SWOT Analysis Meaning – Strengths Weaknesses, Opportunities and Threats

SWOT analysis meaning derives from an acronym for Strengths, Weaknesses, Opportunities, and Threats combined with the word “Analysis.” SWOT analysis is a detailed examination of the four words as they apply to an entity.

This articles tracks the interesting origin of the term “SWOT analysis” and explains whether SWOT analysis is actually an analysis.

There is no need to feel scared because the phrase denotes a straightforward evaluation of an organization, object or person.

Defining SWOT analysis

SOWT analysis is a process of outlining four strategic planning techniques for understanding the strengths, weaknesses, opportunities, and threats of a person or an organization.

Basically, S represents strength, W represents weakness, O represents opportunity and T stands for Threats. So, the meaning of the SWOT analysis cannot be understood without grasping what each letter stands for.

Short origin of the meaning of SWOT analysis

Ever wondered who introduced the phrase SWOT analysis? I too found this origin interesting.

The first moment SWOT analysis was used was in the 1960s by Albert Humphrey. SWOT analysis meaning is attributed to his earliest research.

Mr Humphrey was a management consultant at the Stanford Research Institute.

Albert Humphrey led a research project using large data from many big companies.

The main reason for his research was to identify why corporate planning always failed in many organizations.

What was the initial meaning of SWOT analysis?

After Albert Humphrey completed his research in the 1970s he identified key areas that needed to be explored.

So, he developed a tool that served to evaluate key areas in an organization. It was called SOFT analysis.

Here is how he defined SOFT analysis:

  • S (satisfactory) – What is good in the present
  • O (opportunity) – good in the future
  • F (Fault) – bad in the present
  • T (Threat) – bad in the future

As we can see, Humphrey was very close to finding a term that is closer to today’s SWOT analysis meaning.

Three Authors on the Definition of SWOT analysis

One myth about the origin of SWOT analysis is based on the text “Business Policy, Text and Cases” published in 1965 by three authors.

The three authors, Learned, Christensen, Andrews and Guth, were all from Harvard University.

However, a closer look at their text shows that they only discussed a framework that closely resembles a SWOT analysis. Its meaning was not as described clearly as we know of SWOT today.

In fact, in their own view, they considered SWOT analysis as meaningless. We can agree that based on the detailed definition that will follow, the term has not clear meaning.

It is just a bunch of words put together to represent a framework of evaluating a particular entity. So, the true definition of SWOT analysis could entail a lot of things.

SWOT analysis in different contexts

Since it was invented, SWOT analysis has only grown in popularity and as shown in the figure below.

Recently, its meaning has expanded and it no longer applies to Fortune 500 companies that Humphrey intended in the early stages of framework development.

SWOT analysis meaning explained in business

In today’s context, SWOT analysis means a process that generates meaningful information to an organization based on its goals and existing programs.

To analyze, according to the Cambridge Dictionary, is to “to study or examine something in detail, in order to discover more about it.”

Interested in seeing an actual SWOT analysis to get a good picture of its meaning?

Our example on SWOT Analysis of Quadients (formerly Neopost) Company is available for free.

When talking about SWOT analysis, we are, therefore, examining or studying in detail about each of the four letters in the word SWOT.

Let’s get straight into it.

SWOT acronym meaning in full

  • S – Strengths
  • W – Weaknesses
  • O – Opportunities
  • T – Threats

To get the clear picture, let us examine each of these words in detail. That way, we can understand the actual SWOT analysis meaning.

Note that in itself, the word SWOT on its own would mean nothing.

In business, SWOT analysis defines the nature of the organization at the current context. Does the company possess some strengths or does it has too many weaknesses?

Strengths – meaning and example

Strengths describe the positive attributes that an entity possesses. These attributes are either tangible or intangible, and are within the entity’s control.

These are qualities that the organization possess and drive its success. An example strength in Michael Jordan that helped him prosper in basketball is his height.

Weaknesses – meaning and example

These are factors within an organization that deter it from achieving its full potential or desired goals.

A weakness is something that the organization cannot do perfectly. For instance, a weakness of a company like Apple is that it depends on cheap Chinese labor to attain high profit margins. So, any time there is a problem with labor in China, Apple would be affected directly.

A person’s weakness could be their inability to stop doing something. For instance, an alcoholic who wants to perform well in his or her job could have excessive consumption of alcohol as the weakness.

Opportunities – meaning and example

Opportunities refer to the potential routes to success that remain largely untapped. They are areas one might improve.

An example is a student who has been scoring C’s despite not reading or taking their classwork seriously. He or she has an opportunity of getting A’s if upon getting serious and starting to read.

Threats – meaning and example

These are the external factors that are beyond the control of the organization. They could place the entity at risk of failing.

An example is tourism company JellyBand Safaris that depends on people travelling from one country to another. A global pandemic would be a threat to JellyBand Safaris because the disease could lead to travel lockdowns. That could take them out of business.

Some threats are internal while others are external.

An internal threat is a challenging issue within. Using the case of JellyBand Safaris, an internal threat could be lack of trained personnel in organized Safaris.

On the other hand, an external threat could be the outbreak of a pandemic that eventually affect their business.

With such descriptions, explaining the meaning of SWOT analysis should be understandable to newbies.

Does SWOT analysis means analysis

The term is itself quite interesting. SWOT analysis meaning is considered a flexible phrase that does not explain only one item.

Many believe that SWOT analysis does not mean a real analysis. Rather, it is a summary of a set of previous evaluation of an organization.

When listing the strengths of a company, we may state that it has a “big balance sheet” and has a “reputable brand image.” However, these statements are only arrived at after an analysis had been done regarding its financial position and brand image.

Therefore, the meaning of SWOT analysis may not be an actual analysis.

A more correct interpretation of SWOT analysis meaning lies with the amount of effort and fresh data one generates regarding the state of the company of interest.

Application of SWOT analysis meaning

Given the various opinions about the application of the term, one can write a SWOT analysis of almost anything.

What can you write the SWOT analysis for?

You can write SWOT analysis of the following without losing its meaning:

  • A famous celebrity
  • A politician
  • Your parent
  • School teacher
  • University lecturer
  • A big company
    • Fortune 500 companies
  • A small local company
  • A start-up organization
  • Non-governmental organization
  • A SWOT analysis of logistics company
  • A car
  • A phone
  • A planet
  • A partner

People even write personal SWOT analysis to identify areas of their lives they need to improve. Therefore, while the interpretation of the process may be different, its structural use remains the same for anything being evaluated.

Not satisfied with our explanation of SWOT analysis meaning?

Consider checking out SWOT analysis template for further familiarization with examples.

Final remarks

With all that said, you should have a pretty good idea about SWOT analysis meaning.

Brendon is our top business writer. His main focus is SWOT analysis.

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Brendon has a definition for every company’s analysis using his skills developed over the 4 years he has worked with our company.