The situation analysis potentially produces a long list of strengths, weaknesses, opportunities, and threats (SWOT). This chapter presents the steps in a SWOT analysis, summarizes the situation analysis, and discusses different value strategies and positioning options. It looks at two general guidelines in relation to the SWOT analysis: the need for clear definitions, and the need for a future perspective. An important factor to consider in choosing objective or subjective methods is whether it is expected that 'the circumstances will strongly change'. Objective methods are based on patterns from the past and are thus less appropriate to predict changes in trends. The brainstorming phase of the SWOT analysis is crucial and requires a high level of creativity and empathy. The SWOT analysis forms the link between the situation analysis (internal analysis and external analysis) and the strategy formation.