Framework
Term

SWOT

A 2×2 strategy framework that maps a position across four dimensions: internal Strengths and Weaknesses (what the team controls) and external Opportunities and Threats (what the market is doing around it). Developed by Albert Humphrey at Stanford in the 1960s.

SWOT is a strategy framework that maps a position — usually a company, product, or specific decision — across four cells:

  • Strengths (internal, helpful): what advantages does the position have today?
  • Weaknesses (internal, harmful): what limits the position today?
  • Opportunities (external, helpful): what trends or gaps could the position exploit?
  • Threats (external, harmful): what external forces could damage the position?

The framework was developed by Albert Humphrey at the Stanford Research Institute in the 1960s and remains the most-used starting point for strategy work because the four-cell structure is simple enough to use in 60 minutes yet structured enough to force balanced consideration of upside and downside.

What a good SWOT entry looks like

Each cell entry should be:

  • Specific: "Margin compression — Q4 2023 auto gross margin ex-credits was ~16%" beats "weak financials"
  • Defensible with evidence: cite a number or named source
  • Actionable: implies a decision the strategy can use

Entries that are vague ("strong brand") or aspirational ("could be the market leader") are SWOT failure modes — they look rigorous but don't drive decisions.

When to use SWOT

  • Strategic decisions where both internal and external factors matter
  • New CEO assessment of an inherited position
  • Investment due diligence on an unfamiliar company
  • Mid-project re-set when initial assumptions look stale

When not to use SWOT

  • Tactical day-to-day decisions (overkill)
  • Market-structure analysis (Five Forces is sharper)
  • Validating an already-made decision (motivated reasoning will fill the Strengths and Opportunities columns)

Related

See also

Nearby terms

All terms →
Runway

The number of months a company can continue operating at its current spend before exhausting its cash. Runway = current cash ÷ monthly net burn. It is the most important number on a startup CEO's dashboard.

Segmentation

The practice of dividing a market into groups that share buying behavior, needs, or willingness to pay. Useful segmentation produces groups large enough to matter and homogeneous enough to act on differently.

TAM / SAM / SOM

Three nested market-sizing figures: Total Addressable Market (the whole opportunity), Serviceable Addressable Market (the slice your offering can reach), and Serviceable Obtainable Market (the slice you can realistically win in the near term).

Time to Value (TTV)

The time between a customer signing up for a product and experiencing its first meaningful value. Short TTV correlates strongly with retention; long TTV correlates with churn before users ever see what the product can do.