Strategy
SWOT analysis
A structured analysis of internal strengths and weaknesses and external opportunities and threats, used to generate strategic options.
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SWOT analysis vs SWOT analysis (Andrews)
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Strategy
SWOT analysis (Andrews)
SWOT analysis is ubiquitous. It pops up all over the place, in market research reports, stockbroker analyst reports, even in financial due diligence.
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Use this when.
Use SWOT when a team needs a shared view of its strategic situation before choosing what to do. Common applications include:
Use SWOT to prompt and organise an initial discussion of issues, sometimes alongside 5C situation analysis. It is most useful when participants understand its limitations. For a more disciplined route from question to answer, consider Issue analysis (Minto).
Extracted signals
Strengths, limits, and pitfalls.
SWOT analysis
- Require every factor to pass two tests: it must be supported by evidence, and it must be capable of changing the decision. This keeps SWOT concise and strategic.
Watch for
- Do not mistake brainstorming for analysis. Long, unprioritised lists—especially lists based only on internal opinion—create an illusion of completeness without producing a defensible choice.
SWOT analysis (Andrews)
- State the desired future as a goal, then define numerical objectives that make progress towards it observable.
- Construct SWOT as a 2 2 matrix. Place internal factors under Strengths and Weaknesses, and external conditions under Opportunities and Threats.
- The distinction matters because managers can usually act more directly on internal factors than on external conditions. The strategic objective is to find a credible fit between the firm’s resources and competences and the opportunities available in its market.
Watch for
- Do not expect four lists to formulate a strategy. SWOT is too general to establish impact, priority or a course of action without further analysis.
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