SWOT analysis is an amazingly simple and logical way to start strategic planning. It allows management or anyone to break down an organization into four areas, which address the internal and external forces affecting the operation.

4 Areas:
1. S—Strengths (internal)
2. W—Weaknesses (internal)
3. O—Opportunities (external)
4. T—Threats (external)

S — Strengths

The strengths of an organization are the internal forces or attributes within that encourage success of the plan. Strengths are what an organization does well and provides the basis for future actions.

W — Weaknesses

If strengths are what an organization does well, then weakness are what a company does not do well. Instead of being a fault, weaknesses are areas of improvement. By identifying them, an organization has a starting point for eradication.

O — Opportunities

Opportunities are external events that provide an organization the chance to capitalize on a strength or eradicate a weakness. Opportunities are doorways to new growth and legendary management.

T — Threats

Threats are the external forces that may deter an organization from its opportunities. Threats can be competition, government, or countless other obstacles.

By utilizing the basics of SWOT analysis, management and any others within an organization are able to plan appropriately. Strategic planning is not a black-box operation, which is why SWOT analysis encourages an organization to be hones and aware of internal and external forces.

So, take a few minutes. Draw four boxes, and become a better strategic planner.