What is a SWOT Matrix?
How does your product measure up in the competitive marketplace? A SWOT matrix and the resulting analysis can help you get a clear view of where you stand. First: What does SWOT stand for? It refers to S-Strengths, W- Weaknesses, O-Opportunities, and T-Threats.
SWOT is a way for you to assess the current situation of your company, a product, or even a competitor. Armed with this analysis, you will be able to formulate a strategy for moving forward.
Through the use of SWOT, you can gain a full view of what you face internally and externally, including both positives and negatives of your situation. Let’s take a closer look.
A SWOT matrix is a four by four illustration. The top row lists strengths and weaknesses of the product or organization under consideration. These listings are based on your current view. The listings under the bold headings are common areas to consider when assessing the internal view. These include things such as:
- Product Capabilities
- Company Competencies
- Market Position
- Key Resources
- Strong Processes or Quality
- Key Partnerships
Opportunities and Threats
The lower half of the SWOT Matrix is concerned with Opportunities and Threats. These concern elements external to your company. They cover trends or events that may impact your company’s situation later on.
Opportunities refer to factors that may positively affect your product or company. Threats are those forces that may negatively impact the situation. The analysis focuses on a fluid situation that can be impacted by:
- Movement in the Market
- Your partners
A Key Factor
As you are considering your SWOT matrix, remember that the upper tier (Strengths and Weaknesses) concerns your product and company in a competitive landscape. The lower tier, Opportunities and Threats, deals with trends and situations in markets outside your company.
Here’s an example:
If you may not get the parts you need to build the product, that is a weakness, not a threat. If your market is becoming more tech-saavy, that’s an opportunity.
The SWOT Matrix won’t tell your team what to do. It will prepare you to take the next step, which is to consider your options strategically. You’ll explore how to seize opportunities and reduce threats. All the while, you’ll have a clear idea of your company’s or product’s strengths and weaknesses so you can factor them into your strategic decisions.
Now that we’ve looked at the SWOT Matrix, my next post will present the TOWS Matrix, which is SWOT spelled backwards. A look at your situation from this view presents new insights that can be valuable to your team.