SWOT is an acronym for strengths, weaknesses, opportunities, and threats. The analytical tool has been in use for around fifty years, and while some attribute the origin of the SWOT analysis to Stanford Research Institute’s Albert Humphrey, because he doesn’t take credit for it, the derivation of the device is not clear. Nonetheless, SWOT analysis has been a mainstay of organizational strategy, in part due to its simplicity and exposing power.
The device considers both internal and external factors to help identify areas of improvement and potential areas for emphasis. The SWOT analysis provides a concise snapshot of an organization’s present health as well as uncovering opportunities for refinement and growth. The internal factors considered are strengths and weaknesses. Identifying current strengths and weaknesses within the organization helps leaders assess how well the organization is meeting its mission or how badly it is missing the mark. On the external side, opportunities and threats are examined in order to evaluate climate and environment for that organization’s function. SWOT analysis is a tool that can help organizations monitor past and present performance (strengths and weaknesses) and to identify action points in anticipation of the future (opportunities and threats).