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 required first step in SWOT analysis is the definition of the desired end state or objective. The definition of objective must be explicit and approved by all participants in the process. This first step must be performed carefully because failure to identify correctly the end state aimed for leads to wasted resources and possibly failure of the enterprise.
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 achievement of the objective.
Weaknesses are attributes of the organization that are harmful to achievement of the objective.
Opportunities are external conditions that are helpful to achievement of the objective.
Threats are external conditions that are harmful to achievement of the objective.
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?