SWOT: What Is It? How Does It Work? And How to Perform an Analysis
SWOT analysis is highly reliable when someone wants to take a pause and assess the current situation. With a clear view of strengths, weaknesses, opportunities, and threats, you can have better insights than a normal approach.
Nowadays, many business leaders find the times quite uncertain around them. As per a report, around 57% of CEOs think that geopolitical and economic uncertainty will last more than a year. This highlights the importance of tools like SWOT analysis.
Similarly, around 55% of companies are facing the challenge of uncertain economic conditions, showing how normal uncertainty is around us. While the SWOT is not typically used for making future decisions, it is really helpful in evaluating the current scenarios.
It gives you some answers, like what is going well and what’s not. What can help from outside and what can bring troubles? People rely on SWOT analysis when things around them seem messy, crowded, or confusing.
Breaking down the things into four clear sections can give a better assessment of the current situation and open the way to thinking about ways.
Strengths in a SWOT Analysis
Strengths in SWOT analysis include the real things that are working very well right now. Rather than being hopes or dreams, strengths are current facts.
Some examples of strengths in the SWOT analysis can be skills, resources, experience, systems, etc.
Weaknesses in a SWOT Analysis
Weaknesses in a SWOT analysis are mainly internal and focus on what is failing. These highlight the gaps or limitations that are making systems slow.
Weaknesses are not put in SWOT analysis to highlight the blame, but to see where things are stuck, slow, or messy.
Opportunities in a SWOT Analysis
Opportunities in a SWOT analysis come from outside, rather than built internally. These mostly show up because the things around you are changing.
These opportunities can be changes in demand, behavior, technology, or market trends. An opportunity only matters to you if it is connected to your current situation.
Threats in a SWOT Analysis
Threats in a SWOT analysis also come from outside. These are risks, obstacles, or shifts that can add up to more pressure or problems.
These threats are not always about fear, but about being alert and aware. It helps you to be informed about what could cause trouble and avoid surprises later.
How to Do a SWOT Analysis Step by Step
Step 1: Decide What You Are Analyzing
First of all, you need to sort out in your mind the requirements. Understand the subject and analyze only one at a time. Make sure you have clarity on whether the SWOT is for a business, project, product, or personal situation.
Step 2: List Strengths and Weaknesses
Now, you need to peek inside and mention what already exists. Do not write emotional or lengthy points while listing out strengths and weaknesses.
| Internal Area | Notes |
| Strengths | What works well internally |
| Weaknesses | What causes delays or issues |
Step 3: Identify Opportunities and Threats
Now, check outside to analyze how things are changing around you. Make sure to include factors that have a solid impact on the current situation.
| External Area | Notes |
| Opportunities | Helpful external changes |
| Threats | Risky external changes |
Step 4: Arrange Everything in a SWOT Table
Now, once you have all the clarity, place everything in the four-box table format.
| Strengths | Weaknesses |
| Internal positives | Internal limitations |
| Opportunities | Threats |
| External help | External risks |
Step 5: Review the Complete SWOT
Once the table has all the details, read it and notice patterns, analyze connections, and try to find potential opportunities and threats.
Simple Example of a SWOT Analysis
Let’s consider a local bakery shop as an example to understand SWOT analysis.
As per the table, the bakery shop has happy local customers, but the shop size is small. With new homes, there will be more customers, but a big competitor might damage the sales.
| Strengths | Weaknesses |
| Loyal local customers | Limited seating space |
| Fresh daily products | Small staff |
| Opportunities | Threats |
| New housing nearby | Large chain bakery opening |
Conclusion of SWOT Analysis
Hence, SWOT analysis is a helpful tool to visualize what exactly exists, rather than guiding on what to do. It separates strengths, weaknesses, opportunities, and threats to avoid confusion and highlight structure.
SWOT analysis gives a better glimpse of ideas and promotes communication. If used properly, this tool helps people understand their current standing and future plans.
Links Used –
https://www.ey.com/en_gl/ceo/ceo-outlook-global-report
https://www.jpmorgan.com/about-us/corporate-news/2025/2025-business-leaders-outlook-pulse-survey
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This analysis is for informational purposes only. Please consult a SEBI-registered financial advisor before investing.
– Chandan Pathak
Equity Research Analyst, StockYaari