SWOT Analysis · Business Analysis Notes

What it is#

In the BABOK® Guide, SWOT is a simple tool for assessing the strengths, weaknesses, opportunities, and threats of an organization, a product, a process, or even an individual:

Strengths: internal factors where the subject does better than its competitors.
Weaknesses: internal things it does badly or does not do at all.
Opportunities: external factors it could use to its advantage.
Threats: external factors that could harm it.

“Internal” means under the organization’s control; “external” means something that happens to it. This test settles most arguments about which box an item belongs in.

Listing items is only half the job. Business analysis training materials pair SWOT with a strategy matrix, often called TOWS, that crosses the boxes:

	Opportunities	Threats
Strengths	SO: use strengths to seize opportunities	ST: use strengths to counter threats, or turn a threat into an opportunity
Weaknesses	WO: use opportunities to overcome weaknesses	WT: restructure to avoid threats (the worst-case cell)

The BCS book makes two further points. First, SWOT should summarize analysis you have already done, not replace it. External items should come from tools such as PESTLE and Porter’s Five Forces; internal items from a resource audit or a MOST analysis. Used as the first and only tool, SWOT tends to produce weak, unconvincing lists. Second, each statement should be brief, linked to critical success factors, specific, realistic, and backed by evidence.

When to use it#

The training materials list typical uses: assessing the current organizational environment, choosing among options for meeting a need, identifying obstacles and plans to overcome them, finding competitive advantages, and developing a strategy against external threats. In the BABOK Guide, SWOT appears in tasks such as Analyze Current State (6.1), Define Future State (6.2), Define Change Strategy (6.4), Analyze Potential Value and Recommend Solution (7.6), and Assess Enterprise Limitations (8.4).

Its value is speed: it quickly focuses stakeholders on the factors that matter. Its limits: the picture is high-level and usually needs detailed analysis afterwards, and without a clear context and question the result drifts.

Use something else when:

you need to know why a weakness exists; use Root Cause Analysis;
you need to compare options on costs and benefits; use a business case or decision analysis;
you have not yet studied the external environment; do PESTLE or Five Forces first.

How to do it#

Define the subject and the question, for example “Should we launch online booking before the spring peak?” A SWOT without a question drifts.
Gather inputs. External: PESTLE, competitive forces, benchmarking, customer feedback. Internal: capabilities, performance metrics, resource audit, staff interviews.
Draft each box, keeping internal and external items apart.
Test every statement. Is it internal or external? Better or worse than whom? What is the evidence? Does it affect a critical success factor?
Prioritize. Keep the few items per box that would change the decision.
Build the TOWS strategies, at least one per cell.
Turn strategies into options, objectives, or requirements, and feed them into the change strategy or business case.
Review with stakeholders and date it. A SWOT ages quickly.

Example#

The Workshop, a fictional chain of 12 bike-repair workshops, asks: “Should we launch online booking and status notifications before the spring peak?”

	Helpful	Harmful
Internal	S1 Loyal local customers. S2 Twelve sites across the region. S3 Experienced mechanics.	W1 Booking by phone only. W2 No visibility of parts stock. W3 Front desk overloaded in spring.
External	O1 Customers now expect online booking from service businesses. O2 The parts supplier offers electronic ordering.	T1 A national chain plans to open nearby. T2 Parts deliveries slow down in peak season.

TOWS strategies:

SO (S2 + O1): let customers book at any workshop with free slots, not just their usual one.
ST (S3 + T1): promote the mechanics’ expertise and transparent status updates as a reason to stay.
WO (W2 + O2): use the supplier’s electronic ordering to fix stock visibility.
WT (W3 + T2): launch before the peak, but cap daily online bookings per workshop so promises can be kept.

Outcome: SO, WO, and WT became the scope of release 1; ST became a marketing action outside the project.

Common mistakes#

Using SWOT as the first tool → do the external and internal analysis first, then summarize (BCS).
Mixing internal and external → “new booking software is available” is an opportunity, not a strength.
Long, generic lists (“good people”) → keep a few specific, evidence-based items.
Strengths with no comparison → strong compared to whom?
Stopping at the grid → derive strategies with TOWS.
No question or context → frame the analysis around a decision.
Treating it as permanent → date it and refresh it when conditions change.

Template#

Template

Subject: <organization / product / process>
Question: <decision this SWOT informs>
Date: <date>    Inputs used: <PESTLE, five forces, metrics, interviews...>

| | Helpful | Harmful |
|---|---|---|
| Internal | S1 <statement + evidence> | W1 <statement + evidence> |
| External | O1 <statement + evidence> | T1 <statement + evidence> |

| | Opportunities | Threats |
|---|---|---|
| Strengths | SO: <strategy> (S?, O?) | ST: <strategy> (S?, T?) |
| Weaknesses | WO: <strategy> (W?, O?) | WT: <strategy> (W?, T?) |

Next steps: <options / objectives / requirements, owner, date>

Sources and further reading#

IIBA. A Guide to the Business Analysis Body of Knowledge (BABOK® Guide), version 3. International Institute of Business Analysis, 2015, technique 10.46 “SWOT Analysis”.
Business analysis training materials, module on Strategy Analysis (uses of SWOT, TOWS strategy matrix).
D. Paul, D. Yeates, J. Cadle (eds.). Business Analysis, 2nd ed. BCS, The Chartered Institute for IT, 2010, ch. 3 (SWOT format and its place after PESTLE, Five Forces, and resource audit).