SWOT explained

What is a SWOT analysis and what is it used for? ​

The SWOT analysis is one of the most common tools in business planning and strategy. The SWOT analysis helps you understand the internal and external advantages and disadvantages of your organisation. This understanding should inform your strategies, and it can help you improve, innovate, and anticipate certain issues. A good SWOT helps you to make the right decisions related to your products and services. You may, for example, decide to change your target, adapt the budget or hire more employees to meet certain needs that are unfulfilled.


What are the main components of a SWOT analysis?​

SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats. In the analysis, you evaluate each of these factors for your organisation.

Strengths: Internal attributes and resources that give your organisation a competitive advantage in the market. 

  • What makes your company better than others in the same industry?
  • What is unique about your products and services?
  • What resources do you have access to that can be used to your advantage?

Weaknesses: Internal attributes that could create disadvantages. These are points where your organisation may need to improve.

  • What are the biggest obstacles to further growth for your company?
  • What issues are your clients facing with your product or service?
  • What do your competitors do better than your organisation?

Opportunities: External factors that the organisation can take advantage of. You will want to tap into these opportunities with your strategies.


  • What are the main communication channels that your audience likes? How can you get more people to relate to your message/brand?
  • Is there a noticeable or anticipated rise in demand for a product or service that you can offer?
  • What political, economic, social, technological, environmental and legal factors can you take advantage of right now? (See: PESTEL analysis)

Threats: External factors that could hurt your organisation.


  • What is the status of the market? Are there external threats to growth like intense competition or low demand?
  • Are there any current or anticipated rises in the price of raw materials or labour that could affect your organisation?
  • What political, economic, social, technological, environmental and legal factors may threaten your organisation’s growth? (See: PESTEL analysis)

How do I enhance my SWOT analysis into a POWER SWOT?

The POWER SWOT is a method to enhance your SWOT analysis and determine the factors that are most urgent to respond to in your strategic plan. POWER is an acronym for Personal experience, Order/organise, Weighting, Emphasise detail, and Rank and prioritise.

The purpose of this is to take you from the analysis stage to defining your three most important strategic actions. The POWER acronym stands for five actions taken in that process.

  • Personal experience. Here, people relevant to various dimensions of the strategic plan bring their own knowledge, skills, and experiences to the table. What do people individually believe are the most important strategic challenges and why?
  • Order/organise. The next step is to closely review your Strengths, Weaknesses, Opportunities and Threats. Are your distinctions between internal and external really clear? All of the outcomes of the SWOT analysis and its underlying assumptions are checked. For example, what initially seems like an external threat may in fact be the consequence of an internal weakness.
  • Weighting. Strengths, Weaknesses, Opportunities and Threats are not created equal. Some are bigger and more important than others. In the Weighting step, you assign relative importance to each factor. For example, if you have identified 3 Strengths, you could distribute a total of 100 points among them. For example, perhaps your most significant Strength is worth 60 points, while the other two Strengths are less differentiated and worth only 20 each.
  • Emphasize detail. A SWOT analysis can often end up too generic. Perhaps you’ve ended up with “difficulty finding qualified personnel” as a threat. Now is the time to detail each item. What specific qualifications do you need this staff to have, and what is the (potential) consequence of this shortage?
  • Rank and prioritise. Finally, you will rank and prioritise the items of your SWOT analysis according to their weighting. The most important items according to this ranking should be prioritised in your strategic plan. For the best results, use this ranking and prioritisation to distill 3 primary strategic challenges resulting from your POWER SWOT analysis.

To learn more about the POWER SWOT, check out: