SWOT analysis - strengths, weaknesses, opportunities and threats

OVERVIEW

What is it?

SWOT analysis is a strategic analysis tool for use in context analysis. The acronym refers to the domains it considers: Strengths, Weaknesses, Opportunities and Threats. It combines an assessment of the strengths and weaknesses of an organisation, geographical area or sector with assessment of the opportunities and threats posed by the environment.

What can it be used for?

SWOT analysis considers internal and external factors to maximise the potential of strengths and opportunities, while minimising the impact of weaknesses and threats.
When used as a tool for context analysis, SWOT complements PESTEL by identifying possible strategic approaches. It is also closely linked in the design phase to public policy analysis and stakeholder analysis; these in turn are often integrated in PESTEL in the preliminary identification phase.

When can it be used?

SWOT analysis is particularly relevant in context analysis as a complement to PESTEL. However, it can be used for many purposes during implementation (e.g. to make strategic choices if changes in the context are identified) or evaluation to ensure that the implemented strategy is appropriate to the situation described in the analysis.

Who can use it?

EU staff
Relevant partners
Stakeholders or relevant experts during implementation or evaluation

What are its strengths?

Quickly underlines the adequacy (or inadequacy) of a strategy, in relation to the problems and issues under consideration and in supporting decision-making processes.

What are its limitations?

Even when well conceived, SWOT anaysis is subjective. It should therefore involve a representative number of stakeholders.
Distinguishing between internal and external factors may sometimes be challenging.

PRACTICAL APPLICATION

Key elements

SWOT analysis follows four key steps:

Step 1: Clearly define the scope and objectives of the analysis. In context analysis, the scope and objectives may be defined during the programming phase, and SWOT analysis may follow conduct of a PESTEL (or similar) analysis.

Step 2: Determine scope of the analysis along the four dimensions. SWOT analysis implies an assessment of opportunities and threats based on evaluation of contextual factors. Planning its focus, size and possible sub-divisions (by theme, types of actors, etc.) is critical. The sequence and methods to determine and study the four dimensions (strengths, weaknesses, opportunities, threats) may greatly differ. See Table 1.

Table 1: Factors to consider in SWOT

	Favourable for achieving objectives	Unfavourable for achieving objectives
External origin	Opportunities Positive externalities which can provide an advantage for the intervention, but remain beyond its control	Threats Negative externalities which can put the intervention at risk, but remain beyond its control
Internal origin	Strengths Positive internal factors controlled by the organisation or country, and which provide foundations for the future	Weaknesses Negative internal elements which are controlled by the organisation and to which key improvements can be made

Step 3: Synthesise findings. Based on the information gathered, formulate conclusions in line with the guidance in Table 2.

Table 2: Connection between SWOT components

Internal approach	List of the strengths	How can strengths be maximised?	A study of the reasons why strengths overcome weaknesses	How can strengths be used to take advantage of opportunities? How can strengths be used to reduce threats?	How can weaknesses be corrected to take advantage of opportunities? How can weaknesses and threats be minimised?
	List of the weaknesses	How can weaknesses be minimised?
External approach	List of the opportunities	How can opportunities be maximised?	A study of the reasons why opportunities minimise threats
	List of the threats	How can threats be minimised?

Source: Adapted from SWOT analysis. Capacity4Dev – EuropeAid. Evaluation Methodological Approach. Evaluation Tools.

Step 4: Use SWOT findings to inform the intervention's logic. In context analysis, the final step consists of moving toward the design of a specific intervention, building it so it is rooted in the context and in line with the EUD country mandate.

Requirements

Data/information. Regardless of the specific methodology applied, preparation of a SWOT analysis should include, at a minimum, documentary analysis and interviews with key resource people.

Time. The time needed will vary widely depending on the SWOT's scope and already available data and information. A minimum of two weeks is generally needed to gain an understanding of the macro environment.

Skills. N/A

Facilities and materials. N/A

Financial costs and sources. If external expertise is required, funds should be made available to cover the costs associated with fees (for approximately two to four weeks), travel expenses and logistics. These funds may come from the project itself or through other EC instruments such as a framework contract or a technical cooperation facility.

Tips and tricks
It is not necessary to capture all the details in analysing context. Keep the focus on any anticipated changes which may affect the objectives of the intervention.

RESOURCES

Where to find it

The European Commission. Evaluation Unit from EuropeAid. SWOT analysis. Evaluation Methodological Approach. Evaluation Tools.

Complementary guides, methodologies and tools

UNICEF, 2015. SWOT and PESTEL. Understanding your external and internal context for better planning and decision-making.

United Nations Development Group (UNDG), 2017. Common country analysis. UNDAF Companion Guidance.

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