SWOT analysis is a framework invented by Albert Humphrey of Stanford University in the 1960s and 1970s. It was established using data from some of the world’s leading companies of the time who were involved in long-term planning processes.
SWOT helps businesses examine and assess what their strengths and weaknesses are in the context of existing opportunities and threats, and to devise a long-term strategy for assessing shortcomings that are holding back progress and growth.
The framework is made up of four constituent elements:
- Strengths
What does your product or service excel at, and what makes it stand out from the competition? These are the things that attract new customers. - Weaknesses
What’s standing in the way of stopping you from performing at your optimum? These are areas where you need to improve to remain competitive. - Opportunities
What are the external factors that could give you a competitive advantage? These are the things you could use to promote long-term growth. - Threats
What are the external factors that could harm you? These are the things that could prevent long-term growth.
When used correctly, a SWOT analysis can deliver valuable insights into a business’s current position and develop the right solutions for current and future challenges.
