analysis-227172_640In case you've been living under a rock and don't know the term, SWOT stands for “Strengths, Weaknesses, Opportunities, and Threats.” For years, the SWOT matrix has been the go-to tool for marketing and strategic analysis for businesses owners in companies of all shapes and sizes. As with any tool, however, changing times and technologies cause us to question its validity, and so it is with SWOT. Here are some of the reasons why it's still relevant in today's business environment:

Focus, Grasshopper

One of the golden strengths of SWOT is that it is superb at providing focus, both to the internal aspects of your business, and to highlight exogenous factors that you may have little control over, but that can nonetheless either be a boon to you or potentially wreck your business. It serves as a systematic way of evaluating and coming to terms with these things, both positive and negative. It forces you to confront them, revealing strengths yes, but also uncomfortable realities you may otherwise have turned a blind eye to.

Strategy Development

Business is war. Stylized, symbolic war, but war nonetheless. That's why Sun Tzu's seminal work on the topic of war is required reading in so many business colleges across the US and around the world. War requires strategy. It's not enough to show up with whatever resources are at your disposal and hurl them in the general direction of your rivals, hoping for a favorable outcome. If you want your enterprise to succeed and survive in the long term, you're going to need a carefully crafted strategy.

Any tool that helps you with that task is of value. SWOT certainly fits that bill. After evaluating your strengths, weaknesses, opportunities and threats, you can come up with at least one strategy to address each area, either to exploit a native strength or external opportunity, or to minimize an internal weakness or an external potential threat. Again, some strategy is better than no strategy, and any tool that helps you arrive at one is a net good. A net gain.

Outward Looking

In addition to assessing your strengths as a company, it also provides a mechanism for looking outward. At your customers. At your competitors. Laws governing your industry. Other external factors that you may have no control at all over. More important that merely looking at these factors though, is the fact that the data you use to describe and define them are based on actual market data and analysis. You're not guessing here. You're not supposing, but rather, using hard hitting, real world, and oftentimes real time data to help formulate your strategies and potential responses to threats.

Liiight bulb!

As a certain criminal mastermind in a popular kids' movie is fond of saying. As a tool for generating ideas and making that virtual light bulb go off in your head, there are few things better. A big part of the reasoning behind this is simply that the tool is incredibly easy to use. A tool that is easy to use is a tool people will actually reach for. Something to bear in mind when confronted with business problems that need solutions.