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The SWOT Matrix

A firm should not necessarily pursue the more lucrative opportunities. Rather, it may have a better chance at developing a competitive advantage by identifying a fit between the firm's strengths and upcoming opportunities. In some cases, the firm can overcome a weakness in order to prepare itself to pursue a compelling opportunity.

To develop strategies that take into account the SWOT profile, a matrix of these factors can be constructed. All the best management models have four quadrants, and the SWOT matrix is no exception. You use each of the four quadrants in turn to analyze where you are now, where you want to be, and then make an action plan to get there. The SWOT matrix (also known as a TOWS Matrix) is shown below:

Wow

SWOT / TOWS Matrix

	Strengths	Weaknesses
Opportunities	S-O strategies	W-O strategies
Threats	S-T strategies	W-T strategies

S-O strategies pursue opportunities that are a good fit to the company's strengths.
W-O strategies overcome weaknesses to pursue opportunities.
S-T strategies identify ways that the firm can use its strengths to reduce its vulnerability to external threats.
W-T strategies establish a defensive plan to prevent the firm's weaknesses from making it highly susceptible to external threats.

How to do a SWOT analysis

Regardless of whether you or your team are future planning for specific products, work, personal or any other area, the SWOT analysis process is the same.

Step 1 – In the here and now
... List all strengths that exist now. Then in turn, list all weaknesses that exist now. Be realistic but avoid modesty!
Step 2 – What might be
... List all opportunities that exist in the future. Opportunities are potential future strengths. Then in turn, list all threats that exist in the future. Threats are potential future weaknesses.
Step 3 – Plan of action
... Review your SWOT matrix with a view to creating an action plan to address each of the four areas.

In summary:

Strengths need to be maintained, built upon or leveraged.
Weaknesses need to be remedied or stopped.
Opportunities need to be prioritised and optimised.
Threats need to be countered or minimised.

You can follow the following simple rules for successful SWOT analysis :

Be realistic about the strengths and weaknesses of your organization when conducting SWOT analysis.
SWOT analysis should distinguish between where your organization is today, and where it could be in the future.
SWOT should always be specific. Avoid grey areas.
Always apply SWOT in relation to your competition i.e. better than or worse than your competition.
Keep your SWOT short and simple. Avoid complexity and over analysis
SWOT is subjective.

Once key issues have been identified with your SWOT analysis, they feed into marketing objectives. SWOT can be used in conjunction with other tools for audit and analysis, such as PEST analysis and Porter's Five-Forces analysis. So SWOT is a very popular tool with marketing students because it is quick and easy to learn. During the SWOT exercise, list factors in the relevant boxes. It's that simple. Below are some FREE examples of SWOT analysis - click to go straight to them

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