SWOT Analysis explained

SWOT Analysis is a strategic planning tool used to understand the internal and external factors that can impact a business, project, or idea. The acronym stands for Strengths, Weaknesses, Opportunities, and Threats. Strengths and weaknesses are internal factors (like skills, resources, or limitations), while opportunities and threats come from the outside environment (like market trends or competition). By organizing thoughts into these four categories, individuals or teams can make more informed decisions and create better strategies.

The concept was first developed in the 1960s by Albert Humphrey, a business and management consultant at the Stanford Research Institute. He led a research project that aimed to find out why corporate planning often failed, and SWOT was one of the key outcomes of that work.

SWOT is widely used in business because it’s simple, effective, and versatile. Whether you’re launching a new product, entering a new market, improving operations, or just checking in on business health, SWOT can help identify what’s working, what’s not, what future opportunities exist, and what risks need attention. It encourages clear thinking and can guide both short-term actions and long-term strategy.

Advice: For best results, involve a group of people with different perspectives when doing a SWOT analysis—this often leads to a more complete and honest picture. Also, don’t just stop at making the list—turn the insights into actions. Use your strengths to take advantage of opportunities, improve or manage your weaknesses, and prepare for possible threats.

Subscribe and commit to learn the Language of Business.

source