Initially Satisfactory, Opportunity, Fault and Threat (SOFT) became Strength, Weaknesses, Opportunity and Threat (SWOT).

S - Strength - Internal factors which are positive in the organizations growth. Good at present from within the organization/its environment.
W- Weakness - Internal factors which are bad at present.
O - Opportunities - External factors which can help organization grow or achieve its goals. Good in future (external)
T - Threats - External factors which can harm organization in achieving its goals. Bad in future from external environment

	Good	Bad
Present (Internal forces)	Strength	Weaknesses
Future (External forces)	Opportunity	Threat

When to use

• Business strategy planning
• Assessment- Entering in to a new market
• Assessment - Launching a new product
• Assessment - A new business idea
  
• Evaluating the competition
• Review and analysis of business proposition
• Position of a company and its business in the market
• Assessment before acquisition or partnership 

How

Identify S W O T by finding out present good/bad things internally and future good/bad things you can foresee. These are some example categories to find out these things:

Strengths	Weaknesses
Unique thing about organization or product What are your capabilities? Core experience and knowledge area Market reach Location advantage compared to others or suitable for a business Work of research, niche in an area Competitive edge Cost of your product or service Value addition People, assets and financial strength Environment (infrastructure, systems and processes)	Market reputation Gaps in capability and skills Weakness in knowledge and lack of experience Limited or limitation in market presence Distribution challenges, after sales service track record Behind competition in areas Issues of cash-flow, funds Leadership and working culture of the organization Behind competition/late in the market
Opportunities	Threats
New markets New trends - lifestyle, technology, business Competition's weaknesses Niche areas Need of better services and products (value addition) New business due to globalization  Usual big business and contracts Merger/acquisition and partnership	Local and global economy Demand (less) Finance and cash reserves Legal and political New competitors New trends in technology and lifestyle Resource availability (human and other)

Above list provides list of good and bad things or areas. What actions to take can be interpreted from those points but it is better to identify the actions using a systematic way 2X2 SWOT matrix. Using this one can find out areas where  there are opportunities as well and organization has strength so those areas should be leveraged and should be priority areas of focus. Similarly other combinations provide different actions or areas of focus.

2x2 SWOT Matrix

	Strengths	Weaknesses
Opportunities	Strength/Opp List of priorities	Weakness/Opp List of corrective measures
Threats	Strength/Threats List of areas easy to handle	Weakness/Threat List of risk areas

Strength/Opportunities - First priorities - Where should we focus on ?
Weaknesses/Opportunities - Good options if overcome challenges/weaknesses - What should we correct?
Strength/Threats - Can be defended - What challenges can we handle?
Weakness/Threats- Risk - What risks we have to plan for?

Related things

PEST analysis

To analyse market and potential considering external factors. Whereas SWOT analyses business or proposition

Porter's five forces model

To assess and analyse competitive position of a business.

References

Case studies and samples:
https://dspace.ist.utl.pt/bitstream/2295/55545/freematerialsinword/free_SWOT_analysis_template.doc
http://www.cps.ca.gov/workforceplanning/documents/SampleCompletedSWOTAnalysis.pdf
http://riccentre.ca/wp-content/uploads/2012/01/Session-1-Takeaways-Guidlines.pdf
http://www.mindtools.com/pages/article/worksheets/SWOTAnalysisWorksheet.pdf