What Is a SWOT Matrix?

A SWOT matrix is a popular tool used by businesses of all sizes to analyze their present market situations. SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats---the four components of a SWOT matrix.

Purpose

Completing a SWOT matrix is a key part of developing a successful marketing plan. A SWOT matrix enables business owners to see exactly where their companies are currently succeeding, where their competitors might have an edge, and how they can use current market conditions to their advantage.

Creating the Matrix

To perform a SWOT analysis on a business, create a box divided into four equal parts. Label the upper-left quadrant "Strengths"; the upper-right quadrant "Weaknesses"; the lower-left quadrant "Opportunities"; and the lower-right quadrant "Threats." Fill in the quadrants with objective information on the business.

Strengths

What does your company currently do well? What advantages does it have over the competition?

Weaknesses

Where does the company have room to improve? What is the competition doing better?

Opportunities

Are there promising markets that your business is not currently pursuing? Are you making full use of your current resources?

Threats

What current market conditions are damaging, or could potentially damage, your business? Are there certain businesses that are particularly difficult to compete against?

References

• American Marketing Association
• Marketing Profs

Resources

• Read this Article in Spanish