ROI 【🔏CLASSIFIED CASE FILE】 No. X002 | What is SWOT

Detective's Note: A method called "SWOT Analysis" frequently witnessed in boardrooms and strategic planning departments. It's an analytical framework that creates a comprehensive overview of companies and businesses through the initials of four English words. Uncover the essence of strategic planning hidden within the 2×2 matrix of internal/external and positive/negative factors. Expose the true identity of this mysterious analytical method that many companies utilize yet few understand its real power.

What is SWOT - Case Overview

SWOT (Strengths/Weaknesses/Opportunities/Threats) analysis. This method, believed to have originated at Stanford University in the 1960s, plays a central role in strategic planning for companies, businesses, projects, and even individuals. Among our clients, it has become so established that "strategic analysis equals SWOT" is common, yet surprisingly few understand its true application methods.

Investigation Memo: A method that organizes internal and external factors, plus and minus factors into 2×2 quadrants. Appears simple at first glance, but deep insights for understanding the essence of enterprises are hidden behind it.

Basic Structure of SWOT - Evidence Analysis

Primary Evidence: The Four SWOT Quadrants

Strengths - Internal Positive Factors

"Advantages that the company/individual possesses"
"Differentiation factors against competitors"
"Available resources and capabilities"

Weaknesses - Internal Negative Factors

"Areas where the company/individual is lacking"
"Elements inferior to competitors"
"Areas requiring improvement"

Opportunities - External Positive Factors

"Favorable market environment conditions"
"External changes that can be leveraged"
"Growth opportunities"

Threats - External Negative Factors

"Unfavorable market environment conditions"
"Competitor movements and new entrants"
"Business risk factors"

Evidence Analysis: The excellence of this structure lies in clearly separating internal factors (SW) from external factors (OT). By distinguishing "what you can control" from "what you cannot control," the framework reveals strategic priorities.

SWOT Implementation Procedure - Investigation Methods

Investigation Finding 1: Information Gathering Phase - Collection of internal data (financial statements, organizational charts, business flows, etc.) - External environment research (market trends, competitor analysis, PEST Analysis, etc.) - Stakeholder interviews

Investigation Finding 2: Identification of Each Quadrant

Case Evidence (IT Company Example):

Strengths:
・Excellent engineering team
・Patent technology ownership
・High customer satisfaction
・Brand recognition

Weaknesses:
・Insufficient sales capability
・Limited fundraising ability
・Lack of overseas expansion experience
・Weak marketing structure

Opportunities:
・Expanding DX demand
・Government IT investment promotion policies
・Competitor withdrawals
・Potential entry into emerging markets

Threats:
・Entry of major corporations
・Technology obsolescence risk
・Serious talent shortage
・Economic downturn

Investigation Finding 3: Cross Analysis Implementation - SO Strategy: Strengths × Opportunities = Aggressive Strategy - WO Strategy: Weaknesses × Opportunities = Improvement Strategy
- ST Strategy: Strengths × Threats = Differentiation Strategy - WT Strategy: Weaknesses × Threats = Defensive Strategy

The Power of SWOT - Hidden Truths

Critical File 1: Discovering Blind Spots Through Comprehensive Overview Systematically identifies factors easily overlooked when buried in daily operations. Particularly effective at significantly reducing the risk of missing external environmental changes.

Critical File 2: Visualization of Strategic Options Cross-analysis of the four quadrants reveals multiple strategic options simultaneously. Enables multifaceted approaches without being fixated on a single strategy.

Critical File 3: Formation of Common Understanding Within Organizations When people from different departments and positions discuss using the same framework, it promotes unified recognition and constructive strategic discussions.

SWOT Limitations and Precautions - Potential Dangers

Warning File 1: Risk of Superficial Analysis Cases frequently occur where satisfaction comes from merely listing keywords in each quadrant without connecting to deep analysis or concrete actions. There's a danger of only achieving a "sense of completion."

Warning File 2: Intrusion of Subjective Judgment Particularly in determining strengths and weaknesses, emotional judgments tend to intrude rather than objective facts. Objective backing such as competitive comparison data and customer feedback is essential.

Warning File 3: Inadequate Response to Dynamic Changes Cases where once-created SWOT is treated as fixed and updates according to environmental changes are neglected. In today's world of rapid market environment changes, periodic reviews are necessary.

Warning File 4: Difficulty in Prioritization Even when many factors are listed in each quadrant, judgment of which is most important tends to become ambiguous. Separate prioritization by importance and impact is needed.

SWOT Variants and Related Methods - Related Case Files

Related Evidence 1: TOWS Analysis

Reverse order of SWOT, emphasizing external to internal environment influence
Analysis in order of T(Threats) → O(Opportunities) → W(Weaknesses) → S(Strengths)

Related Evidence 2: Integration with 3C Analysis

Method of incorporating 3C Analysis results of Customer, Competitor, Company
into SWOT framework

Related Evidence 3: Combination with PEST Analysis

Reflecting PEST Analysis results of Political, Economic, Social, 
Technological factors into SWOT external factors (OT)

Related Evidence 4: Quantified SWOT

Assigning importance (1-5 points) and feasibility (1-5 points) to each factor,
implementing prioritization through quantification

Conclusion - Investigation Summary

Detective's Final Report:

SWOT Analysis is "the foundation of strategic planning foundations," and there are solid reasons for its widespread adoption. The four-quadrant organization appears simple at first glance, but through clear separation of internal/external factors and balanced analysis of positive/negative factors, it becomes a powerful tool for promoting strategic thinking.

What was particularly interesting in this investigation was that SWOT's true value lies not in "creating it" but in "generating strategic options through cross-analysis." The SO, WO, ST, and WT strategic patterns reveal strategic possibilities that wouldn't be visible individually.

However, the reality that SWOT often ends with "just doing it" in many organizations was also highlighted. The key to extracting the true value of this method lies not in superficial keyword listing but in deep analysis based on objective data and implementation into concrete action plans.

Additionally, SWOT demonstrates greater power when combined with other analytical methods. By understanding external environments in detail through PEST Analysis and clarifying competitive situations through 3C analysis before integrating into SWOT, more precise strategic analysis becomes possible.

Strategic Analysis Maxim: "Excellent strategy is drawing a path that leverages company strengths to seize external opportunities while improving weaknesses to avoid threats."

Case Closed