What is SWOT Analysis?

SWOT is one of the most widely known strategic tools, used from MBA classrooms to Fortune 500 boardrooms. Strengths and Weaknesses are internal factors within the company's control—brand reputation, talent, technology, financial resources, operational efficiency. Opportunities and Threats are external factors driven by market dynamics, competition, regulation, technology trends, and macroeconomics.

The real value of SWOT comes from translating the analysis into strategy: leveraging Strengths to capture Opportunities (aggressive strategy), using Strengths to mitigate Threats (defensive strategy), addressing Weaknesses to capitalize on Opportunities (developmental strategy), and minimizing Weaknesses to avoid Threats (survival strategy).

In case interviews, SWOT is useful as a quick initial assessment but should not be the primary framework for most cases. It's better suited as a supplementary tool alongside more specific frameworks like Five Forces or profitability analysis. The main criticism of SWOT is that it's descriptive rather than prescriptive—it tells you what the situation is but doesn't directly tell you what to do.