SWOT analysis

Swot analysis involves the collection and portrayal of information about internal and external factors which have, or may have, an impact on business.

SWOT is a framework that allows product managers to synthesize insights obtained from an internal analysis of the company’s strengths and weaknesses with those from an analysis of external opportunities and threats.

Understanding the tool

What is the SWOT analysis? The answer to the question is simple: it’s a tool used for situation (business or personal) analysis! SWOT is an acronym which stands for:

Strengths: factors that give an edge for the company over its competitors.
Weaknesses: factors that can be harmful if used against the firm by its competitors.
Opportunities: favourable situations which can bring a competitive advantage.
Threats: unfavourable situations which can negatively affect the business.

Strengths and weaknesses are internal to the company and can be directly managed by it, while the opportunities and threats are external and the company can only anticipate and react to them. Often, swot is presented in the form of a matrix as in the illustration below:

Benefits

Swot tool has 5 key benefits:

• Simple to do and practical to use;
• Clear to understand;
• Focuses on the key internal and external factors affecting the company;
• Helps to identify future goals;
• Initiates further analysis.

Limitations

Although there are clear benefits of doing the analysis, many managers and academics heavily criticize or don’t even recognize it as a serious tool.[2] According to many, it is a ‘low-grade’ analysis. Here are the main flaws identified by research:

• Excessive lists of strengths, weaknesses, opportunities and threats;
• No prioritization of factors;
• Factors are described too broadly;
• Factors are often opinions, not facts;
• No recognized method to distinguish between strengths and weaknesses, opportunities and threats.

Sukant Kumar is a Product / Marketing leader in tech. I am passionate about tech and product and creating memorable user experiences. Connect with me on LinkedIn, mentioning this story. If you liked this story do let me know in comments and don’t forget to clap a dozen times 😎