Today it is more important than other to develop a business strategy, even if you run a small informational website. A business strategy will help you to not only identify your competition and weaknesses, but it will also help to find opportunities to advance your business using your company strengths. If you are new to the field of business management then the SWOT Matrix can be a very helpful tool. The SWOT Matrix is easy to develop and even easier to use.
Setting Up Your SWOT Matrix
SWOT stands for Strengths, Weaknesses, Opportunities and Threats. Each of these letters will be assigned to a square in your matrix. Start by drawing a nine segment square. The top left square will be a label square. It will include a label that says “Internal Factors” and have an arrow that points to the right. It will also have a label that says “External Factors” and this label will have an arrow that points down. The top middle square will be labeled as “Strengths” and the top right square will be “Weaknesses.” The left middle square will be labeled as “Opportunities” and the left bottom square will be labeled as “Threats.”
The next step is to create a list of five to ten things under each SWOT label. For example, under your “Threats” label you will list external threats that are inhibiting your company’s performance, such as companies or websites that you are competing against or economic factors that are keeping people from spending money. Under your “Opportunities” label you will create a list of external opportunities that can help your company perform better such as tax incentives that are planned or holidays that will encourage people to spend money. Under your “Weakness” label you will list internal weaknesses, or things related to your company’s structure that holds it back, such as limited funding, limited experience or a small staff. Finally, create a list under your label of “Strengths” that illustrate your company’s internal strengths such as innovation and imagination.
Developing Your Strategy Blocks
The remaining blocks in your SWOT Matrix are your strategy blocks. The strategy that you develop for these blocks will relate to the heading blocks found at the top of the column and at the far left of the row. For example, in the block found under “Strengths” and to the right of “Opportunities” you will develop a strategy that will utilize your internal strengths to take advantage of your external “Opportunities.” You will follow similar tactics to fill in the other strategy blocks.