The SWOT matrix is one of the most widely used frameworks for situation formulation in city planning knowledge and practice. However, there is no uniform understanding of its nature and components, and such differences in interpretation may lead to divergent and, at times, conflicting analyses and strategies. This study adopts a qualitative approach informed by critical realism to critically review the conceptual logic of SWOT. To this end, semi-structured questionnaires were distributed by email to faculty members and professionals active in the field of city planning, resulting in 30 completed questionnaires. The data were analysed using qualitative content analysis and abductive interpretation. The findings indicate that differences in the application of SWOT largely stem from three conceptual ambiguities: the nature of “points” and their relationship to reality or actors’ perceptions; the criteria for distinguishing between the internal and external environments; and the understanding of SWOT as a tool for identifying and analysing the existing situation. Accordingly, SWOT is not a tool for initial recognition, but rather a framework for organising analysed knowledge to support decision-making and strategy formulation. A “point” should refer to a specific and identifiable component of the system and its surrounding environment, while the distinction between internal and external environments should be determined based on the component’s relationship to the system and the possibility of intervention. Furthermore, strengths, weaknesses, opportunities, and threats are not inherent attributes of components; rather, they indicate the position of these components in relation to planning objectives. Finally, by reconstructing the logical relationships among these concepts, a checklist was developed to determine the position of components of the planning environment within the SWOT matrix, which can contribute to reducing conceptual ambiguities in its application.