As a physician executive, you will participate in strategic planning, goal setting, and project management. As a business leader, you will need to assess the risks and benefits of pursuing various new initiatives.

One of the tools used by business leaders to do such an assessment is a SWOT analysis. SWOT is an acronym for Strengths, Weaknesses, Opportunities and Threats.

The  development of the SWOT Analysis (or Matrix) has been attributed to Albert S. Humphrey, although he disavowed having invented it. It is a conceptual tool that has been used by countless business leaders to assist in planning. As a physician manager, you should become very comfortable using it.

SWOT Analysis

What Are the Components?

The strengths and weaknesses generally refer to internal  characteristics of an organization. This includes financial resources and performance, human resources, branding, and loyalty of customers. It also might include cultural issues, such as whether your organization or division is nimble or slow-moving.

The opportunities and threats describe external considerations. How is the local economy doing? Is the market growing or shrinking? What are the demographics of your clients? Is your competition strong or weak? What is the regulatory environment like? Are there major legal hurdles to entering a new market?

When to Use a SWOT Analysis

They are commonly used when making a major business decision. For example, they may be used to flesh out a decision about:

  • Adding a new service line (e.g., open heart program, neurosurgical program, hospitalist coverage)
  • Expanding into a new geographic market (e.g., new clinic, freestanding emergency room or ambulatory surgery center)
  • Merging or acquiring another entity (e.g., hospital or medical group)
  • Implementing a new electronic medical record


Rather than try to explain each of the components in detail, let's examine an example of a hospital system's imaginary plan to open a new urgent care clinic.

SWOT Analysis – Fast and Furious Urgent Care Start-up


  • Strong brand recognition of the hospital system
  • Financial strength – good reserves and cash flow
  • Strong interest by medical group primary care department to staff the clinic
  • Strong management team with expertise in opening new clinics in retail settings


  • No expertise in urgent care
  • Multiple competing strategic initiatives already in place
  • Recent difficulty in recruiting support staff
  • Current gap in medical group leadership position (due to a retirement)


  • Underserved population – there is a demonstrated need for primary care services
  • Several of the medical group live in the area of the proposed clinic
  • There is vacant rental space available at low cost
  • Large number of employers in the area would support workers compensation business
  • The community is supportive of a new clinic and job creation


  • Large percentage of uninsured in the market
  • Competitor may be looking to establish a clinic in the same market
  • Some of the hospital medical staff (not employed) may be threatened by opening a hospital based clinic in their backyard

Next steps include addressing the weaknesses and threats by:

  • hiring a new medical group leader that has experience in the urgent care business
  • developing a written plan for staffing the urgent care center
  • updating the market analysis to see if the insurance coverage has improved
  • discussing with local physicians how an urgent care center might impact their practices
  • creating a pro forma with monthly projections for the first year and a five year projected budget (by the CFO)

This example is abbreviated, but you can see how the SWOT analysis can drive further study and preparation. Ultimately, it will help clarify the decision to move ahead with a large project or not.

Two Final Thoughts

  1. You will impress your CEO and enhance your indispensability if you present a SWOT analysis in anticipation of annual goal setting or a proposal for a new service line.
  2. You will be a much better executive team member by preparing for strategic planning sessions by thinking about the SWOT categories and identifying specific questions to explore.

Have you used a SWOT analysis to assess a proposal? What were the results?