The Complete Guide to Types of SWOT Analysis and When to Use Them

A SWOT analysis is a tried and true strategic planning technique used by businesses to evaluate their competitive position in the marketplace. By analyzing a company’s Strengths Weaknesses Opportunities, and Threats, businesses gain valuable insights to make informed decisions and plan their next moves.

But did you know there are actually several types of SWOT analysis frameworks beyond the traditional version? While the classic SWOT framework is versatile enough for most situations, alternative versions provide a fresh perspective tailored to specific goals and scenarios.

In this comprehensive guide we’ll cover the various types of SWOT analysis and when to use each one for maximum impact.

What is a SWOT Analysis?

First, let’s do a quick refresher on what a SWOT analysis entails. SWOT stands for:

• Strengths – Internal attributes or advantages that set you apart. These could include skills, expertise, resources, systems, etc.

• Weaknesses – Internal attributes that put you at a disadvantage compared to others. These could be lack of skills, outdated technology, high costs, etc.

• Opportunities – External factors you can take advantage of to grow and improve. These include trends, partnerships, new target markets, etc.

• Threats – External factors that could negatively impact your success. These include competition, regulation changes, economic downturns, etc.

The goal of a SWOT analysis is to leverage your strengths, overcome weaknesses, capitalize on opportunities, and mitigate threats. It provides strategic insights to help you gain a competitive edge.

Now let’s look at the various SWOT analysis frameworks you can use.

Traditional SWOT Analysis

The traditional SWOT analysis framework focuses on your overall competitive position. It’s an all-encompassing look at the internal and external factors affecting your business.

The traditional SWOT analysis helps answer questions like:

• What are our competitive advantages?
• What are we lacking compared to the competition?
• What market opportunities should we prioritize?
• What external threats do we need to prepare for?

It’s a “big picture” overview of the current state of your business. The traditional SWOT analysis framework is versatile enough for most strategic planning needs and is a good default option.

TOWS Analysis

TOWS analysis is an extension of the traditional SWOT analysis. The TOWS matrix helps generate strategic options by examining the Threats, Opportunities, Weaknesses, and Strengths facing your organization.

Specifically, TOWS analysis looks at:

• SO strategies – Ways to use your Strengths to take advantage of Opportunities
• WO strategies – Ways to improve Weaknesses by taking advantage of Opportunities
• ST strategies – Ways to use Strengths to avoid Threats
• WT strategies – Ways to minimize Weaknesses and avoid Threats

While the traditional SWOT analysis simply identifies factors in each quadrant, TOWS analysis takes it a step further to generate strategic options based on those factors. TOWS provides an action plan based on your SWOT profile.

PESTEL Analysis

PESTEL analysis examines external factors related to Political, Economic, Social, Technological, Environmental, and Legal aspects affecting your business.

Some sample questions PESTEL analysis can help answer:

• How will upcoming elections impact our industry?
• Are changing economic conditions opening up new target markets?
• What social trends are driving consumer demand?
• How can we take advantage of new technologies?
• What environmental regulations apply to our operations?
• How will changes to employment laws impact HR policies?

PESTEL provides an in-depth look at the external opportunities and threats related to a specific situation. It’s useful for exploring the context around a strategic decision. Many organizations will conduct a PESTEL analysis in conjunction with a SWOT analysis to cover both internal and external factors comprehensively.

Porter’s Five Forces

Porter’s Five Forces examines the competitive landscape within your industry. It looks at five key factors:

• Competition from rival sellers
• Threat of new market entrants
• Bargaining power of suppliers
• Bargaining power of customers
• Threat of substitute products

Porter’s Five Forces helps answer questions like:

• How intense is competition between existing players?
• What barriers make it easy or difficult for new competitors to enter the market?
• How much bargaining power do suppliers and buyers have?
• Are there readily available substitute products customers can purchase instead?

This model analyzes the level of threats and opportunities arising from competitive forces in your industry. Like PESTEL, Porter’s Five Forces also provides an in-depth external analysis to complement a SWOT analysis.

VRIO Analysis

The VRIO framework examines your company’s internal resources and capabilities to determine their strategic potential. VRIO stands for:

• Value – Does the resource provide value to customers?

• Rarity – Is the resource unique compared to competitors?

• Imitability – Is the resource difficult to imitate?

• Organization – Is your company organized to fully exploit the resource?

Resources that score highly across all four criteria have the most strategic potential, while those that score low on several factors may be candidates for divestment.

VRIO provides an internal complement to Porter’s Five Forces competitive analysis. together, VRIO and Porter’s Five Forces provide a comprehensive internal and external assessment.

When to Use Each SWOT Analysis Type

Now that we’ve covered the various SWOT analysis frameworks, when should you use each version?

• Use the traditional SWOT analysis as an all-purpose tool to evaluate your overall competitive position. It provides a “big picture” overview before diving into specifics.

• Use TOWS analysis when you already have a SWOT profile and want to generate strategic options tailored to your situation.

• Use PESTEL analysis when you need to examine how external political, economic, social, technological, environmental, and legal factors will influence your strategic decisions.

• Use Porter’s Five Forces analysis when you want to analyze the competitive landscape facing your business within your industry.

• Use VRIO analysis when you want to determine which internal resources and capabilities have the most strategic potential.

The traditional SWOT framework is versatile enough for most needs, but incorporating some of these variations can provide unique strategic insights tailored to your specific context and goals.

You don’t necessarily need to choose one type of SWOT analysis over the others. Often it’s best to conduct 2-3 complementary analyses to get a comprehensive viewpoint.

For example, you could combine a Porter’s Five Forces analysis, PESTEL analysis, and VRIO analysis together with a traditional SWOT to cover all your bases.

Determine which tailored frameworks best fit your current situation and strategic questions at hand. Leverage the different types of SWOT analysis for a dynamic perspective.

SWOT Analysis Process and Best Practices

Regardless of which type of SWOT analysis you choose, follow these best practices to conduct an effective analysis:

• Involve a diverse team – Don’t conduct SWOT solo. Include managers across departments for diverse insights.

• Gather data – Leverage market research, financial reports, customer feedback and other sources to back up your analysis with facts.

• Focus on the critical few – Avoid exhaustive lists by identifying the most significant 3-5 factors within each quadrant.

• Be specific – Get detailed with factors and assessments, rather than vague generalities.

• Compare to competitors – Assess your SWOT profile relative to competitors to identify advantages and disadvantages.

• Keep it current – Revisit your SWOT analysis frequently as internal and external factors evolve.

• Align with strategy – Use SWOT insights to directly inform your priorities, initiatives, and next steps.

With these best practices in mind, conduct your SWOT analysis, generate strategic options, and execute on your plan. Rinse and repeat frequently to keep your strategy grounded in the most current reality.

SWOT Analysis Templates

To conduct a structured SWOT analysis, use a template to keep the process organized. Here are some free SWOT analysis templates to choose from:

• SWOT Analysis Template from Smartsheet
• SWOT Analysis Worksheets from Vertex42
• SWOT Analysis Templates from Creately

These templates provide matrices to populate with your SWOT factors. Many also include guidance and examples.

Pick a template in your preferred format (e.g. Excel, Powerpoint, Word, etc.) to facilitate your analysis. Having a structured template keeps the process focused and consistent.

SWOT Analysis Example

Here is an example of a completed SWOT analysis for a fictional coffee shop chain to illustrate how to approach the framework:

Strengths