A SWOT Analysis is a strategic planning tool used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture or in any other situation requiring a decision. The technique is credited to Albert Humphrey, who led a research project at Stanford University in the 1960s and 70's, using data from the Fortune 500 companies.
Once the objective has been identified, SWOTs are discovered and listed. SWOTs are defined precisely as follows:
Strengths are attributes of the organization that are helpful to the achievement of the objective.
Weaknesses are attributes of the organization that are harmful to the achievement of the objective.
Opportunities are external conditions that are helpful to the achievement of the objective.
Threats are external conditions that are harmful to the achievement of the objective. Correct identification of SWOTs is essential because subsequent steps in the process are all derived from the SWOTs.
First, the decision makers have to determine whether the objective is attainable, in view of the SWOTs. If the objective is NOT attainable (in view of the SWOTs) a different objective must be selected and the process is repeated.
If, on the other hand, the objective seems attainable, the SWOTs are used as inputs to the creative generation of possible strategies, by asking and answering the following four questions many times:
1. How can we Use each Strength?
2. How can we Stop each Weakness?
3. How can we Exploit each Opportunity?
4. How can we Defend against each Threat