At first glance, the SWOT Analysis seems simple. Really, how difficult can it be to identify strengths, weaknesses, opportunities, and threats? In truth, it’s more difficult than you’d think. As a graduate assistant in the marketing department, I’ve reviewed lots of SWOT tables, and I’ve found some pretty common mistakes. These down and dirty reminders should make it a little bit easier to incorporate a SWOT analysis in your business plan.
Internal v. External By and large, this creates the most confusion for new and veteran SWOT-ers. Here’s what you need to remember. Strengths and weaknesses are internal to the company. These are items that you can directly impact with internal company actions. Opportunities and threats, on the other hand, are external to the company. These are things that are going on in the industry that you can’t directly change. For example, an opportunity for an organic yogurt company could be that consumers are purchasing 24% more organic products than in the past. The yogurt company didn’t cause this. It is simply a trend upon which the yogurt company could take advantage
Doubling Up A strength should not also be a weakness, and an opportunity should not also be a threat. For example, you should not list a “growing market” as an opportunity, and then list “crowded marketplace” as a threat. These statements are contradictory. If the market is growing significantly, there is room for competitors and for yourself to grow; if it is not growing significantly and there are strong competitors, you are attempting to enter a crowded marketplace.
Format Surprising, right? Why would someone deviate from the standard SWOT format? Who knows, but they do. Now is not the time to be cutesy. Investors and other plan reviewers will be looking for a specific SWOT format, so you should deliver. Follow the example, below. Remember, the SWOT belongs in the Appendix.