SWOT analysis is one of the five essential steps in developing a business strategy. These steps include: defining the organization’s mission, conducting a SWOT analysis, identifying strategic objectives, formulating strategic goals and plans, and establishing mechanisms for strategy control. SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats—a widely recognized model in business analysis.
According to the ISO 9001:2015 requirements, organizations must assess their strengths, weaknesses, risks, and opportunities for improvement for each identified process within the quality management system (QMS). Based on this analysis, organizations can define objectives, implement control measures, and evaluate the performance of each process as well as the overall QMS.
Therefore, the SWOT analysis tool serves as an effective method to support the implementation of ISO 9001:2015.
The Origins of SWOT
From the 1960s to 1970s, the Stanford Research Institute (Menlo Park, California) conducted a major study involving over 500 top-revenue companies, as ranked by Fortune Magazine. The purpose of this study was to determine why many companies failed to effectively implement their business plans.
The research team—consisting of economists Marion Dosher, Dr. Otis Benepe, Albert Humphrey, Robert F. Stewart, and Birger Lie—developed the SWOT Analysis Model. This model was designed to better understand the corporate planning process and to provide business leaders with a framework to reach consensus and sustain strategic planning and management improvements.
This research spanned nine years, involving over 5,000 employees and the completion of a comprehensive survey with 250 planning items across 1,100 companies and organizations. The study ultimately identified seven core issues in effective business organization and management.
One of the key outcomes was the discovery of a “logical sequence”, which became the central structure of the SWOT-based strategic planning system.
1. Values (Giá trị);
2. Appraise (Đánh giá);
3. Motivation (Động cơ);
4. Search (Tìm kiếm);
5. Select (Lựa chọn);
6. Programme (Lập chương trình);
7. Act (Hành động);
8. Monitor and repeat steps 1, 2 and 3 (Monitor and repeat steps 1, 2, and 3).
The Stanford Research Institute's Approach to SWOT
The research team at the Stanford Research Institute suggested that the first step in strategic planning should begin by evaluating a company’s strengths and weaknesses. Business leaders were encouraged to ask themselves what is “good” and “bad” in both the present and the future.
- What is good in the present is termed as Satisfactory.
- What is good in the future is called an Opportunity.
- What is bad in the present is a Fault,
- And what is bad in the future is considered a Threat.
This framework was initially known as SOFT analysis. In 1964, the research team decided to replace the letter F (Fault) with W (Weakness), officially transforming SOFT into SWOT.
The Six Steps in a SWOT Analysis
A comprehensive SWOT analysis typically involves examining six key business aspects:
- Product
Process
Customer
Distribution
Finance
Management
Weaknesses
These are internal factors that may hinder performance or success. Common weaknesses include:
- Personality traits that are not suitable for the job
- Negative work habits
- Lack of experience or relevant background
- Inadequate formal training
- Limited networks or professional relationships
- Lack of direction or unclear career goals
- Underdeveloped professional skills
Strengths
Strengths (to be maintained, developed, and leveraged) are clear and validated positive attributes, such as:
- High level of expertise
- Relevant skills and professional experience
- Strong educational background
- Wide and stable professional network
- High sense of responsibility, dedication, and passion
- Ability to respond quickly and effectively to job demands
Opportunities
Opportunities are external, often uncontrollable factors that, if leveraged properly, can lead to success. These include:
- Promising market trends
- Booming economic conditions
- New career prospects
- Being entrusted with a high-potential project
- Gaining access to new skills or experiences
- Emergence of new technologies
- Implementation of favorable new policies
Threats
Threats are obstacles or risks that may negatively impact your business or career. Their effects depend on your ability to respond. Common threats include:
- Industry restructuring and reorganization
- Market volatility and pressure
- Obsolescence of certain skills
- Inability to keep up with technological changes
- Intense competition—both organizational and personal
How to Conduct a SWOT Analysis
- Create a four-quadrant matrix corresponding to Strengths, Weaknesses, Opportunities, and Threats.
- List specific items under each quadrant as bullet points—be as clear and detailed as possible.
- Be honest and thorough; include feedback and perspectives from others if possible.
- Edit the list—remove duplicates, highlight unique and important traits.
- Analyze the meaning and implications of each point.
Identify actionable steps such as:
- Reinforce key strengths
- Address or eliminate weaknesses
- Seize potential opportunities
- Protect against risks and threats
Regularly update your SWOT chart to improve the quality and effectiveness of your strategic plan. With this structured approach, you’ll increase your chances of building a successful and sustainable career—or business.
(Source: Wikipedia)