Evaluation of a strategic position

The SWOT analysis may be completed upon choosing strong and weak sides, opportunities and threats that fit into the diagram (the SWOT analysis is often presented in this form). However, its full usefulness will be revealed only when you already use results of the analysis to determine a strategic position of a company and choose the strategy.

This can be achieved by confrontation of strong and weak sides of the enterprise with opportunities and threats present in the surroundings. You can do it by filling the matrix presented below in. There are numerous manners to prepare such a matrix. This article presents only one of them.

As it has been already mentioned, the SWOT analysis means an approach from the outside to the inside. Therefore, the following four questions needs to be answered:

  • Do the identified strong sides allow to take the opportunities?
  • Do the identified strong sides allow to fight the threats?
  • Do the identified weak sides hinder application of opportunities?
  • Do the identified weak sides strengthen influence of the threats?

For a every affirmative answer, you need to place an “X” mark in a correct field. You may also encounter positive and negative points, but they will be not applied here not to make the general picture more complex.

You place all strong and weak sides, opportunities and threats – which were differentiated as the most important – in the table’s heading and side heading. Regarding the method that you take up, you may limit their number (e.g. to 5), but you do not need to do it. What is more, their number do not need to be equal.

Matrix of the SWOT strategic analysis – identification of dependencies

Environment
Opportunities Threats
1 … 2 … 3 … n … 1 … 2 … 3 … n …
Company Strengths 1 …
2 …
3 …
n …
Weaknesses 1 …
2 …
3 …
n …

For each strong and weak side, as well as interconnected opportunities and threats you ask the same questions, provided above. The first question for a strong side No 1 and an opportunity No 1 would sound like: “Will the identified strong side in a form of [put a strong side No 1] allow to use the opportunity in a form of [put an opportunity No 1]?” Second question: “Will the identified strong side in a form of [put a strong side No 1] allow to fight the threat in a form of [put an opportunity No 1]?” Therefore you proceed all factors one after the other.

It is the best idea to read these questions out loud, think about the answer and if it is affirmative, put “X” in the proper field in the table. If the answer is “no”, leave the field blank or put “0”.

Depending on the field, in which there is the highest concentration of “X” marks, choose such a strategy (see below table). In this moment, you are probably already aware, why you had to choose only the most significant factors (the less significant would disrupt the results).

Matrix of the SWOT strategic analysis – determination of a strategy

Opportunities Threats
Strengths
Aggressive strategy (maxi-maxi) Conservative strategy (maxi-mini)
Weaknesses
Competitive strategy (mini-maxi) Defensive strategy (mini-mini)