SWOT analysis is a structured planning method to identify and evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. A SWOT analysis can be carried out for a product, place, industry or person.
- Strengths: characteristics of the business or project that give it an advantage over others
- Weaknesses: are characteristics that place the team at a disadvantage relative to others
- Opportunities: elements that the project could exploit to its advantage
- Threats: elements in the environment that could cause trouble for the business or project
Why SWOT analysis is important in making your business plan?
Because it helps in specifying the objective of the venture or project and pin points the internal and external factors that are favorable and unfavorable to achieving that objective. It can help determine whether the venture will succeed or not - and will help identify strategies how to achieve the ventures goals and objectives.
When do you use SWOT?
A SWOT analysis can offer helpful perspectives at any stage of an effort. You might use it to:
- Explore possibilities for new efforts or solutions to problems.
- Make decisions about the best path for your initiative.
- Identifying your opportunities for success in context of threats to success can clarify directions and choices.
- Determine where change is possible.
- If you are at a juncture or turning point, an inventory of your strengths and weaknesses can reveal priorities as well as possibilities.
- Adjust and refine plans mid-course.
- A new opportunity might open wider avenues, while a new threat could close a path that once existed.
Below is a video that explains in detail an example of SWOT analysis: