​​​​SWOT Analysis Example​

SWOT Analysis.pngWhen it comes to making an impact on a business's employees and profits, it's critical that a vigilant leader weighs all possible choices and decisions. 

Through the determination to reap the most profits while thoroughly serving their stakeholders, many business leaders find success in basing their decisions on an examination of their companies' strengths, weaknesses, opportunities and threats. In short, a SWOT analysis is an optimal method of resolving business issues — and if you're looking for a SWOT analysis example, you've come to the right place.

Defining SWOT Analysis

An acronym for strengths, weaknesses, opportunities and threats, a SWOT analysis is a detailed compilation of a business's most predominant internal and external factors to consider during the decision-making process. Often used to determine the profitability of hiring new employees, introducing new products or services, moving forward with new projects, and expanding a business by opening additional locations, SWOT analysis can be helpful in making difficult business decisions that concern the risk of losing investments.

To simplify the information examined through this method, the four pillars of SWOT can be divided into internal and external factors. Internally, strengths and weaknesses are changeable factors that are directly controlled by the company, while externally, opportunities and threats exist outside of the company's control.

Internal Factors
Referring to a company's achievements, strengths and weaknesses included in a SWOT analysis can be any aspect of a business that has contributed to or minimized success. Depending on the type of industry and the business's financial goals, a SWOT analysis can base strengths and weaknesses on a variety of profit components.

External Factors
Unlike the internal issues, opportunities and threats are primarily dictated by the economy, advancements in technology, consumer interests, competition and other contributors that are beyond the company's control.

Elements of SWOT Analysis

Before business leaders can examine the strengths, weaknesses, opportunities and threats of their company, they must first identify them. Because the type of business, its financial state and plan for the future are all important factors to acknowledge when creating resolutions, these pillars can include fluid information. The following are SWOT analysis examples that may serve as a helpful reference when considering this method for your own decision-making strategies.

When analyzing a business's strengths, start by identifying its most significant internal assets and build plans based on its advantages. Consider how the business has bested its competitors and why customers keep returning to purchase its products. You may regard factors such as:

  • Appeal of the product
  • Conducted research to prove a product's function
  • Product guarantee policy
  • Ways in which the product is different from others like it
  • Successful marketing campaigns
  • Suitable pricing model
  • Affordability in diverse areas
  • Capable of adapting to changes in the economy
  • Strong relationships with customers
  • Capable employees
  • Effective employee training
  • Remaining relevant amid changing consumer trends
  • Weaknesses

Identify a company's weaknesses by detecting where there is room for improvements to be made. Determine which obstacles may prevent the organization from reaching its financial goals, and develop an action plan to eliminate these negative factors. Identified weaknesses may include:

  • Low budgets
  • Lack of proper investments
  • Low-quality marketing
  • Need for higher-value products
  • Low wages resulting in low employee retention rates
  • Overworked employees
  • Lack of employee benefits
  • Staffing deficiencies
  • Insufficient employee training services
  • Ineffective or irrelevant products
  • False or misleading advertisements
  • Budgetary restrictions
  • Need for market research
  • Low-quality products resulting in frequent customer returns


  • Opportunities can be presented in a variety of ways, which is why it's important to search for all possible positive outcomes in every situation. When conducting a SWOT analysis, pay close attention to the successes of competing companies and any low-risk situations that may arise. Opportunities may show up in the form of:
  • Consumer trends
  • Increasing popularity of a certain product
  • Market research to determine consumer interests
  • Sudden need for a specific product
  • Upcoming events
  • Available sponsorship promotions
  • Event advertising space
  • Real Estate
  • Newly available properties for new locations
  • Franchise interests
  • Regions with limited competition
  • Employee training
  • Available skills-training partnerships
  • Affordable training programs


  • Identify threats by determining any possible areas for profit loss that exist outside of the company's domain. Because external threats can potentially lead to the destruction of a company, it's vital that leaders calculate risk when making decisions. Alarming threats to examine as part of a SWOT analysis may include:
  • Economic downturn
  • Weakened economy that may prompt customers to stop buying non-essential products
  • Loss of investments
  • Insufficient funds to produce new products
  • Bankruptcy of stores that sell a business's products
  • Shifts in consumer trends
  • Decreased popularity of a specific product
  • Increased popularity of competing products

A SWOT Analysis Example

Examining a SWOT analysis example is perhaps the best way to fully understand how all four pillars of a SWOT analysis combine to ease the difficulties inherent in the business decision-making process. For this example, consider a restaurant entrepreneur who is faced with the decision to open a second location. To weigh the pros and cons of growing the business, the restaurant owner uses a SWOT analysis to determine the best choice.

Located in a small town with a population of 28,000 people, the owner's first and only restaurant has been open for three years and has enjoyed tremendous success. Serving as one of the town's only two Italian restaurants, it operates against limited competition and has established a substantial base of regular customers with its one-of-a-kind recipes and moderately priced menu items. Given the restaurant's history, the owner believes a second location would be successful in a similar small town that lacks Italian cuisine options.

While the majority of the town's adult population works full time at a large factory located within the county, the restaurant has become a popular place for local students to work after-school jobs. The owner requires all employees to be at least 18 years old, which means many staff members begin working part time as high school seniors, the leave the restaurant the following year to attend college. This staffing trend has contributed to a low employee retention rate and a monetary loss from investing in an advanced employee training program. The owner believes a second location would benefit from a staff of dedicated, full-time employees, but that may be impossible to establish in a similar small town.

A new suburban development is being constructed in a town 60 miles away from the restaurant. This new project will expand the community to make room for new homes, stores and restaurants. Land for nearly 200 new homes has already been purchased by families who plan to relocate, and two major chain grocery stores have already begun construction. With a growing population and affordable properties, the restaurant owner believes this is the ideal location to open a second restaurant.

While the restaurant owner is confident a second location will succeed against limited competition, he is unsure how the restaurant will survive in a town offering a variety of popular, franchised Italian restaurants. Because the new development is still under construction, it's possible that other restauranteurs may decide to expand to that location, increasing competition. The restaurant owner is concerned about the risk of investing in a restaurant that may not dominate its competition.

Whether the restaurant owner decides to open a second location in the new development or invest in other opportunities, the SWOT analysis method serves as a helpful tool in identifying the greatest areas of risk and, ultimately, making the best decision for the business.

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