Due to the recent electric power system reform, power generation enterprises should seize opportunities, avoid unfavourable factors and develop suitable strategies to participate in bilateral transactions. According to bilateral transactions status and electric power system reform policies in China, a SWOT analysis system is employed to research a bilateral transacting environment for power generation enterprises, followed by strengths, weaknesses, opportunities and threats under the PEST framework, including political, economic, social and technical factors. Four different strategies of power generation enterprises are put forward according to a SWOT matrix. A quantitative analysis model based on a polar coordinates method is proposed to determine strategies under the background of the power industry reform. Strength-threat strategies should be performed by power generation enterprises. Some appropriate recommendations are put up to ensure the smooth implementations of strength-threat strategies on bilateral transactions.