Perform a SWOT Analysis – Overview

The Purpose of The SWOT Analysis

A financial leaders manages the financial structure of a company. By performing a SWOT analysis, you are able to strategically manage the financial status by first analyzing environmental factors and then putting an action plan together to improve the company through productivity, cash flow, etc.

Each company has internal factors and external factors that can have serious impact on the organization. So often, business owners, CEOs, financial leaders, and so many others only look inside the company. As a result, they neglect to pick their nose up from their computer screen to analyze the outside world. If not realized, your company could be missing optimization opportunities as well as missing opportunities to resolve negative issues.

What is a SWOT Analysis?

First of all, what is a SWOT Analysis?

The SWOT Analysis is an acronym standing for Strengths, Weaknesses, Opportunities, and Threats. It begins with a company’s objective in a desired field or market. Then it identifies the internal and external factors that are favorable and unfavorable to achieve that objective. This analysis serves as an excellent tool for decision-making, either for personal use or from a business standpoint.

The purpose of a SWOT analysis, from a business point-of-view, is to organize a proper business strategy around the internal and external factors that affect one’s business. Existing or older businesses may use a SWOT analysis to predict or proactively adapt to the environmental changes pertaining to their business. In addition, new or starting businesses may use this analysis to plan ahead before preparing a business plan to assess potential road bumps or advantages they can exploit.

One term commonly used in strategic management is PESTEL. PESTEL is a framework that identifies external factors that could impact the organization. By identifying these macro-environmental variables, you will have the tools to complete the threats and opportunities section of the SWOT analysis.

We’ll talk a little more about what PESTEL means throughout the data accumulation stage of performing a SWOT Analysis. .

*** Hot Tip ***

As you go through this process, act as if you were an outside consultant working with your company.

SWOT Analysis Template

Download the SWOT Analysis Template here. Then use this spreadsheet as we walk through how to perform a SWOT Analysis.