What, Why, and How to Use SWOT Analysis Effectively

Use SWOT Analysis Effectively

by Shamsul
Strategic analysis
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What, Why, and How to Use SWOT Analysis Effectively


SWOT analysis is a proven strategic planning tool used across businesses and companies to uncover strengths, weaknesses, opportunities, and threats. The main purpose of SWOT is to measure business projects, but it also helps to identify internal and external factors of the business environment. Let’s look at some important factors: how, what, and why to use SWOT analysis.


Why use SWOT Analysis?

If you are wondering why use SWOT when there are hundreds of tools available for analyzing business ventures, then the following reasons will certainly satisfy you.

  • Albert Humphrey first conducted SWOT analysis in 1960. Since then, it has proven a useful strategic planning tool.
  • The biggest advantage of this tool is that it is very simple to implement or use. Anyone can conduct SWOT analysis with a little effort.
  • SWOT analysis can be used to identify businesses, companies, competitors, and places. It can also be used for conducting self-assessments.
  • It helps to assess both internal and external business factors of your company.

There are tons of other advantages of using SWOT analysis, but the above methods are one of the most important benefits.


How to use SWOT Analysis?

Now, you understand why and what it’s the right time to use SWOT analysis proficiently.

  • Creating a SWOT Diagram:

The purpose of creating a SWOT diagram is to list down all the important factors in each section of SWOT. It provides a clear idea about your business or project. In this way, you can look at each and every factor easily. Moreover, there are various SWOT diagrams that you can choose.

  • Adding Data to SWOT Diagrams:

First of all, add internal factors such as strengths and weaknesses into a SWOT diagram. It is easy to assess both factors, depending on your organization or business type. In a business environment, a SWOT analysis could be like,

  • Human Resources – Skill level of your employees, language barriers, size of your organization, geographical distribution etc.
  • Financial Condition – Seasonal income, capital investment, profit, and income.
  • Distribution – Supply chain productivity, manufacturing abilities, partners, and distributors.
  • Operations – Efficiency of process, software efficiency, cost of implementing software or technology.

Strengths and weaknesses change with time. For example, Apple’s biggest strength is its loyal users, while Samsung’s biggest strength is its low production cost.

It is slightly difficult to add external factors like opportunities and threats into a SWOT diagram. To assess external factors of SWOT, you can take the help of another useful strategic planning tool called PEST. It is a useful method and stands for political, economic, social, and technological factors. If you add legal and environmental factors to PEST, then it becomes PESTLE.



PEST analysis largely focuses on the external business environment of a business. It is comparatively linked with the external part of SWOT analysis. Below, we have mentioned all the factors PESTLE in detail.

  • Political – Trade rules, corruption level, political instability, government hold, export limitations, and more.
  • Economic – Interest rates, wealth distribution, income level or people, exchange rates, and more.
  • Social – Cultural trends, lifestyle, demographic behaviors, education level, religious harmony, and more.
  • Technological – Basic technology infrastructure, the skill level of employees, software privacy, and internet penetration.
  • Legal – Labor laws, anti-piracy laws, tax regulations, and copyright.
  • Environmental – Climate change, green products, recycling, and weather patterns.

It is not necessary to apply all the factors to every company. They vary with every company, depending on their business.


Who needs SWOT Analysis?

Decision-makers, managers, and marketers can use SWOT analysis for the betterment of their businesses. However, It can be applied in various ventures and scenarios. If you are a big business, then you should create a SWOT analysis with your competent team members. Collaboration is the key in this matter.


Other Uses of SWOT Analysis:

We personally think that SWOT is still an underrated tool. But, it is really useful to evaluate the whole business venture. You can also conduct a self-assessment with the help of a SWOT analysis. This strategic planning tool is widely used in businesses and marketing. It helps the companies to take a competitive edge over competitors.


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