A SWOT analysis is a critical tool that identifies and analyzes the strengths, weaknesses, opportunities and threats of any project or business. A SWOT analysis is prepared by first identifying the key points pertaining to the four parameters of the analysis and putting them in a 2*2 matrix form for further analyzing.
- Prepare the SWOT matrix
Prepare a 2*2 matrix and identify the four parameters on the matrix. Strengths are to be listed on the top left corner of the matrix, weaknesses on the top right corner, opportunities on the bottom left corner and threats on the bottom right corner. Mark the first column, which has strengths and opportunities listed under it, as "helpful" and the second column, which has weaknesses and threats listed under it, as "harmful." Additionally, identify the first row, which consists of strengths and weaknesses, as "internal factors" and the second row, which consists of opportunities and threats, as "external factors."
- Identify and list the strengths and weaknesses
Identify the strengths and weaknesses particular to the project or business. The strengths and weaknesses should be evaluated not only from an internal perspective but also from the perspective of the people outside the project. Additionally, if the SWOT analysis is for a business, the strengths and weaknesses should be compared with competitors prior to listing them. For example, if all competitors can deliver a product to the customer within an hour of purchase, then fast delivery system cannot be listed as strength. If the SWOT analysis is for an individual, the strengths and weaknesses should be identified accordingly.
- Identify and list the opportunities and threats
Analyze the lists of strengths and weaknesses to identify the opportunities and threats. Strengths open up opportunities, while weaknesses expose the project or business to possible threats. Understand the opportunities and threats, and find out which strengths or weaknesses lead to which.