SWOT Analysis Method And Examples

The SWOT (strength, weakness, opportunity, threats) analysis is one of the most popular models used to analyse new business startups. It was devised back in 1960 and has remained relatively the same since then helping different kinds of businesses to curve their niche and take advantage of their strengths.

In a business context, SWOT analysis is perfect for creating a niche market; in a personal context, it helps in career development in a way that utilises existing talent, ability and opportunities. Business SWOT analysis is primarily used to identify four major things; strengths, weaknesses, opportunities and threats. It helps you to uncover opportunities and use your strengths in exploiting them while identifying ways to manage and eliminate threats.

Using the tool
The SWOT analysis can be used for initial strategy formulation as well as expansion into new areas and markets. Strengths and weaknesses are often issues relating to internal business factors while opportunities and threats are related to external factors. For this reason SWOT is sometimes referred to as Internal-External analysis or IE matrix. As developed by Albert Humphrey back in the 60s the SWOT analysis helps you answer unique sets of questions in these four areas as follows;

A) Business strengths

As aforementioned, strengths are internal factors and must be considered from an internal aspect of your business, or the customer’s point of view and how the people in the market view your company. Some of the questions to ponder include the following;• What are some of the advantages your organisation has?
• In what area does your business perform better than others?
• Does your business have unique low-cost resources that others don’t?
• What strengths do the people in your market see in your business?
• What is the unique selling position (USP) of your organization?
• What factors guarantee you sales?
When reviewing your strengths, look at them in comparison to your competitors. For instance, if your competitors offer exceptional customer service, then it seizes to be strength and becomes a necessity.

B) Business weaknesses

These are also internal factors which must be reviewed in comparison to competition. Ask yourself the following questions;
• Is there an area you can improve?
• Are there things you should avoid?
• What factors are losing you sales?
• What weaknesses do people see in your organization?
Look at the areas which competitors perform better than you and face all the unpleasant truths and shortcomings of your business as early as possible.

C) Business opportunities

Opportunities are external to your business which means you must open your eyes wider and find them.
• Do you spot any good opportunities? List them down
• Are you aware of any interesting trends in the market?
• Are there any changes in technology that you can tap?
• Are there any changes in government policies that impact your field?
• Are there any changes in population profiles, social patterns or lifestyle changes?
• What local events and traditions present opportunities for your business?
It is advisable to look at your strengths to see whether they open up opportunities, and also the weaknesses you can eliminate to create more opportunities.

D) Business threats

Some of the issues to ponder when analysing your business threats in a SWOT analysis include the following questions;
• What are some of the obstacles your business faces?
• What are your competitors doing so well?
• Are there any changes in quality standards or specification requirements for your products, services or job?
• Are changes in technology a threat to your current position?
• Are you having debts or cashflow issues and problems?
• Are your weaknesses threatening the business?

Analyzing opportunities and threats if often combined with another analysis known as PEST (or PESTEL). It involves looking at the political, economical, social, technological, environmental and legal factors that affect your business; all these are external factors that may boost or daunt the success of your business.

SWOT analysis examples
If you are planning to start a business offering consultancy services, you may draw up the following in your SWOT analysis.

1. We do not need any upper management approval and can respond very quickly
2. We have an exceptional customer service unit and out small workload allows us to devote to each customer
3. We have an old premise with various furniture and appliances needing limited renovations
4. Our lead professional consultants have the best reputations in the market
5. We offer good value to customers due to low overheads
6. It is effortless to quickly change direction if our marketing is not producing results
1. We still have little market presence and no recognized reputation
2. Our small staff suffers shallow skill base in various areas
3. We are vulnerable to staff falling sick and cannot sustain high turnovers
4. The early stages will feature unreliable cashflow
1. Our field is expanding with many areas to exploit in the future
2. The local government is poised to encourage local business
3. Unlike us, our competitors are slow to adopting new technologies
1. If our large competitor changes direction, our position may be wiped out
2. Developments in technology may become too rapid for our business to adapt

Once you have made this analysis, the next important thing is decision making which is at the root of any SWOT analysis. Going by this example, you may decide to invest in rapid response and offering top value services to local government and business. You can select local publications to market your business and stay up-to-date with emerging technologies in your field.


A SWOT analysis is very important before you start any business if you want it to be a complete success. It is aimed at ultimate segmentation of the market by curving a niche and dedicating your resources towards satisfying the needs of your customers while keeping an edge over competition. SWOT analysis is never a one-time process and you must establish a schedule to review your strengths, weaknesses, opportunities and threats from time to time. The market is quite dynamic and today’s strengths may quickly vanish when new competitors come to the market or reputable brands change direction. For instance, the recent rumour about Google preparing for their own branded smartphones is a threat to existing manufacturers like Samsung and Apple who now have to re-evaluate their advantages and competitive edges. SWOT analysis is simply what you need for your business to be productive.

Post Tagged with ,

About Carol Lopez