A SWOT analysis breaks down a company’s strengths, weaknesses, opportunities and threats (SWOT) to inform the strategic planning process.
By looking at its internal strengths and weaknesses and examining the external opportunities and threats in the marketplace, a company can make better decisions on all three components of its strategic plan: Its strategic goals, strategic scope and key success factors.
The strategic plan that comes out of a SWOT analysis is used to create the marketing plan, which sets the tactical priorities in the market for the next 12-month period.
More about SWOT analysis
A successful SWOT analysis relies on high-quality data about the marketplace. This data can be collected on an ongoing basis from sales and service personnel, supplemented by market research conducted by an outside firm.
A SWOT analysis is usually performed by a small team over the course of a few weeks. Larger organizations may maintain a permanent strategic planning team, bringing in additional team members as needed to help with the analysis.