Also known as the SWOT matrix, it was developed in the 1960s at Stanford University and quickly became an exercise / method used by all the major companies in the world in formulating their strategies.

Meaning: The Acronym SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.

These areas are separated between internal analysis (strengths and weaknesses) and external analysis (opportunities and threats). In addition, there is also the vision of the elements that help (strengths and opportunities) and those that hinder (threats and weaknesses). Thus, SWOT becomes a complete environmental analysis exercise that must be applied in any strategic planning process.

How to do it: The exercise of creating your SWOT matrix consists of raising as many items as possible for each area. So let's look it, point by point.

Forces:

Forces are internal elements that bring benefits to your business. Another way to think about this is to imagine the elements that are under your control, that is, you can decide whether or not to keep the situation. Some examples may be:

• The union of your team

• A certain amount of assets (real estate, modern equipment, etc.)

• Privileged location

• Strategic relationships

• Collection model

More Ex .: Quality of the product offered, good service provided to the client, financial solidity, etc.

There are practically endless forces that can be listed in a business, but it is important to focus on what really makes a difference and also what elements can be worked on. A SWOT analysis is done not only to reflect, but to create a plan of action. Let's deepen the example above.

• The union of your team = Set up an integrated compensation system

• A certain amount of assets (real estate, modern equipment, etc.) = Cheap capitalization

• Privileged location = Focus on on-site marketing strategies

• Strategic relationships = Segment projects for this audience that we have access to

• Billing model = More competitive prices or inventory savings.

Weaknesses:

Weaknesses are internal elements that hinder the business. Complementarily to the forces, are those characteristics within their control, but that do not help in the accomplishment of the mission. Some examples are:

• Highly Perishable Products

• Scarce raw material

• Low-skilled team

• Technology outdated

• Delivery process

More Ex .: High production costs, bad image, inadequate installations, poor brand, etc .

Again, the interesting thing is to seek action to eliminate these weaknesses. Of course, it is important to get out of the common place as "lack of money = make more money". That being said, let's look at the examples:

• Highly Perishable Products = Make a friendly pricing on the exchange and return to the point of sale

• Scarce raw material = Change raw material or assume a luxurious positioning

• Low-skilled team = Develop simpler products or change the process to take advantage of them, or hire newly trained qualified staff

• Technology outdated = Sell the structure to other companies

• Slow delivery process = Let the customer withdraw the product himself with mega discount

Opportunities:

Opportunities are situations outside the company that can happen and positively affect the business. These phenomena are usually out of the company's control, but there is a chance of them happening. Some examples are:

• A new law will come out

• A new course may emerge

• My competitor needs help

• Access to new technology

• Any product complementary to mine being released

More Ex .: Changes in the tastes of customers, bankruptcy of a competing company, etc .;

The opportunities are very perishable with dreams of the kind "if this happens, it will be very good." And while they are out of the company's control, there should be minimal preparation for it to occur. Let's move on with the examples:

• A new law will come out = Develop a specific product to serve it

• A new course may emerge = Plan for employees to have access to it

• My competitor needs help = We can make a merger or acquisition

• Access a new technology = Plan a new product line

• Some product complementary to mine being released = Search marketing partnership

Threats:

Finally, threats are situations outside the company that can disrupt the business. Just like the opportunities, they are out of control of the company, but it is known that there is a chance of it happening. Some examples are:

• Entry of an international competitor into the market

• Piracy of your products

• Change in the legislation of your sector

• Labour shortage

• Natural disasters / wars

More Ex .: New competitors, loss of key workers, etc.

Threats can be translated by the fears that exist on the part of the management of the company. Equally to opportunities, one must think, even if overlooked, ways of avoiding them. Come on:

• Entry of an international competitor into the market = Long term contract with suppliers

• Piracy of your products = Strategies to use the free marketing generated

• Change in the legislation of your sector = Develop a specific product to serve it

• Labour shortage = Develop a training course of your own

• Natural disasters / wars = Have alternative plans and seek new markets

Cross Swot Analysis

The cross-swot analysis consists of crossing the information from the four quadrants in order to obtain a framework that allows to outline important strategies for the future of the company.

To do this, we must first make a clear analysis of the environment, that is, deeply research the strengths and weaknesses and know how to identify the opportunities and threats. For each crossing it is important to know how to create objectives / strategies:

Strengths x Opportunities

Offensive strategy / development of competitive advantages.

Strengths x Threats

Confrontation strategy to modify the environment in favour of the company.

Weaknesses x Opportunities

Reinforcement strategy to take better advantage of opportunities.

Weaknesses x Threats

Defensive strategy with possible profound changes to protect the company.