SWOT matrix
SWOT crosses what happens inside (strengths and weaknesses) with what happens outside (opportunities and threats) to decide which strategies are worth pursuing. It works for a company, a maintenance department or a project.
- Reading time
- 8 minutes
- Sources
- 1 guide
In one line
SWOT is a diagnostic matrix that organizes the internal and external factors influencing the success of a company or project, and serves as a basis for defining strategies.
What it is
The INTI guide presents it as a tool for analyzing a company or a project by studying its strengths, opportunities, weaknesses and threats. It highlights how important it is to know the factors that influence whether objectives are achieved. SWOT should build on strengths and minimize or eliminate weaknesses, so that you can face the threats of the environment (macro and micro) and get better returns from potentially attractive opportunities.
- Strengths and weaknesses are internal: what the organization controls (resources, processes, capabilities).
- Opportunities and threats are external: what happens in the environment and the organization does not control.
What it is for and when to use it
By examining the situation through your own strengths and weaknesses set against the opportunities and threats of the environment, you identify four types of strategy. INTI recommends it for strategic planning, for determining the viability of new projects, and for deciding when changes are needed or when there are untapped market opportunities to take advantage of. For the analysis of the environment it suggests complementing it with PESTEL, and for the internal analysis, involving people who know each area of the company.
How to apply it
The guide proposes five steps:
- External analysis: gather enough information to recognize current and potential threats in the context and to analyze market opportunities.
- Internal analysis: identify the strengths so you can build on them and the weaknesses that limit performance.
- Distinguish and analyze the strategies: list the highest-impact factors and cross them.
- Develop the most relevant strategies for the subject being analyzed.
- Define an action plan, framed within the company's general objectives and the specific ones for which the matrix was made.
The four strategies from the crossing
| Cross | Strategy | When it applies |
|---|---|---|
| Strengths + Opportunities | Offensive | Strengths dominate in a context of favorable opportunities |
| Strengths + Threats | Defensive | Strengths prevail, but external factors pose a threat |
| Weaknesses + Opportunities | Reorientation | In a favorable external scenario, weaknesses weigh more: it makes sense to reorient the activity |
| Weaknesses + Threats | Survival | Weaknesses prevail in a threatening context |
Build your own SWOT
Strengths (Internal)
Weaknesses (Internal)
Opportunities (External)
Threats (External)
Now cross the factors and write a strategy for each box:
Illustrative example
The INTI guide does not include a worked case, so here is a made-up example to see the logic: the maintenance department of a metalworking plant.
- Strengths: technicians with many years of experience on the critical machines; a documented preventive plan.
- Weaknesses: critical spare parts with no defined minimum stock; failure data recorded in scattered spreadsheets.
- Opportunities: management wants to invest in a maintenance management system (CMMS); free training is available from a technical institute.
- Threats: spare parts suppliers with long lead times; two key technicians are about to retire.
Possible crosses: an offensive strategy (use the team's experience to design the CMMS and the indicators, such as MTBF and MTTR); a defensive one (document the knowledge of the technicians who are retiring, using standard work); a reorientation one (use the investment to get the critical spare parts stock in order); and a survival one (agree on consignment stock with suppliers while there is no reliable data).
Benefits
- It forces you to look inside and outside before deciding.
- It is simple and can be done in a single meeting, with the team.
- It documents the diagnosis and serves as a basis for an action plan.
Limitations to keep in mind
- The matrix only organizes information: the quality of the diagnosis depends on the quality of the data and on who takes part.
- A list of factors without crosses or a plan is an exercise, not a strategy: the value is in steps 3 to 5.
- The factors change: you should review the matrix periodically.
In summary
SWOT is a strategic diagnostic tool. It starts with four lists, but its value is in the crosses: each quadrant (offensive, defensive, reorientation, survival) should end in an action with an owner. You can use it before choosing an improvement methodology, to know where you are starting from.
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Lean Manufacturing: eliminating waste and producing according to value
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