Business SWOT analysis: What it is and how to use it in your company.


What is a Business SWOT analysis? The best answer to this question can be translated from the definition given by Philip Kotler, in the tenth edition of his book “Marketing Administration”:
The overall assessment of a Business’ Strengths, Weaknesses, Opportunities and Threats is called Business SWOT analysis.

For you to get the appropriate results from this analysis, it is necessary to divide the company’s environment into two spheres:

  • External environment
  • Internal environment

First, we will now describe each of them in details.

See also: 5 step Business SWOT Analysis  – Learn how to implement it here.

What is Business SWOT Analysis in the External Environment?

The external environment is composed of all outside factors or influences, usually unpredictable and uncontrollable, which can impact the operations of the business. It is in this environment that we can identify opportunities and threats which the company must prepare for.

We must consider the opportunities to be all of those environmental conditions or factors which the company can profit from or which can help the company meet the needs and desires of customers not already met by the competition.

Threats can be defined as the possibility of negative influences on revenue and earnings imposed by a trend or challenging situation.

To facilitate Business SWOT Analysis, the external environment can be divided into two sets of factors.

Macro environmental factors:

  • Demographic
  • Economic
  • Technology
  • Regulatory
  • Policies
  • Cultural Rights, among others

Microenvironmental factors:

  • Competitors
  • Customers
  • Distributors
  • Suppliers and others

What is Business SWOT Analysis in the Internal Environment?

It is the strengths and weaknesses within the boundaries of your business. In the internal environment, we can handle and manage the business strategically, with control over each factor. But how can we study everything that happens within the company? To do this, we must classify the performance and importance of the characteristics of four managerial areas: Marketing, Finance, Production, and Management, in the checklist below:


  • Distribution
  • Sales team
  • Market Share and geographical coverage
  • Prices
  • Quality of products and services
  • Company Reputation
  • Customer satisfaction and retention


  • Cash
  • Capital
  • Stability


  • Production capacity
  • Technical knowledge
  • Economies of scale
  • Installation / machinery
  • Qualifications of workers


  • Adaptability
  • Entrepreneurship
  • Leadership
  • Motivated employees

Check out: How to cut costs in your business – read about it here.

What is Business SWOT Analysis in terms of effective action?

After defining the opportunities and threats as well as the strengths and weaknesses, the company’s top management must be reliant on them to create their strategic plan. They must choose the best opportunities and determine how to obtain and take advantage of them. They should be capable of identifying the most serious threats and take steps to defend against them. As for strengths and weaknesses, it is important to note that it will be very difficult to remedy all of the weaknesses in their entirety or become fully confident that the effort will guarantee success.

The secret to a well-executed Business SWOT analysis is to know how to harness the forces to leverage opportunities and fend off threats. Likewise, reinforcing weaknesses so that environmental risks do not have an impact on the company or opportunities are not lost.

BPM tools are tasked with creating more efficient and effective processes to achieve strategic objectives, adding value to the company and its products and services at each stage of the production process.

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