When conducting a SWOT analysis as a tool to shape a company's business strategy, the internal factors of a business are its Strengths and Weaknesses. The external factors in the acronym are Opportunities and Threats.
Strengths and weaknesses can be controlled by the company, and it is a self-evaluation tool. Strengths include what a business does well and what gives the business the edge over competitors. Weaknesses also must be evaluated. Weaknesses could include such things as poor time management or goods that are not profitable. By assessing weaknesses, the company can improve in areas that are holding it back.
The external factors that can affect a business are a company's opportunities and threats. Opportunities consist of looking at short-term and long-term goals and assessing those goals as to where the company is at the present. It may also include how to target more customers or how to do more with current customers. Threats include evaluating the competition and noting what they may be doing better than your company. In order to stay competitive in the market, a business needs to know what companies are at the top of that market.
A SWOT analysis allows a business to combine strengths and opportunities to allow for growth while improving upon weaknesses and eliminating threats.