A SWOT analysis is a simple tool to help you work out the internal and external factors that affect what you do. It is one of the most commonly used business analysis and decision-making tools.

A SWOT (strengths, weaknesses, opportunities, and threats) analysis helps you:

  • Build on strengths (S)
  • Minimize weakness (W)
  • Seize opportunities (O)
  • Counteract threats (T)

To get the most out of a SWOT analysis, you need to conduct it with a particular objective in mind. For example, a SWOT analysis can help you decide if you should introduce a new degree or service or change your processes.

A SWOT analysis is often part of strategic planning. It can help you better understand what you do and work out what areas need improving. It can also help you understand your market and predict changes that you will need to address to make sure you are successful. It is also a particularly useful step in your promotional planning process.

The following guide provides an overview of what a SWOT analysis involves and how to conduct one

Uses of SWOT Analysis

A SWOT analysis looks at internal and external factors that can affect what you do. Internal factors are your strengths and weaknesses. External factors are the threats and opportunities.

Strategic Planning, Brainstorming, and Decision Making

A SWOT analysis is a useful tool for brainstorming and strategic planning. You'll get more value from a SWOT analysis if you conduct it with a specific objective or question in mind.

For example, you can use a SWOT analysis to help you decide if and how you should:

  • take advantage of a new opportunity
  • respond to new trends
  • implement new technology

Building on Strengths

A SWOT analysis will help you identify areas that are performing well. These areas are your critical success factors.

Identifying these strengths can help you make sure you maintain them so you don't lose your competitive advantage. Growing what you do involves finding ways of using and building on these strengths.

Minimizing Weaknesses

Weaknesses are the characteristics that put you at a disadvantage to others. Conducting a SWOT analysis can help you identify these characteristics and minimize or improve them before they become a problem. When conducting a SWOT analysis, it is important to be realistic about the weaknesses in what you do so you can deal with them adequately.

Seizing Opportunities

A SWOT analysis can help you identify opportunities that you could take advantage of. Opportunities are created by external factors, such as new trends and changes in the market.

Conducting a SWOT analysis will help you understand the internal factors (your strengths and weaknesses) that will influence your ability to take advantage of a new opportunity. If you don’t have the capability to seize an opportunity but decide to anyway, it could be damaging. Similarly, if you do have the capability to seize an opportunity and don't, it could also be damaging.

Counteracting Threats

Threats are external factors that could cause problems, such as changes to the market or new government policy. A SWOT analysis can help you identify threats and ways to counteract them, depending on your strengths and weaknesses.

Addressing Individual Issues

You can conduct a SWOT analysis to address individual issues, such as:

  • Staffing issues
  • University culture and image
  • New degrees
  • Organizational structure
  • Financial resources
  • Operational efficiency

When you're conducting an individual SWOT analysis, keep in mind that a strength for one issue might be a weakness for another. You might also identify a weakness, such as a gap that you're not covering.

Benefits and limitations of SWOT Analysis

A SWOT analysis can help you identify and understand key issues, but it does not necessarily offer solutions. You should be aware of the limitations as well as the benefits of a SWOT analysis before you decide to conduct one. Knowing what you can reasonably expect to achieve will make the SWOT analysis more useful, and will save you time. Ultimately, you must be prepared to spend the time to review your SWOT analysis and use it to determine the best way forward.

Benefits of SWOT Analysis

The main advantages of conducting a SWOT analysis is that it has little or no cost - anyone who understands what you do can perform a SWOT analysis. You can also use a SWOT analysis when you don't have much time to address a complex situation. This means that you can take steps towards improving what you do without the expense of an external consultant or adviser.

Another advantage of a SWOT analysis is that it concentrates on the most important factors affecting what you do.

Using a SWOT, you can:

  • Understand your area better
  • Address weaknesses
  • Deter threats
  • Capitalize on opportunities
  • Take advantage of your strengths
  • Develop goals and strategies for achieving them

Limitations of SWOT Analysis

When you are conducting a SWOT analysis, you should keep in mind that it is only one stage of the planning process. For complex issues, you will usually need to conduct more in-depth research and analysis to make decisions.

Keep in mind that a SWOT analysis only covers issues that can definitely be considered a strength, weakness, opportunity or threat. Because of this, it's difficult to address uncertain or two-sided factors, such as factors that could either be a strength or a weakness or both, with a SWOT analysis (e.g. you might have a prominent location, but expansion/building may be expensive).

A SWOT analysis may be limited because it:

  • Doesn't prioritize issues
  • Doesn't provide solutions or offer alternative decisions
  • Can generate too many ideas but not help you choose which one is best
  • Can produce a lot of information, but not all of it is useful

Tips for a Successful SWOT Analysis

Before conducting a SWOT analysis, decide what you want to achieve with it and consider whether it is the best tool for your needs.

If you decide a SWOT analysis is the best tool, the following tips will help you get the most out of it.

  • Keep your SWOT short and simple, but remember to include important details. For example, if you think your staff are a strength, include specific details about why they are a strength and how they can help you meet your goals.
  • When you finish your SWOT analysis, prioritize the results by listing them in order of the most significant factors that affect what you do to the least.
  • Get multiple perspectives on what you do for your SWOT analysis. Ask for input from your employees, students, and community partners.
  • Apply your SWOT analysis to a specific issue, such as a goal you would like to achieve or a problem you need to solve, rather than to your entire unit. You may then conduct separate SWOT analyses on individual issues and combine them.
  • Look at where your unit, department, area, or program is now and think about where it might be in the future, as well as where you would like to be.
  • Think about the factors that are essential to the success of what you do, and the things you may offer students or internal clients that others don't. This is your competitive advantage. It's useful to keep these in mind when conducting a SWOT analysis.
  • Use goals and objectives from your overall unit, department, area, or program plan in your SWOT analysis.

Conducting a SWOT analysis

A SWOT analysis is a tool for documenting internal strengths and weaknesses in your organization, unit, department, area, or program, as well as external opportunities and threats. You can use this information in your planning to help achieve your goals. To work out if something is an internal or external factor, ask yourself if it would exist even if your organization, unit, department, area, or program didn't. If it would, then it's an external factor (e.g. new technology).

Use the following eight steps to conduct a SWOT analysis:

1. Decide on the objective of your SWOT analysis

To get the most out of your SWOT analysis, you should have a question or objective in mind from the start. For example, you could use a SWOT analysis to help you decide if you should introduce a new degree or service, or change your processes.

2. Research your industry and market

Before you begin the SWOT analysis you need to do some research to understand your industry and market. Get a range of perspectives by talking to your staff, other employees at the university, students, and applicable members of the community. Also, conduct some market research and find out about your competitors.

3. List your strengths

The first step is to identify and list what you think are your strengths. Examples could include strengths relating to employees, financial resources, your location, cost advantages, and competitiveness.

At this stage of the SWOT analysis, the list does not need to be definitive. Any ideas and thoughts are encouraged. Step seven is where the list is prioritized.

4. List your weaknesses

List things in your organization, unit, department, area, or program that you consider being weaknesses (i.e. that put you at a disadvantage to others). Weaknesses could include an absence of new degrees or students, staff absenteeism, a lack of intellectual property, and declining market share.

Make sure you address the weaknesses raised in your SWOT analysis. The list of weaknesses can indicate how your organization, unit, department, area, or program has grown over time. When you review the SWOT analysis after a year, you may notice that your weaknesses have been resolved. While you may find new weaknesses, the fact that the old ones are gone is a sign of progress.

5. List potential opportunities for your organization, unit, department, area, or program

Think about the possible external opportunities for your organization, unit, department, area, or program. These are not the same as your internal strengths, and are not necessarily definite - an opportunity for one aspect of your area could be a threat to another (e.g. you may consider introducing a new degree to keep up with trends, but your competitors may already have a similar degree). Keep this in mind, but for the SWOT analysis, the same item shouldn't be listed as both an opportunity and a threat. Opportunities could include new technology, training programs, partnerships, a diverse marketplace, and a change of government.

6. List potential threats to your organization, unit, department, area, or program

List external factors that could be a threat or cause a problem for your area. Examples of threats could include, increasing competition, reduction of financial aid for students, lack of grant funding, and the uncertainty of student attendance.

7. Establish priorities from the SWOT

When you have completed the steps above, you will have four separate lists. Ideally, these lists can be displayed side-by-side so you can have an overall picture of how your area is running and what issues you need to address. You can then work out what issues are the most important and what can be dealt with later (i.e. develop four prioritized lists).

8. Develop a strategy to address issues in the SWOT

Review your four prioritized lists by asking:

  • How can we use our strengths to take advantage of the opportunities identified?
  • How can we use these strengths to overcome the threats identified?
  • What do we need to do to overcome the identified weaknesses in order to take advantage of the opportunities?
  • How will we minimize our weaknesses to overcome the identified threats?

Once you have answered these questions and finalized your lists, you can now use the SWOT analysis to develop strategies for achieving your goals.

Example SWOT Analysis

The following is an example of a SWOT analysis conducted by a college or university trying to decide if they should introduce a new program. The SWOT analysis does not cover the entire organization, just the factors that may influence their ability to introduce a new program.

To get the most out of the SWOT, they have made specific statements in each category. For example, rather than simply list 'competitors' as a threat, they have included specific details about how their competitors are a threat.

Internal Environment

Strengths (S)

  • Excellent faculty-to-student ratio
  • A good relationship with students and the community
  • Good internal communications
  • High traffic location
  • Reputation for innovation

Weaknesses (W)

  • Currently struggling to meet deadlines - too much work?
  • High building costs for infrastructure
  • Market research data may be out of date
  • Budget challenges
  • Poor record keeping

External Environment

Opportunities (O)

  • High demand for the programs we offer
  • Loyal alumni
  • Community outreach
  • Grant funding

Threats (T)

  • Competing institution with the same program at more convenient times for students
  • Insufficient number of instructors for the subject
  • Lack of financial aid availability
  • An upturn in the economy may mean people are less likely to think they need more education

Review the SWOT Analysis

In the above example, each category of this SWOT analysis could be expanded. The organization may then assess the results to decide if they can use their strengths to take advantage of the opportunities and introduce the new program. After assessing the results, they may decide that the weaknesses and threats need to be addressed before they may make any changes to their existing offerings.

When you have completed your SWOT analysis you should review the results to help you decide the next step for what you do.