Abstract:Medium-sized water companies have the characteristics of moderate scale, flexible management, and professional personalized services. They play a central role in the development of the water industry and face many challenges. In this context, medium-sized water enterprises need to improve the development level of enterprises through scientific strategic management. This paper proposed to use SWOT analysis method as the core tool for the strategy formulation of medium-sized water enterprises, analyzes the role of SWOT analysis method in strategy formulation, and finally introduced the strategy formulation process and performance evaluation method and index system of medium-sized water enterprises. This paper put forward solutions such as attaching importance to strategic awareness, reasonably setting up performance appraisal mechanism and strengthening lean management, so as to improve the strategic management ability of medium-sized water enterprises and promote the sustainable and healthy development of enterprises.