Glossary: SWOT analysis

What is a SWOT analysis?

SWOT is an acronym that stands for Strength, Weakness, Opportunity and Threat. So, the SWOT analysis is a framework for identifying and analyzing the internal and external factors that can have an impact on the viability of a project, product, place or person.

Originally, the SWOT analysis was developed for business and industry, but it’s also useful in the work of community health and development, education and even for personal growth.

The SWOT is particularly powerful, because with the SWOT analysis we get an overview of the actual situation of the enterprise, enabling maximize and take advantage of our opportunities and strengths, and minimize or eliminate the threats and weaknesses of the company.

A SWOT analysis focuses on the four elements included in the acronym, allowing companies to identify the forces influencing a strategy, action or initiative. Therefore, as its name states, the SWOT analysis examines the next elements:

Strengths: are the special abilities available of the company and this allows you to have a privileged position against the competition. Control resources, skills and abilities that are possessed or activities developed positively, for example. You have to answer the following questions:

  • What you can do well?
  • How you stand apart from your competitors?
  • What is your Unique Selling Proposition (USP)?
  • What characteristics of your business give you an advantage over others?

Weaknesses: are those factors that cause an unfavorable position against the competition like resources are lacking, not possess skills or activities that don’t develop positively. You have to answer the following questions:

  • What could you improve?
  • What does your business lack?
  • What should you avoid?
  • What characteristics place you at a disadvantage?

Opportunities: are those factors that are positive, favorable, exploitable, to be discovered in the environment in which the company operates, and enable competitive advantages. You have to answer the following questions:

  • What opportunities exist in your market?
  • Is the perception of your business positive?
  • What interesting trends are you aware of?
  • What upcoming events could benefit the business?

Threats: They are situations that come from the environment and can even attempt against the permanence of the organization. You have to answer the following questions:

  • Who are your potential competitors?
  • Which factors you need to control to prevent the risks to your business?
  • Is there anything deteriorating your profits?
  • Are there any elements in the environment that could harm the project?


Strengths and weaknesses are
internal factors of the organization, so it’s possible to act directly on them. Nevertheless, opportunities and threats are external, and should take special care because they are uncontrollable by the company and directly influence its development.

So, the most important part is the evaluation of the strengths and weaknesses, opportunities and threats, as well as drawing conclusions. Often, SWOT is presented in a form of a matrix as in the illustration below:

swot

So, the answer to the question is very simple: the SWOT analysis is a tool used for situation analysis. The objective of the SWOT analysis is to leverage the strengths to make the most of the opportunities offered by the market, and reducing threats detected and correcting or eliminating the weaknesses. And for this reason, the SWOT analysis has been adopted by organizations to making decisions.

And to sum up, with the aim of making clearer and easy to understand the explanation, I would like to show an example of SWOT analysis of our customer Vida Festival:

PHOTO

Clàudia Llopis

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