SWOT or FODA Analysis: What is & How to Use It

SWOT or FODA Analysis: What is & How to Use It

A FODA analysis exists to help businesses make informed decisions by providing a clear understanding of their current position, as well as the opportunities and challenges they face. The goal of a FODA analysis is to capitalize on their advantages and address areas that need improvement, identify emerging trends and potential risks. All of this can help develop effective strategies to achieve success in their specific market. Because remember, it's always better use the strategy vs tactics.

What is FODA Analysis

FODA analysis is a strategic planning tool used to identify and analyze the strengths, weaknesses, opportunities and threats facing a business or organization. Essentially, provides powerful insights to evaluate the internal or external factors that may impact the success of an organization or project.

The strengths and weaknesses are internal factors, for example the organization's resources, capabilities, and limitations, meanwhile opportunities are threats are external factors, for example, competitors, regulatory changes, market trends.. 

After conducting the FODA analysis, organizations are allowed to use the information to develop a strategic plan that improves their strengths and opportunities while addressing as well, their weaknesses and threats. The main goal of FODA analysis is to help organizations develop specific strategies to succeed and make complete decisions that will lead them to success and growth.

What does it mean?

In a FODA analysis, each of the components (Strengths, Weaknesses, Opportunities and Threats) means the following:

Strengths: This one is an internal factor  defined by the positive attributes and characteristics of the project or organization that give it an added value or competitive advantage over their competitors. Examples of strengths could be a strong brand reputation, efficient processes, skilled employees, proprietary technology or a loyal customer experience. We recommend you to read Types of SOP and SOP for Business

Weaknesses: This one is an internal factor that includes the negative aspects of the project or organization that give it a disadvantage compared to their competitors. Examples of weaknesses could be an old or outdated technology, lack of resources or budget, poor customer service, lack of customer retention, low employee motivation or inefficient processes.

Opportunities: This component is an external factor that could potentially be leveraged to the advantage of the project or organization. Examples of this one could be new market trends, changes in regulations, increase productivity, emerging technologies, potential collaborations or partnerships.

Threats: This one is an external factor that could impact negatively on the project or organization. Some examples of threats could be increased competition, economic downturns, change customer preferences, natural disasters, new regulations. Some of them are the ones we can't control.

The main goal of FODA analysis is to identify these factors and define them precisely in order to use that information to develop a strategic plan that maximizes the organization's strengths and opportunities, and also minimize its weaknesses and threats.

How to do it Step by Step

Identify the objectives of the SWOT analysis

The main objective of a SWOT analysis is to provide a clear understanding of the organization's current situation, which includes its strengths, weaknesses, opportunities, and threats. By identifying these factors, the organization can develop a strategy that leverages its strengths and opportunities while addressing its weaknesses and threats. Here are some specific objectives of conducting a SWOT analysis

Gather internal and external information

Gather internal information about your company's strengths and weaknesses by reviewing and analyzing financial statements, marketing materials, gathering customer feedback, doing employee surveys and any other relevant internal data. This will give you an understanding of the resources and capabilities that your company has, as well as facilitate identifying areas of improvement.

On the other hand, gathering external information about external factors is the one that can impact on your company's success or performance, such as new industry regulations, competitors, customer needs… You can gather all this information through market research, industry reports, surveys, online resources and customer feedback.

Conduct an internal analysis of strengths and weaknesses

Internal analysis of strengths is done by identifying your company's strengths by looking at internal factors such as the company's culture, resources and capabilities. This will help you have a clear understanding of your current situation and the advantages you have over your competitors.

Internal analysis of weaknesses are done by looking at internal factors such as lack of resources, poor management, old technology, bad customer service. This could help you understand areas where your company needs to improve in order to remain competitive and achieve success.

Conduct an external analysis of opportunities and threats

External analysis of opportunities could drive us to know about changes in market trends, new customer needs or emerging technologies. This could help you identify potential areas for growth.

External analysis of threats could drive us to know more about increased competition, changes in regulations or economic downturns. This could help you identify potential risks and challenges that your company may face and develop a plan to mitigate them.

Conduct a SWOT matrix to visualize the results of the analysis

Once you have gathered all the relevant information, create a SWOT matrix to help you organize your analysis. The swot matrix displays the results of the SWOT analysis in a visual format that categorizes the internal and external factors identified in the SWOT analysis based on whether they are a strength, weakness, opportunity, or threat to the organization.

The SWOT matrix typically consists of four quadrants, one for each of the SWOT categories. The strengths and weaknesses are listed in the top row, while the opportunities and threats are listed in the bottom row.

Identify relationships between internal and external factors

Identify external threats that can exacerbate internal weaknesses: For example, if your company has a small customer base and relies heavily on one or two clients, a recession or economic downturn could have a significant impact on your business.

Identify external opportunities that can mitigate internal weaknesses. 

Identify strategies to leverage strengths and opportunities and address weaknesses and threats

Look for internal strengths that can help you take advantage of external opportunities. For example, if your company has a strong brand and a loyal customer base, you can use these strengths to expand into new markets.

Address weaknesses to mitigate threats: Identify internal weaknesses that can increase your exposure to external threats.

Implement and monitor the defined strategies

Once you have completed your DAFO analysis and identified your strategies, it is important to implement and monitor them to ensure success. Here are the steps to implement and monitor the defined strategies:

To start implementing strategies they have to be outlined in your action plan. Make sure to document the process, including obstacles or challenges encountered. You need to have in mind the objectives.

Monitor regularly the progress towards achieving those objectives, this will help you identify any areas that need any improvement.

Examples of SWOT analysis

Example 1: Company 

Strengths: Strong brand recognition, experienced leadership team, diversified product portfolio.

Weaknesses: Limited international presence, slow adoption of new technologies, high employee turnover rate.

Opportunities: Emerging markets, growing demand for sustainable products, strategic partnerships.

Threats: Intense competition, economic downturns, changing regulatory environment.

Example 2: Product

Strengths: Innovative design, high-quality materials, positive customer reviews.

Weaknesses: Limited distribution channels, high production costs, low brand recognition.

Opportunities: Growing demand for eco-friendly products, strategic partnerships with retailers, expansion into international markets.

Threats: Intense competition from established brands, changing consumer preferences, economic uncertainty.

Example 3: Service

Strengths: Highly skilled workforce, personalized customer service, competitive pricing.

Weaknesses: Limited service offerings, inadequate marketing efforts, inconsistent quality control.

Opportunities: Growing demand for online services, expansion into new markets, strategic partnerships with other businesses.

Threats: New competitors entering the market, changing regulations and policies, economic downturns.

Why is important?

  1. Identifies internal strengths and weaknesses
  2. Identifies external opportunities and threats
  3. Guides decision making
  4. Helps the company to be more competitive
  5. Facilitates the definition of smart goals and strategies
  6. Allows the company to anticipate changes in the environment
  7. Encourages communication and collaboration among members of the organization
  8. Helps prioritize resources and efforts
  9. Allows to detect risks and constraints before implementing new initiatives
  10. Provides a clear vision of the company's current situation and its future potential


In conclusion, a FODA analysis is a valuable tool for businesses to identify and assess their strengths, weaknesses, opportunities, and threats. By conducting a complete FODA analysis business can gain valuable insights and develop well-defined and effective strategies to achieve their work goals for 2023.

A FODA analysis will allow your business to remain competitive, adapt to changing environments, and avoide making mistakes at work.

Finally, we invite you to visit Uphint, a free tool that allows you to create step-by-step guides in an automated way. It will come in handy when you perform a SWOT analysis and realize opportunities for improvement and have to show them to others.

We recommend you to read about how works: step by step instructions template and in case you want to know how to write a how to guide you can visit the link.

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