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  • Writer's pictureCanal Sonho Grande

SWOT Matrix: What is it and how to apply it in your company

Updated: Nov 28, 2022

The SWOT matrix is a framework used in the execution or review of organizations' strategic planning. It helps to assess competitiveness and the main points to be developed in a company. This framework emerged in the 60s during the development of a research project at Stanford University with the American Albert Humphrey.

matriz swot

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. These four fields can also be divided into two, the internal (Strengths and Weaknesses) and the External (Opportunities and Threats).

For the consolidation of the SWOT Matrix, a team must be assembled, preferably one that encompasses different areas of the organization and, depending on the size of the business, different hierarchical levels. In this way, it is possible to map the maximum number of ideas for each of the fields, which will guide the next steps in the planning and execution of the organization's strategy.

Internal Factors

Strengths: These are the strengths an organization has, such as customer loyalty, developed technology, strong balance sheet, brand strength and good suppliers.

Weaknesses: These are the organization's weaknesses, some examples are: low customer retention, very high amounts paid to suppliers, brand still little known, low digital presence, offering little variety of products compared to the competition.

In short, the internal factors, strengths and weaknesses, refer to results or activities with positive or negative prominence performed by the organization. The following criteria can guide the main points to be thought about:

  • Brand Presence and Reputation

  • Financial resources

  • Human Resources

  • Production capacity

  • Marketing and Sales

  • Providers

  • Active

  • Fundamental Knowledge (Ex: good management practices or use and development of new technologies)

  • Location

External Factors

Opportunities: These are external factors that indicate a clear opportunity for the organization to acquire a competitive advantage, such as: expansion into other markets, diversification of products or services and development of new technologies.

Threats: Threats from the external environment, such as: changing laws that regulate the production or execution of a certain service or even increasing taxes, competitors' products with high market growth and new consumption trends.

Therefore, external factors, opportunities and threats are possible actions or changes in behavior of:

  • Consumers

  • Regulatory bodies

  • competitors

  • Providers

  • Class entities

  • Nature (Ex: Covid)


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