what is swot analysis 
swot strengths weaknesses opportunities and threats analysis is a framework used to evaluate a company s competitive position and to develop strategic planning swot analysis assesses internal and external factors as well as current and future potential a swot analysis is designed to facilitate a realistic fact based data driven look at the strengths and weaknesses of an organization initiatives or within its industry understanding swot analysisswot analysis is a technique for assessing the performance competition risk and potential of a business as well as part of a business such as a product line or division an industry or other entity using internal and external data the technique can guide businesses toward strategies more likely to be successful and away from those in which they have been or are likely to be less successful independent swot analysts investors or competitors can also guide them on whether a company product line or industry might be strong or weak and why swot analysis was first used to analyze businesses now it s often used by governments nonprofits and individuals including investors and entrepreneurs there is seemingly limitless applications to the swot analysis components of swot analysisinvestopedia julie bangevery swot analysis will include the following four categories though the elements and discoveries within these categories will vary from company to company a swot analysis is not complete without each of these elements strengths describe what an organization excels at and what separates it from the competition a strong brand loyal customer base a strong balance sheet unique technology and so on for example a hedge fund may have developed a proprietary trading strategy that returns market beating results it must then decide how to use those results to attract new investors weaknesses stop an organization from performing at its optimum level they are areas where the business needs to improve to remain competitive a weak brand higher than average turnover high levels of debt an inadequate supply chain or lack of capital opportunities refer to favorable external factors that could give an organization a competitive advantage for example if a country cuts tariffs a car manufacturer can export its cars into a new market increasing sales and market share threats refer to factors that have the potential to harm an organization for example a drought is a threat to a wheat producing company as it may destroy or reduce the crop yield other common threats include things like rising costs for materials increasing competition tight labor supply and so on swot tableanalysts present a swot analysis as a square segmented into four quadrants each dedicated to an element of swot this visual arrangement provides a quick overview of the company s position although all the points under a particular heading may not be of equal importance they all should represent key insights into the balance of opportunities and threats advantages and disadvantages and so forth the swot table is often laid out with the internal factors on the top row and the external factors on the bottom row in addition the items on the left side of the table are more positive favorable aspects while the items on the right are more concerning negative elements 