Thursday 13 December 2018

what is SWOT matrix

The SWOT matrix is the simplest and effective method to decide about the future. Despite its simplicity, this method is consider as the 'ABCs' of any business strategy.

The SWOT matrix is a strategic tool for most commonly use, although sometimes intuitively excellence and without knowing its technical name.


The benefit that you get with your application is to know the real situation in which the organization is locate as well as the risk and opportunities offer by the market. The purpose of the SWOT matrix is that all parties involve in the activity to identify weaknesses, threats, strengths and opportunities that may affect to a greater or lesser extent to the achievement of the DP.

This matrix in common identifies a number of ideas three times higher than which would generate the same individuals working separately. A good matrix in common, each team member stimulates the ideas of others with their own and the results are often hybrids of many contributions.

The name acquire it from its initial SWOT:

  • Weaknesses, also call weak points: are aspects that limit or reduce the capacity of effective development of the Organization's strategy, constitute a threat to the Organization and should, therefore, be control and overcome.

  • Threats: is define as all the power of the environment that can prevent the implementation of a strategy, or reduce their effectiveness, or increase the risks of it, or the resources require for its implementation, either reduce the income expect or its profitability.

  • Strengths, also call strong points: are capacities, resources, achieve positions and, as a result, competitive advantages that should and can be use to exploit opportunities.

  • Opportunities: is everything that can be a competitive advantage for the Organization, either represent a chance to improve the profitability of the same or increase their turnover.

The strengths and weaknesses belong to a domestic organization, the matrix of resources and capacities; This matrix must consider a diversity of factors relating to aspects of provision of service, marketing, financing, General of organization...

For the matrix of the strengths and weaknesses you should consider the following areas:

  • Resource matrix: capital, human resources, information systems, fix assets, non-tangible assets.

  • Matrix of activities: resources, creativity.

  • Risk matrix: with regard to the resources and activities of the organization.

  • Historical matrix: the consolidate contribution of the various activities of the organization.

You should ask yourself questions like these:

  • What are those five to seven aspects where you believe that it outperforms its main competitors?

  • What are those five to seven aspects where you believe that their competitors than it?

Assessing the strengths of your organization, keep in mind that these can be classified thus:

  • Common strengths. When a given fortress is locate on a large number of organizations competing. Competitive parity occurs when a large number of organizations competing are capable of implementing the same strategy.

  • Distinctive strengths. When a given fortress is locate only in a small number of competing organizations. Organizations who know how to exploit their distinctive strength, usually to achieve a competitive advantage and obtain economic profits above the average of its sector. Distinctive strengths may not be imitable when its acquisition or development may depend on a unique historical circumstances. That cannot be copy by other organizations or their nature and character could not be know by organizations competitors.

  • Strengths of imitation of the distinctive strengths. It is the ability to copy the distinctive strength of another organization and turn it into a strategy that generates economic utility.

Competitive advantage

The competitive advantage will be temporarily sustainable when it persists once cease all attempts of strategic imitation by the competition. Assessing the weaknesses of the Organization. It should be take into account that we are referring to those that prevent the Organization. To select and implement strategies that will enable it to carry out its mission. An organization has a competitive disadvantage when competitors are not implementing strategies. That generate value while other firms if they are doing it.

Threats and opportunities always belong to the environment external organization, Dante is overcome them or take advantage of them, ahead of them. Here comes into play the flexibility and dynamism of the organization.

Opportunities are in those areas that could generate very high yields. The threats are in those areas where the organization is difficult to achieve high levels of performance.

Take into account areas such as:

  • Matrix of environment structure of your organization (suppliers, customers, markets, competitors).

  • Interest groups. Government, public institutions, trade unions, guilds, shareholders and community.

  • The environment seen in more broadly (demographic, political and legislative aspects, etc.)

It is advisable to ask yourself questions such as:

  • What really are the biggest threats facing the environment?

  • What are the best opportunities has?

Valid actually consist of having the lowest number of threats and weaknesses and the greatest number of opportunities and strengths. The threats and weaknesses, once identify as possible, must be limit in the best way. To minimize the negative effects. If occur, or empower them, turning them into opportunities and strengths. Strengths and opportunities will have to be care for, maintain, and use.

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