business might be more concerned about competitors or disruptors that might enter the playing field.
Local Boutique SWOT Analysis
In another small business example, let’s take a look at a SWOT analysis for a local boutique.
This shop might be well known in its neighborhood, but it also might take time to build an online presence or get its products in an online store.
Because of this, some of its strengths and opportunities might relate to physical factors while weaknesses and threats might relate to online situations.
How to Act on a SWOT Analysis
After conducting a SWOT analysis, you may be asking yourself: What’s next?
Putting together a SWOT analysis is only one step. Executing the findings identified by the analysis is just as important — if not more.
Put your insights into action using the following steps.
Take advantage of your strengths.
Use your strengths to pursue opportunities from your analysis.
For example, if we look at the local boutique example above, the strength of having affordable prices can be a value proposition. You can emphasize your affordable prices on social media or launch an online store.
Address your weaknesses.
Back to the boutique example, one of its weaknesses is having a poor social media presence. To mitigate this, the boutique could hire a social media consultant to improve its strategy. They may even tap into the expertise of a social-savvy employee.
Make note of the threats.
Threats are often external factors that can’t be controlled, so it’s best to monitor the threats outlined in your SWOT analysis to be aware of their impacts on your business.
When to Use a SWOT Analysis
While the examples above focus on business strategy in general, you can also use a SWOT analysis to evaluate and predict how a singular product will play out in the market.
Ultimately, a SWOT analysis can measure and tackle both big and small challenges, from deciding whether or not to launch a new product to refining your social media strategy.
Editor’s note: This post was originally published in May 2018 and has been updated for comprehensiveness.