SWOT analysis is a concept that was first introduced in the 1960s, with many experts crediting its creation to Albert Humphrey at the Stanford Research Institute. The term is an acronym that stands for Strength, Weaknesses, Opportunities and Threats, and is a planning tool used by organisations all over the world to help them assess how their business sits on the market and how it can viably grow. A SWOT analysis in its simplest form is a list of these four categories and how they impact upon a business. Under the plan, strengths and weaknesses are considered to be internal issues – reputation, location and staff skillsets, for example – while opportunities and threats are factors that are external to the firm and cover influences like competitors, suppliers and prices. Because of the changing nature of most markets, it is common practice for companies to undertake a SWOT analysis at least once every year, as this helps them to identify how and where they need to focus their efforts in order to remain competitive. However, the process isn’t limited to existing businesses and it is also recommended that new enterprises also use SWOT as part of their initial planning process. When it comes to conducting the analysis itself, the most common approach is to involve a range of stakeholders, all of whom have different perspectives on the running of operations. This way, an organisation is able to get a well-rounded view of the whole landscape it is operating in. As part of the analysis, those participating tend to fill out a basic ‘four-square’ template that clearly details each of the SWOT components. These are then compared across the group and discussed before a finalised document is created that prioritises the points raised in each section. Using this information, a company can then begin to create short- and long-term strategies to not only avoid any obstacles that might prohibit it from expanding, but also capitalise on any areas that it could use as a springboard to growth. To find out more about SWOT and how it can be applied in more detail, why not book onto out management training courses?