One of the most fundamental tools for strategic market planning is the use of tool, developed at Stanford University in the late 1960’s, is an extremely powerful ingredient in the recipe for business success. Used by most Fortune 500 companies in strategic planning, the SWOT matrix involves a frank evaluation of a business’ Strengths, Weaknesses, Opportunities and Threats:
• STRENGTHS: attributes of the organization that are HELPFUL to achieving the objective. These are the company’s core competencies, and include proprietary technology, skills, resources, market position, patents, and others. • WEAKNESSES: attributes of the organization that are HARMFUL to achieving the objective. Weaknesses are conditions within the company that can lead to poor performance, and can include obsolete equipment, no clear strategy, heavy debt burden, poor product or market image, long product development cycle, weak management, and others. • OPPORTUNITIES: external conditions that are HELPFUL to achieving the objective. Opportunities are outside conditions or circumstances that the company could turn to its advantage, and could include a specialty niche skill or technology that suddenly realizes a growth in broad market interest. • THREATS: external conditions that are HARMFUL to achieving the objective. Threats are current or future conditions in the outside environment that may harm the company, and might include population shifts, changes in purchasing, serious competitive barriers, changes in governmental or environmental regulations, and others.
SWOT analysis provides an efficient way to evaluate the range of factors that influence your operation, and can give you valuable guidance in making decisions about what to do next. It also provides a highly productive way to get your key personnel involved in the management decision-making process.
The exercise of going through the swot analysis matrix can be a great opportunity to do management team building. If you have a large team, break into 4 teams for each of the quadrants and each team can prepare and report its findings. Make sure to include not only your market planners, but also finance, operations, product development and others.