What is SWOT?

SWOT is a classical, qualitative, fundamental framework to evaluate a company. It is often used in combination with the two other frameworks: Porter's Five Forces and PESTEL. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. It measures the advantages and disadvantages from both internal (company) and external (market/industry) perspectives.

Picture source: https://www.plerdy.com/blog/swot-analysis-template/

Internal

The internal factors are strengths and weaknesses. They are directly related to a company’s business operation and its products.

Strength

The strength section contains the answers to the following questions:

• What does the business do well?
• What are some unique traits of business?

Weakness

The weakness section contains the answers to the following questions:

• What does the business need to improve?
• What are some management inefficiencies?

External

The external section contains opportunity and risk. It identifies the characteristics of the industry or the market that a company is currently in.

Opportunity

The weakness section contains (not limited to) information related to the following sections:

• Market/Industry’s future potential
• Efficiency in production
• Profitability
• Blue ocean strategy
• Uniqueness in products

Threat

• Competitions
• Regulations

Graph source: https://www.feedough.com/swot-analysis/