At the most basic level, a SWOT analysis involves collecting data and information about one's organization and industry (competitors, etc.), processing and assessing the relevant data, and creating four lists. The four lists (usually the ultimate product of a SWOT analysis) are comprised of the answers to four separate questions:
- Strengths: "What does the firm do well?"
- Weaknesses: "What does the firm lack or do badly?"
- Opportunities: "What are the factors that can be exploited to the firm's advantage?"
- Threats: "What are the factors that can potentially reduce a firm's performanc, strengths or reason for existence?"
- Frequency. When and how often is it appropriate to carry out this type of analysis? Because of SWOT's inherent practicality and ease of use, it may be executed daily. An effective SWOT analysis would have to be continuosly modified, as elements in the organization's internal and external environments are constantly changing. Revising SWOT analyses on a daily basis would force analysts into a tedious routine of executing SWOT whenever new information emerges. Thus, it is necessary to conduct an analysis on when its use is most effective and appropriate for the organization. Opportunities to conduct SWOT include: periods of strategic review and planning; in reaction to competitors' launching of a new product; to assess and seize opportunities within the industry to remain competitive.
- Information. It is important to consider what information is relevant, and how it is being obtained. Analysts conducting an effective SWOT analysis must assess the organization's strengths and weaknesses largely based upon relevant internal information; obtained from sources such as management or the organization's consultant. Additionally, analysts should exploit market research, industry literature, press releases (from competitors and other industry reporting), and growing or declining industry trends. All information relevant to the analysis must be reviewed, verified, and updated before dissemination of the final SWOT analysis findings.
- Personnel. Who, and how many people are involved in the process? Because of its relative simplicity to execute, one individual may conduct a SWOT analysis. However, to guarantee a "balanced perspective," a minimum of four people should conduct a SWOT. The candidates with the most seniority are in the best position to assess the organization's strengths. Those assigned to assess the organization's weaknesses should be objective and able to maintain an impartial position when identifying internal flaws and shortcomings. Opportunities should be evaluated by creative thinkers and positive individuals who are able to consider and evaluate consequences in the long-term scope. Those tasked with addressing threats must be extremely knowledgeable about both the organization and the overall industry. In order to prevent bias and a group's influence over the others, those tasked with assessing seperate components should work in separate physical locations.
- Dissemination. How should the results of a SWOT analysis be presented to executives? Analysts may present the findings in the form of a "shopping list" of internal and external factors that will likely impact the organization in the short or long-term. This product may include a multi-page document. Analysts may also create a 3-by-3 matrix with internal factors (strengths and weaknesses) listed on the left-hand side, and external factors listed across the top of the matrix. This product can be presented on one page, allowing the decision maker to visually match the elements being analyzed.