A SWOT analysis is an objective planning tool used to evaluate a company's competitive position. It is designed to provide a realistic, fact-based, data-driven look at a company's strengths, weaknesses, opportunities, and threats. To keep the analysis accurate, avoid pre-conceived beliefs or gray areas and focus instead on real-life contexts. A SWOT should be used as a guide and not necessarily as a prescription.
The SWOT analysis is typically depicted as a square segmented into four quadrants, each dedicated to a SWOT element. This visual arrangement provides a quick overview of a company’s position.
Strengths:
Are a company's internal resources and capabilities that can be used for developing a competitive advantage, such as brand recognition or great customer service.
Weaknesses:
Are a company's internal factors that affect how the business performs. These factors are within the control of the company to be fixed such as low company morale or poor quality control.
Opportunities:
Are external factors that may give a company a competitive edge or be used to its advantage such as public need or inexpensive building materials. To see examples of opportunities, check out this page on Simplicable: "23 Examples of SWOT Opportunities".
Threats:
Are external changes that negatively affects your company such as bad publicity or slow economy.
The following is an example of a SWOT chart:
![](https://lh4.googleusercontent.com/15TOQBfGwAWfbcrt8_zrbPLx8isF6O5c0g8-5XBvQdbFVHKwKTOQl6vEkGF482Vi26w7yegF3xuYFh6JMB1_jXbnAffH-LlMDNeGE59z_CYjzcODqULlenAApRWuKA5PASboSPmpPEkicZnS8XZDjhk)
Remember, the SWOT analysis is meant to be an objective summary tool. Any analysis which lacks good information will result in a biased viewpoint, and may cause you to reach the wrong conclusion.