SWOT analysis: what it is and how to do it in your company

Business / Date: 04-10-2025

Defining a strategic plan for a business is a task that leaves many entrepreneurs apprehensive. After all, seeking effective and solid direction for a company – regardless of its size – is a huge responsibility for anyone. When it comes to establishing goals, objectives, actions and initiatives that will provide support for the business, however, there are some very useful tools that can and should be used.

This is the case of the SWOT analysis. Do you want to know what SWOT analysis is and how it works? Then continue reading this article and learn how to use this important tool to help your company grow!

What is SWOT analysis?

SWOT analysis – also known as FOFA – is a strategy widely used to assess a company’s internal and external environment. Short for strengths, weaknesses, opportunities and threats (SWOT), this analysis plays a fundamental role in any organization. This technique basically consists of helping the entrepreneur identify the strengths, weaknesses, opportunities and threats related to the business and formulate efficient strategies to optimize the company’s performance in an increasingly saturated and competitive market.

Regardless of the size of the business, using this tool will allow the manager to evaluate, in detail, the internal and external context in which the company operates and visualize possible paths to follow in the future. If a threat or weakness, for example, is identified, it is up to the manager to rearrange corporate planning to solve the problems found. If, on the other hand, a strength or opportunity appears, it is also up to the administrator to find ways to take advantage of these opportunities to grow and stand out from the competition.

What is SWOT analysis for?

As we have already said, SWOT analysis is essential for any company that wants to analyze the attributes of the organization and the internal and external environment with a more critical view, identifying what can be useful and what can be harmful to the business. It is from this analysis that the company's strengths, the opportunities available in the market, the business's weaknesses - which require a lot of attention from the manager - and the threats that exist or that may arise in the future, which could eventually undermine the company's success, are verified.

Unlike many other tools, SWOT analysis does not require the manager or entrepreneur to have prior knowledge of different information or numbers. All that is needed is an interest in analyzing some internal and external aspects related to the business and organizing them correctly to be able to make good use of this strategy.

How does SWOT analysis work in practice?

When using this important strategy in the day-to-day corporate routine, the entrepreneur must seek to identify, among other points, which activities are best performed within the company. It is also possible to analyze its main competitive advantages, its greatest weaknesses, the opportunities that the market may be offering for the sector – whether in the short, medium or long term, among other factors. And it is not only the administrator who must carry out this analytical exercise.

Any employee who wishes to analyze his/her area of activity inside and outside the company, observe the behavior of the competition and identify points for improvement in his/her own business can use the SWOT analysis. Among the points that can be identified (and documented) from the SWOT analysis are data on customers , employees, suppliers, competitors, macroeconomic analysis, and others. Only from this information is it possible to know, in detail, the internal and external scenario that involves the company – allowing, as a consequence, the adoption of measures that are beneficial to the business.

How to do this analysis?

To use SWOT analysis to your business’s advantage, there are a few steps you should follow. After all, this tool needs to be used (and evaluated) correctly, covering both the internal and external aspects inherent to the company. To be successful when conducting a SWOT analysis for your business, it is worth following three important steps.

They are: establishing the company’s advantages and disadvantages in relation to its competitors, identifying opportunities and threats in the market, and conducting a final analysis. Learn more about each of these three steps.

Establish advantages and disadvantages in relation to competitors

The first step to take when conducting an efficient SWOT analysis is to identify all of the company's main strengths and weaknesses in relation to its competitors. At this stage, it is worth studying each advantage and disadvantage of the business and looking for alternatives to mitigate the identified weaknesses.

Identify opportunities and threats

Next, it is worth observing the market in which your company operates in a holistic manner and identifying the main opportunities and threats in this market. Identify what could be an opportunity for growth in the future and also pay attention to what could represent a threat to your business. This will make it easier to develop an efficient strategic plan that is aligned with reality and projections for the future.

Make a final analysis

With this important information about your business, your competitors and the segment in which your company operates, it is time to make a final analysis of the material and establish goals, objectives and solutions for each of the points identified. Write down all this information in a document, analyze it and start developing an efficient plan for your business.

Don't forget to be realistic, remain objective and prioritize the most important points of the analysis in relation to your business. This way, you will be able to develop a more coherent and accurate plan to put (or keep) your company on track and lead it towards sustainable growth and success.