What is a SWOT analysis?
A SWOT analysis is a planning framework that a business can use to identify a strategic endeavor’s strengths, weaknesses, opportunities, and threats. The term SWOT is an acronym for these four factors.
In a SWOT analysis, a project’s (or product’s) strengths and weaknesses are internal factors. Strengths might include the company’s domain expertise or intellectual property. Weaknesses might include missing skillsets or a lack of budget. Opportunities and threats, by contrast, are external and refer to competition, the market, or changing trends that could affect the company.
SWOT analysis examples
Businesses can use SWOT analysis to help decide if and how to move forward with any type of strategic project; such as developing a new product line or entering a new market.
How does a SWOT analysis work?
An organization or team should conduct a SWOT analysis in the early stages of any new large-scale strategic endeavor.
This execution will vary by company and industry, but here is an overview of the basic steps involved.
Step 1: Identify the objective.
This could include launching a new product, building out a new staff, or responding to competitive or market pressure by adding new functionality to your existing solution.
Step 2: Assemble your team.
A SWOT analysis is a team undertaking and should involve the right people. This will probably include the leadership team and the people directly involved in the project. But SWOT analyses also benefit from varied perspectives, which means they should include people across the organization including sales and support professionals.
Step 3: Build your SWOT matrix.
This is a simple, two-by-two grid like the one shown here. It should include boxes labeled strengths, weaknesses, opportunities, and threats.
Step 4: Fill in the grid.
Now your team can begin brainstorming, discussing, offering their thoughts on each of these four categories in relation to the proposed new project.
The points you list under each category can be based on data, or they can be anecdotal. They can be a fact or opinion. But they should all be clear and concise, ideally in bullet form, so that everyone can review them quickly when the grid is complete.
Step 5: Talk it out—and draw conclusions.
In this final step, your team will examine your completed SWOT matrix, and discuss what all of the details mean for the proposed project. The strategic question you will need to answer is whether or not the potential strengths and opportunities are likely to outweigh the weaknesses and threats your SWOT analysis revealed.
How can product managers use a SWOT analysis?
Product managers can use a SWOT analysis for several areas of valuable business intelligence about their products, including:
- To learn how an existing product is performing in the market
- To determine whether or not developing a new product makes strategic sense
- To decide whether or not it will be feasible to enter a new market
Product managers can also use SWOT to quickly communicate to stakeholders where they stand today with their existing product line and with products under development.
A SWOT analysis is a valuable planning framework that any team within an organization can use to quickly get a sense of the feasibility of moving forward with a new project. The SWOT matrix is easy to build, completing the matrix can lead to the use of brainstorming and ideas, and the entire process is quick and simple. We recommend using a SWOT analysis for any important strategic undertaking at your company.