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The idea of a SWOT analysis has been around for decades. Determining the strengths, weaknesses, opportunities, and threats for a company, an industry, a product, or even an individual is not a brand-new technique. Investigating the origins of the SWOT analysis technique reveals that Albert Humphrey probably developed it at SRI (Stanford Research Institute) in the 1970s, although he never actually acknowledged that he thought it up.
For a 40-year-old technique, it's somewhat surprising how much traction SWOT analyses have gained in the past few years, at least when it comes to published literature. Searches in both Factiva and ABI/INFORM reveal an increase in articles about SWOT analyses beginning around 2010, with a spike in mentions in 2014 and interest continuing into 2015 and 2016. Google Trends tells a different story, with Google searches on swot showing a zigzag pattern rather than a timedependent spike in search activity.
DON'T SWOT THE SMALL STUFF
A SWOT analysis has both internal and external components. Strengths and weaknesses exist within a company, while opportunities and threats come from the outside. Internal strengths are those characteristics that give a company the advantage in the market, such as a strong reputation, ability to deliver products quickly, low prices, expert staff, stateof-the-art technology, or solid financial position.
Weaknesses are the converse of strengths. A strength could become a weakness if circumstances change. A faulty product could threaten the strong reputation-just think Samsung and how its reputation changed due to problems with just one product, its Galaxy Note 7. The definition of "quickly" in product delivery has changed dramatically. Perhaps delivery in a week sufficed when a SWOT analysis identified it as a strength, but customers now want overnight delivery. Price points also change. A competitor could undercut prices so that "low" is no longer considered low by customers. Expert staff can leave a company. Even if they remain, without professional development, their expertise can become dated. Technology moves on, and yesterday's "state of the art" is today's antique. Finances can also shift from strength to weakness.
The external aspects of a SWOT analysis involve identifying where opportunities lie and what threats lurk outside the company. Opportunities could range from new customer behavior patterns, supply chain enhancements, advanced technologies, or new markets...