SWOT analysis (strengths, weaknesses, opportunities and threats analysis) is a brainstorming exercise for helping to identify what internal and external factors will impact the ability of a project, product, place or person to be successful.
As its name states, a SWOT analysis examines four elements:
Strengths: Internal attributes and resources that support a successful outcome.
Weaknesses: Internal attributes and resources that work against a successful outcome.
Opportunities: External factors that the entity can capitalize on or use to its advantage.
Threats: External factors that could jeopardize the entity's success.
The matrix for conducting a SWOT analysis can be as simple as dividing a square into four quadrants and labeling them S, W, O and T. For example, decision-makers might choose to identify and list specific strengths in the upper-left quadrant, weaknesses in the lower-left quadrant, opportunities in the upper-right quadrant and threats in the lower-right quadrant. To guide participants through the analysis, the facilitator will typically use a series of open-ended questions such as "What do you do better than anyone else?" or "What does your biggest competitor do better?"
Although the snapshot that a SWOT analysis provides can be important for helping stakeholders understand what factors may impact success, the framework does have its limits. For example, if the analysis does not include all relevant factors for all four elements, stakeholders may walk away from the exercise with a skewed perspective. Moreover, because the exercise only captures factors at a particular point in time, the insight gained from a SWOT analysis potentially has a limited shelf life.