A SWOT analysis is frequently used by company leaders to assess competitive positions and possibilities. SWOT is an acronym that stands for four categories of assessment -- strengths, weaknesses, opportunities and threats. The specific elements used to assess competitive positioning are strengths and weaknesses. The opportunities section is used to analyze undiscovered revenue streams or new customers.

Relative Strengths

The premise of assessing your company strengths is that you want to identify the things you do better than competitors. Knowing your strengths allows you to reinforce, review or revise your company strategy. It also allows you to emphasize your superior benefits to target customers in advertising and other promotions. If you find that your product quality is better than that of industry competitors, you would likely focus on quality development and promotions that target customers wanting goods of superior quality.

Relative Weaknesses

Though it isn't as fun to analyze your weaknesses, it is important to understand areas in which your company falls short of competitors. Low-cost or discount providers typically can't offer the product quality or services of competitors, for instance. This causes them to focus on price in promotions. If your location is less convenient for customers, you need to prepare to offset that with benefits like online purchase opportunities or exclusive products.

Finding Opportunities

Whereas strengths and weaknesses look at your current competitive positioning, the opportunities section of your SWOT is used to look to the future. Thriving companies that endure always keep an eye out for new opportunities. These possibilities for business growth may include new product or service development, emerging customer markets, business partnerships or lower costs of business in a potential marketplace. A perfect alignment exists where your core strengths fit with a pending opportunity for growth.

The Other Future Consideration

The "T" in SWOT stands for threats. While this element isn't part of your current status or a look at possibilities, you do need to address potential threats to your business. Planning ahead can help you avert or downplay the implications of threats. New competitors, changing government regulations, changing technology, environmental factors and changing societal attitudes are among the many possible types of threats to your business. Some small businesses are ruined by unanticipated threats.