How to write swat analysis. SWOT Analysis as an Effective Business Assessment Tool. We analyze strengths and weaknesses

SWOT is an acronym for Strengts, Weaknesses, Opportunities, and Threats. The internal situation of the company is reflected mainly in S and W, and the external one - in O and T. SWOT analysis is a development stage

The SWOT analysis methodology involves, firstly, identifying the internal strengths and weaknesses of the firm, as well as external opportunities and threats, and, secondly, establishing links between them.

A SWOT analysis helps answer the following questions:

Is the company leveraging internal strengths or distinctive advantages in its strategy? If a company does not have a distinctive advantage, what potential strengths could it be?
- Are the weaknesses of the company its vulnerabilities in competition and / or do they prevent the opportunity to take advantage of certain favorable circumstances? What weaknesses require strategic adjustments?
- What opportunities give the company a real chance of success using its skills and access to resources? (Opportunities without ways of realizing them - an illusion, the strengths and weaknesses of the firm make it better or worse adapted to the use of opportunities than other firms).
- what threats should a manager be most concerned about and what strategic actions should he take to defend well?

The table provides examples of the main factors that should be considered in a SWOT analysis.

Potential Internal Strengths(S):	Potential internal weaknesses(W):
Clearly displayed competence	Loss of some aspects of competence
Adequate financial sources	Inaccessibility of the finance required to change the strategy
The high art of competition	Market art below average
Good consumer understanding	Lack of analysis of consumer information
Recognized market leader	Weak market participant
A well-defined strategy	Lack of a clearly defined strategy, inconsistency in its implementation
Leveraging economies of scale, cost advantage	High cost of production in comparison with key competitors
Own unique technology, the best production capacity	Obsolete technology and equipment
Proven reliable management	Loss of depth and flexibility of control
Reliable distribution network	Weak distribution network
High art R&D	Weak positions in R&D
The most effective advertising in the industry	Weak promotion policy
Potential External Opportunities(O):	Potential external threats (T):
Possibility of servicing additional groups of consumers	Weakening market growth, unfavorable demographic changes entering new market segments
Expanding the range of possible products	Increased sales of replacement products, changing tastes and needs of customers
Competitor complacency	Fierce competition
Reducing trade barriers to entering foreign markets	The emergence of foreign competitors with low-cost goods
Favorable shift in exchange rates	Unfavorable shift in exchange rates
Greater resource availability	Strengthening supplier requirements
Relaxation of restrictive legislation	Legislative price regulation
Easing business volatility	Sensitivity to instability of the external business environment

Classical SWOT analysis involves identifying the strengths and weaknesses in the company's activities, potential external threats and opportunities and their assessment in points relative to the industry average or in relation to the data of strategically important competitors. The classic presentation of information for such an analysis was the compilation of tables of strengths in the firm's activities (S), its weaknesses (W), potential opportunities (O) and external threats (T).

The resulting SWOT matrix looks something like this:

At the intersection of SW with OT, a expert review their mutual influence in points. The total score for rows and columns shows the priority given to one factor or another when forming a strategy.

Based on the results of the SWOT analysis, a matrix of strategic measures is compiled:

SO- the activities that need to be carried out in order to use the strengths to increase the company's capabilities;
WO- activities that need to be carried out, overcoming weaknesses and using the presented opportunities;
ST- activities that use the strengths of the organization to avoid threats;
WT- activities that minimize weaknesses to avoid threats.

SWOT Analysis Rules

In order to avoid possible mistakes in practice and get the most out of the SWOT analysis, several rules must be followed.

As much as possible, specify the scope of the SWOT analysis as much as possible. When conducting a business-wide analysis, the results are likely to be too general and useless for practical application. Focusing the SWOT analysis on the position of the company in the context of a specific market / segment will yield results that are much more useful for practical application.
Be correct when attributing a factor to strengths / weaknesses or opportunities / threats. Strengths and weaknesses are the internal traits of the company. Opportunities and threats describe the market situation and are not directly influenced by management.
SWOT analysis should show the real position and prospects of the company in the market, and not their internal perception, therefore, strengths and weaknesses can be considered as such only if they (or their result) are perceived in this way by external buyers and partners. They must correspond to the objectively existing differences between the company's products and competitors. Strengths and weaknesses should be ranked according to their importance (weight) for buyers and only the most important should be included in the SWOT analysis.
The quality of a SWOT analysis directly depends on objectivity and the use of versatile information. You cannot entrust it to one person, because the information will be distorted by his subjective perception. When conducting a SWOT analysis, the points of view of all functional divisions of the company should be taken into account. In addition, all identified factors must necessarily be confirmed by objective facts and research results.
Long and ambiguous language should be avoided. The more specific the wording, the clearer the influence of this factor on the company's business now and in the future, the more practical value the results of the SWOT analysis will have.

Limitations of SWOT Analysis

SWOT analysis is only a tool for structuring the available information; it does not provide clear and clearly formulated recommendations, specific answers. It only helps to visualize the main factors, as well as to evaluate as a first approximation expected value certain events. It is the analyst's job to formulate recommendations based on this information.

The simplicity of a SWOT analysis is deceiving; its results are highly dependent on the completeness and quality of the original information. To conduct a SWOT analysis, either experts with a very deep understanding of the current state and trends of market development are required, or a very large amount of work on the collection and analysis of primary information to achieve this understanding. Errors made during the formation of the table (inclusion of unnecessary factors or the loss of important ones, incorrect assessment weight coefficients and mutual influence), cannot be identified in the process of further analysis (except for quite explicit ones) - they will lead to wrong conclusions and erroneous strategic decisions. In addition, the interpretation of the resulting model, and, consequently, the quality of conclusions and recommendations is highly dependent on the qualifications of the experts conducting the SWOT analysis.

History of SWOT Analysis

A pioneer of directions strategic analysis, aimed at finding a balance between the resources and capabilities of the firm with the factors and conditions of the external environment, is considered Kenneth Andrews (. He developed a model that became the prototype of SWOT analysis. This model is based on four questions:

What can we do (strengths and weaknesses)?
What would we like to do (corporate and personal values)?
What could we do (opportunities and threats of external environmental conditions)?
What do others expect of us (intermediaries' expectations)?

The answers to these four questions served as the starting point for the formation of the strategy.

SWOT analysis in its modern form is due to the work of a group of scientists at Stanford Research Institute(Stanford Research Institute - SRI): Robert Stewart, Marion Dosher, Dr Otis Benepe, Birger Lie, Albert Humphrey. Exploring the organization strategic planning at Fortune 500 companies (the study was conducted from 1960 to 1969), they eventually came up with a system they called SOFT: Satisfactory, Opportunity, Fault, Threat. Later the model was modified and renamed the above SWOT.

Product (what are we selling?)
Processes (how do we sell?)
Buyers (to whom are we selling?)
Distribution (how does it reach customers?)
Finance (what are the prices, costs and investments?)
Administration (how do we manage all of this?)

Based on the factors identified during the analysis, strategic decisions were made further.

SWOT analysis is an intermediate link between the formulation of the mission of the enterprise and the definition of its goals and objectives. Everything happens

in the following sequence (see Figure 1):

1. You have determined the main direction of the enterprise development (its mission)

2. Then you weigh the strength of the enterprise and assess the market situation in order to understand whether it will be able to move in the indicated direction and how it is better to do it (SWOT analysis);

3. After that, you set goals for your company, taking into account its real possibilities.

SWOT analysis helps to answer the following questions: - Are the weaknesses of the company its vulnerabilities in competition and / or they do not provide an opportunity to take advantage of certain favorable circumstances? What weaknesses require strategic adjustments?

What opportunities do the company have a real chance of success in leveraging its skills and access to resources?

What threats should a manager be most concerned about, and what strategic actions should he take to defend well?

So, after conducting a SWOT analysis, you will more clearly understand the advantages and disadvantages of your company, as well as the market situation. This will allow you to choose the best path of development, avoid dangers and make the most of the resources at your disposal, while taking advantage of the opportunities provided by the market.

Even if you are sure that you are already perfectly aware of everything, it is still better to conduct a SWOT analysis, since in this case it will help structure the existing information about the company and the market and take a fresh look at the current situation and the prospects that open up.

In addition, the results of the analysis and decisions made on its basis should be recorded and accumulated, since the accumulated structured experience ("knowledge base") is the basis of the management value of any company.

Strategic decisions made correctly and on time play a key role in the success of an organization today. Ultimately, it is they who have a decisive influence on the competitiveness of products and the enterprise as a whole.

Methodology for conducting a SWOT analysis

In general, the SWOT analysis is reduced to filling out the matrix depicted

in Figure 2, the so-called "SWOT analysis matrix". In the appropriate cells of the matrix, it is necessary to enter the strengths and weaknesses of the enterprise, as well as market opportunities and threats.

Strengths enterprise - what it has succeeded in or some feature that provides additional features... Strength may lie in the experience, access to unique resources, the availability of advanced technology and modern equipment, high qualifications of personnel, high quality of products, fame brand etc.

Weaknesses an enterprise is the absence of something important for the functioning of the enterprise or something that the enterprise has not yet succeeded in comparing with other companies and puts it in a disadvantageous position. As an example of weaknesses, one can cite too narrow a range of manufactured goods, a bad reputation of the company in the market, lack of funding, low level of service, etc.

Market opportunities are favorable circumstances that an enterprise can use to gain an advantage. As an example of market opportunities, one can cite the deterioration of competitors' positions, a sharp increase in demand, the emergence of new production technologies, an increase in the level of income of the population, etc. It should be noted that opportunities from the point of view of SWOT analysis are not all opportunities that exist on the market, but only those that can be used by the company.

Market threats- events, the occurrence of which may have an adverse effect on the enterprise. Examples of market threats: new competitors entering the market, tax increases, changing consumer tastes, declining birth rates, etc.

It should be noted that the same factor for different enterprises can be both a threat and an opportunity. For example, for a store that sells expensive products, increasing incomes of the population may be an opportunity, as it will lead to an increase in the number of customers. At the same time, for a discounter store, the same factor can become a threat, since its customers with higher salaries can move to competitors offering a higher level of service.

The SWOT analysis should be carried out with the participation of all key members of the organization. This concerns the general identification of strengths and weaknesses, which must be clearly visible within the organization. However, this analysis should be as broad as possible. The most difficult thing is to identify the weaknesses of the organization, which can manifest themselves later, in the attacks of competing organizations. Members of the organization themselves are very reluctant to talk about them.

SWOT analysis can be performed using the technique " brainstorming"However, if the task is to assess the leadership of the organization, this technique will be ineffective, since members of the organization may be afraid to express their real views in the presence of others. It follows that it is necessary to use other techniques to ensure the anonymity of specific authors of the analysis. For this purpose, it is possible, first of all, to collect the analysis performed by each member of the organization, and then to submit the results of general verification and discussion.Each of the points in all four directions of the analysis can be assessed by ordinary members of the organization according to the scheme: "yes", "no", should be corrected (how? ).

The quality of the analysis can be improved by involving people outside the organization. True, they can only perform auxiliary functions, since they do not know the organization enough to independently distinguish between its strengths and weaknesses. However, due to the fact that they are not involved in the internal “layouts” of the organization, such persons can act as impartial arbiters who are able to evaluate proposals, as well as, raising special questions, provoke the organization to more thoroughly rethink its provisions and actions. Of course, these persons should enjoy the indisputable confidence of the members of the organization, because during the analysis, facts may come to light, the disclosure of which can be very dangerous.

When conducting a SWOT analysis, and in particular an analysis of chances and threats, previous research should be used. public opinion... The connection of the organization with a certain problem, issue, ascribing to it competence in any area, may be a good chance for it. However, from the point of view of the organization, assessing certain actions as highly unpopular can be a significant threat. Opinion research can also confirm the analysis's findings regarding strengths and weaknesses. Even if the organization has a strong leader, but this personality is very unpopular in society, it is difficult to attribute its presence to the strengths of the organization. It may turn out that such a leader leads the organization very well (and in this sense this is a strong point), but it is his low popularity that is a threat to the organization.

Step 1. Determining the strengths and weaknesses of the enterprise

The first step in a SWOT analysis is to assess your own strengths. The first stage allows you to determine what are the strengths and weaknesses of the enterprise.

In order to identify the strengths and weaknesses of the enterprise, you need to:

1. Make a list of parameters by which the company will be assessed;

2. For each parameter, determine what is the company's strength and what is its weakness;

3. From the entire list, select the most important strengths and weaknesses of the enterprise and enter them into the SWOT analysis matrix (Figure 2).

Let us illustrate this technique with an example.

To evaluate the enterprise, you can use the following list of parameters:

1. Organization (here the level of qualifications of employees, their interest in the development of the enterprise, the presence of interaction between departments of the enterprise, etc. can be assessed)

2. Production (production capacity, the quality and degree of wear of equipment, the quality of the manufactured goods, the availability of patents and licenses (if necessary), the cost of production, the reliability of the supply channels for raw materials and materials, etc. can be assessed)

3. Finance (production costs, availability of capital, rate of capital turnover can be estimated, financial stability your business, the profitability of your business, etc.)

4. Innovation (here the frequency of the introduction of new products and services at the enterprise, the degree of their novelty (minor or radical changes), the payback period of funds invested in the development of new products, etc.)

5. Marketing (here you can assess the quality of goods / services (how consumers assess this quality), brand awareness, completeness of the range, price level, advertising efficiency, enterprise reputation, the effectiveness of the sales model used, the range of products offered additional services, qualification of service personnel).

Next, you should fill in Table 1. This is done as follows: the assessment parameter is written in the first column, and the strengths and weaknesses of the enterprise that exist in this area are recorded in the second and third columns. Table 1 provides a few examples of strengths and weaknesses by Organization and Production.

Table 1. Identifying the strengths and weaknesses of your enterprise

After that, from the entire list of strengths and weaknesses of the enterprise, it is necessary to select the most important (the strongest and weakest sides) and write them down in the corresponding cells of the SWOT analysis matrix (Figure 2). It is optimal if you can limit yourself to 5-10 strengths and the same number of weaknesses, so as not to experience difficulties in further analysis.

Strengths are especially important for the strategic perspective of the company, since they are the cornerstones of strategy and should be based on the achievement of competitive advantages. At the same time, a good strategy requires intervention in weaknesses. Organizational strategy must be well adapted to what needs to be done. Of particular importance is the identification of the distinctive advantages of the company. This is important for the formation of the strategy, because:

Unique opportunities give the firm a chance to take advantage of favorable market conditions,

Create a competitive advantage in the market,

Potentially can be the cornerstones of a strategy.

Step 2. Identify market opportunities and threats

The second step of the SWOT analysis is a kind of "local exploration" - market assessment. This stage allows you to assess the situation outside your enterprise and understand what opportunities you have, as well as what threats you should be aware of (and, accordingly, prepare for them in advance).

The methodology for determining market opportunities and threats is almost identical to the methodology for determining the strengths and weaknesses of an enterprise:

1. A list of parameters is drawn up by which the market situation will be assessed;

2. For each parameter, it is determined what is an opportunity and what is a threat to the enterprise;

3. The most important opportunities and threats are selected from the entire list and entered into the SWOT analysis matrix.

Let's look at an example.

The following list of parameters can be taken as a basis for assessing market opportunities and threats:

1. Demand factors (here it is advisable to take into account the market capacity, the rate of its growth or decline, the structure of demand for the company's products, etc.)

2. Factors of competition(one should take into account the number of main competitors, the availability of substitute products on the market, the height of the barriers to entry and exit from the market, the distribution of market shares among the main market participants, etc.)

3. Sales factors (it is necessary to pay attention to the number of intermediaries, the presence of distribution networks, the conditions for the supply of materials and components, etc.)

4. Economic factors (taking into account the exchange rate of the ruble (dollar, euro), inflation rate, change in the level of income of the population, tax policy of the state, etc.)

5. Political and legal factors(the level of political stability in the country, the level of legal literacy of the population, the level of law-abidingness, the level of corruption in the government, etc.)

6. Scientific and technical factors(usually the level of development of science, the degree of implementation of innovations (new goods, technologies) in industrial production, the level of state support for the development of science, etc.)

7. Socio-demographic factors(one should take into account the size and age and sex structure of the population of the region in which the enterprise operates, the birth and death rates, the level of employment, etc.)

8. Socio-cultural factors(usually the traditions and system of values of society, the existing culture of consumption of goods and services, existing stereotypes of people's behavior, etc. are taken into account)

9. Natural and environmental factors(taken into account the climatic zone in which the enterprise operates, the state of the environment, public attitude to environmental protection, etc.)

10. And, finally, international factors (among them the level of stability in the world, the presence of local conflicts, etc.)

Further, as in the first case, the table is filled in (table 2): the assessment parameter is written in the first column, and the existing opportunities and threats associated with this parameter are recorded in the second and third columns. The table provides examples to help you understand how to list the opportunities and threats for your enterprise.

Table 2. Definition of Market Opportunities and Threats

After filling in Table 2, as in the first case, it is necessary to select the most important from the entire list of opportunities and threats. To do this, each opportunity (or threat) needs to be assessed according to two parameters, asking two questions: "How likely is it that this will happen?" and “How much will this affect the business?” Selected are those events that are likely to occur and have a significant impact on the business. These 5-10 opportunities and about the same number of threats are entered into the corresponding cells of the SWOT analysis matrix (Figure 2).

Step 3. Comparison of the strengths and weaknesses of the enterprise with the opportunities and threats of the market

Comparing strengths and weaknesses with market opportunities and threats allows you to answer the following questions regarding the future development of your business:

1. How can you take advantage of emerging opportunities using the strengths of the enterprise?

2. What weaknesses of the enterprise can prevent this from happening?

3. What strengths can be used to neutralize existing threats?

4. What threats, compounded by enterprise weaknesses, should be most feared?

To compare the capabilities of an enterprise to market conditions, a SWOT matrix is used, which has next view(fig. 3). On the left, there are two sections (strengths and weaknesses), in which, respectively, all the strengths and weaknesses of the organization identified at the first stage of the analysis are introduced. At the top of the matrix, there are also two sections (opportunities and threats), in which all identified opportunities and threats are entered.

At the intersection of the sections, four fields are formed: "SIV" (strength and capabilities); "SIU" (strength and threats); "SLV" (weakness and opportunity); "SLU" (weakness and threats). In each of these fields, the researcher should consider all possible pair combinations and highlight those that should be taken into account when developing a strategy for the organization's behavior. For those couples that were selected from the "SIV" field, a strategy should be developed to use the strengths of the organization in order to benefit from the opportunities that have emerged in the external environment. For those couples who find themselves on the "SLV" field, the strategy should be built in such a way as to try to overcome the weaknesses in the organization due to the emerging opportunities. If the pair is on the "SIA" field, then the strategy should involve the use of the strength of the organization to eliminate threats. Finally, for couples on the SLU field, the organization must develop a strategy that will allow it to both get rid of weaknesses and try to prevent the threat looming over it.

For the successful application of the SWOT methodology, it is important to be able not only to uncover threats and opportunities, but also to try to assess them in terms of how important it is for an organization to take into account each of the identified threats and opportunities in its strategy of behavior.

To assess the opportunities, the method of positioning each specific opportunity on the opportunity matrix is used (Fig. 4).

This matrix is built as follows: from above is the degree of influence of the opportunity on the activities of the organization (strong, moderate, small); on the side is the likelihood that the organization will be able to take advantage of the opportunity (high, medium and low). The ten opportunity fields obtained within the matrix have different meanings for the organization. The opportunities that fall on the "BC", "VU" and "SS" fields are of great importance to the organization, and they must be used. The opportunities that fall on the fields "CM", "OU" and "NM" practically do not deserve attention. With regard to the opportunities that have fallen into the remaining fields, management should make a positive decision about their use, if the organization has sufficient resources.

Rice. 3. SWOT Matrix

Example:

SWOT analysis Microsoft.

I. Creation of new software

II. Price drop

III. Entering other markets

I. Antimonopoly Policy

II. Competition

III. Decline in demand

1. Reputation in the market

2. Large market share

3. Nice staff

4. Secret technologies

I.- 3,4

II.- 2,4

III.- 1,4,5

I.- 2

II.-3,4

III.-4,5

1. Unfinished products

2. Low salary

3. Monopoly

I.- 1

II.- 1,3

III.- 2

I.- 3

II.- 1,2

III.- 1

A similar matrix is compiled for threat assessments (fig. 5). The threats that fall on the "VR", "VK" and "SR" fields pose a very great danger to the organization and require immediate and mandatory elimination. Threats that hit the "VT", "SK" and "NR" fields should also be in sight top management and be eliminated as a matter of priority. As for the threats on the fields of "NK", "ST" and "VL", then an attentive and responsible approach to their elimination is required.

Rice. 4. Opportunity matrix

Rice. 5. Threat matrix

Threats that have fallen on the remaining fields should also not fall out of sight of the organization's leadership, and careful monitoring of their development should also be carried out, although the task of their primary elimination is not set.

As for the specific content of the considered matrices, it is recommended to identify opportunities and threats in three directions: market, product and activities for the sale of products in target markets (pricing, distribution and promotion of products). The source of the emergence of opportunities and threats can be consumers, competitors, changes in the factors of the macro-external environment, for example, the legal framework, customs policy. It is advisable to carry out this analysis answering the following questions in relation to opportunities and threats on three fronts:

1. The nature of the opportunity (threat) and the reason for its occurrence.

2. How long will it last?

3. What power does it have?

4. How valuable (dangerous) is it?

5. What is the degree of its influence?

To analyze the environment, the method of compiling its profile can also be applied. This method is convenient for compiling a profile of the macroenvironment, immediate surroundings, and internal environment... With the help of the method of compiling the profile of the environment, it is possible to assess the relative importance for the organization of individual environmental factors.

The monumental theory in marketing and planning, SWOT analysis, remains quite incomprehensible for those who study the subject, and for many people not related to advertising, finance and analytics, this thing is generally unknown. And in vain.

Today in the blog Econ Dude I will continue to cover basic economic terms, theories, objects and phenomena, let's talk about SWOT analysis. My article will, as always, be somewhat subjective, I write in my own words and give examples. In a more general and scientific form, you can read about SWOT analysis.

What is written there is all correct and correct, but boring. They will tell you about this in marketing at the university, but you most likely will not understand anything because many teachers themselves do not understand what they are teaching. And I will try to help you understand this theory and give examples to make the learning process interesting.

If you don't need it for study, so much the better.

In any case, it will come in handy in life, for the general development of the brain.

SWOT analysis is a very monumental thing, it can be applied not only to the analysis of commercial, private or state companies, it can be applied to almost any organization and even to entire industries.

It works in politics, economics and social life.

Another theory in economics?

Many do not consider economics a full-fledged science and I, with an economic education, partly agree. If the subject is not science, then they will suck things out of their fingers, invent theories, pour water and look for the alleged dependence of one on the other. This is done, for example, in a topic that is not a science.

But the education sector is also an industry, which means jobs are needed, and coaches and teachers have to teach something, which means all sorts of theories and concepts need to be invented. SWOT is such a thing partly and is, like, for example, the theory about the life cycle of a product. But in general, these are beautiful theories that are useful to study to warm up the brain. Moreover, even if some thing is unscientific, but if, for example, this SWOT analysis is used by directors of Google, Gazprom or, for example, Tinkoff Bank, then in fact the theory becomes already practical, practical application makes it practical.

Learn the given thing in marketing, analytics and business planning.

It is from these four angles that an existing project is considered, or a new and theoretical one, for example a new one.

Read my article on this link, if you have time, there I’m just telling you how one small business company operates, and a lot of this is just the logic of SWOT analysis, I just don’t mention it directly there.

Visually and graphically, it's pretty easy to imagine everything:

What's incomprehensible? Picture (matrix) I have already told everything.

Everything is beautifully divided into segments, while there is two global segments different colors, external factors (Wednesday Thursday) and internal.

I understand that it is useless to show beautiful or ugly pictures with graphs in an attempt to explain something, this is a big mistake of many teachers in schools and universities. You need to teach only with the help of case studies and real examples.

Later in the article they will be, but you need to understand that capitalism is young in the countries of the former CIS, therefore there are few cases in Russian, and indeed SWOT analysis is, in part, a corporate secret, however, below I translate some things from English.

How is the SWOT analysis done? Example

Example, analysis of a small restaurant ( from eng. articles ):

Excellent location with lots of traffic (power);
Good reputation with local residents ( power);
Higher price than competitors and large companies ( weakness);
Low marketing budget ( weakness);
Opportunity implementation of food delivery through the application;
Threat increase in supplier prices.

If you studied economics, then you know that there are 5-10 very typical and classic points for any business for each element. That is, this is already a classic, either a good business location, or a bad one - either it is strong or weak. In many cases, you don't even need to invent these points, you just need to analyze the situation of your company using ready-made questions:

Location and rental?
Staff and payroll costs?
Pricing policy in relation to competitors?
Marketing budget?
Tax regulation?
General economy of a region, city or country (changes)?
Reputation, brand awareness and customer base?
Staff, wage costs and labor costs?

And further down the list. You answer questions like these and choose whether it is strength, weakness, opportunity, or threat. Here you can very much even twist everything in your head and expose one thing, for example, by force and by opportunity. Sometimes it happens that a feature can be described as weakness, or as strength, depending on which angle you come from. There is room for creativity and some imagination.

You will not be able to open a successful low-price restaurant selling burgers next to MacDonald's, the presence of a McFuck across the street from you is an external factor, you can hardly influence it.

Therefore, you need to dance in your strategy from other things, for example, opening a premium segment restaurant nearby, or, say, offering something that is not offered there: calmness, absence of crowds, hookah, etc. Or .

The ability to highlight external and internal factors in your head is the most important skill in life, it greatly helps to change even your personal life for the better and, for example, not blame yourself for what you are not responsible for. Moreover, if this is an internal factor and already your essence, then you need to change yourself.

So, maybe such personal examples are clearer to you.

Another example, Coca-Cola's SWOT analysis

Here's a simple example of analyzing a large company:

Any grandmotherevenin any African country knows.

What does it do? People always choose a more recognizable brand for an equal price. That is, if in any market in the world there is Cola on the shelf in a store, it will be very difficult to enter this market with your new drink in the same price category.

How to get out? Putting pressure on health, as an example.

What are the weaknesses of Coca-Cola?

This is already a difficult question, you won't guess right away, you need to think about it.

The weak side is the margin. It is low and it is sewn into their business.

Drinks are part of the food market and even part of Agriculture as competitors are water, milk, and juices. The niche has low markups, well, relatively low, for example.

Although they can be understood due to the recycling cycle and the brand, about that here:

So, Kolya, in order to receive large gross proceeds, it is necessary to sell naturally millions of cans and bottles of this poison. This means that a huge logistics network is needed, which means that the purchases of aluminum and plastic are huge. Dependence on purchase prices for raw materials is always and in almost any business a potential weakness.

Why is this analysis needed and how can it be applied?

See what SWOT analysis does, he just makes you think, analyze and put the company on the shelves... Some conclusions naturally follow from this, many of which are very practical and applicable.

What is the other weakness of Cola?

Competitor - Pepsi. What to do about it? Nothing really. The situation is practically the best for the oligopoly, because the state will crush the monopoly, and with free competition there is no need to expect normal revenue.

The goal in terms of business is to increase profits, this is generally the goal of any commercial enterprise. There may be smaller tactical targets as well.

Let's take some other example altogether, from a different area.

SWOT analysis in politics

Let's say the Donald Trump project, this is also a kind of project, already political, to which this analysis can also be applied.

Strong point? Independence in the eyes of many from the US political elite and from institutions. But as you know, our strengths are extensions of our weaknesses. Weakness follows from any strength, and vice versa.

He has no support from the US elite, no support from the media, all the Colbers and other Johns Olivers from the Democrats hound him every day.

Therefore, promising something, pushing the project through is difficult. People supported, approx. But the power is not with these people, but with the institutions.

His position now is such that he is a hostage to his strengths and weaknesses. Does he communicate with people directly using Twitter? This is a plus, but also a minus, weakness. The media that are against him will suck on any Tweet and dig into it. And if you write everything yourself without a press secretary, then of course you will blurt out something like that ...

And what are the opportunities and threats in his position? The threats are obvious. Impeachment, loss of confidence in his nuclear electorate.

Much depends on the goals here, and Trump's long-term goals are not entirely clear, he plays more like Russia, somehow depending on the situation.

But if we assume that his goal is, for example, a second term, then proceeding from this, one can already think how to take advantage of opportunities and avoid threats.

Any puncture of the Democrats is an opportunity to score points. Any puncture of yours is a threat of an attack from enemies. Each specific situation is analyzed very quickly and conclusions are drawn. Generally, SWOT analysis is a method of thinking in general, it is done by many without even realizing it, on automatism. It is logical, just not all people know how to distinguish internal and external factors, and confusing them is a big mistake.

The acronym SWOT was first introduced in 1963 at Harvard Business Policy Conference by Professor Kenneth Andrews.

In 1965, four professors at Harvard University - Leraned, Christensen, Andrews, and Guth - proposed the technology of using the SWOT model to develop a strategy for the behavior of a firm. The LCAG scheme has been proposed (by the initial letters of the authors' surnames), which is based on a sequence of steps leading to the choice of a strategy.

As you can see, the term is no longer new, this concept is quite old, therefore, during its existence and application, some practice has already accumulated.

What to turn a feature into? (To feature)

You can do this analysis for almost anything, even for example for this blog of mine, Econ Dude. What is the peculiarity of the blog? I write on many topics at once (topics in the header): economics, psychology, reviews, games, design, etc.

This is exactly peculiarity rather than weakness or strength. Feature. Such blogs are called author's. And from this feature, the pros and cons already follow.

That is, if we found a feature (diversification of markets, for example), then you should not immediately and headlong try to write it down as strength or weakness, you need to draw conclusions from this and now refer the conclusions to the category. Example?

Suppose if I write on different topics, when the market changes and, for example, when traffic is lost on one topic, I can safely close it, continuing to write further on other topics. That is, we write this by virtue of formulating something like this:

"Reducing the risks of market fluctuations due to diversification"

A into weakness we write like this:

"Decrease in the rate of project growth due to diversification"

This is how one thesis and one feature turns into both strength and weakness.

We gain a deeper understanding of the project

Here you can ask, well, what's the point? Ok, you took it all apart and classified, what are the practical conclusions from this? After that, will you write on the blog on one topic, or what will you do? Why take it all apart with this analysis?

Friends, it's just a matter of deep understanding of the essence of the project and that's it.

If you have understanding, then you can avoid many mistakes.

These are practical conclusions and this is just one small example.

Often in life we start some kind of business and some kind of project, while we just do it, maybe we have a desire and motivation, or maybe we don't and we just want to earn money, everything is commendable. But you will be amazed how many people waste their strength in emptiness, doing things that they would never do if they understood their weaknesses, their strengths, saw the opportunities and threats in their situation.

Damn, such an analysis can even save a relationship if you are just evaluating the project "and the family with Masha" at least in your head, mark her strange quirks and write it down in your head as a threat.

And there will be a threat, can you ask Masha's friend, Dasha, and Masha is generally normal? And your friend will tell you that you are crazy if you decide to marry her. This is how it works, simple things that can make a big difference in the future.

These principles, that if there is something good, then there should be bad - these are almost philosophical principles, as well as the principles of assessing objectivity, for example, in Wikipedia. These are also the principles of quality journalism and science.

SWOT analysis makes you look at the world more adequately and realistically.

There is always a threat, everything cannot be good. There is always a possibility, not all is lost. You have strengths, you underestimate yourself. You (or for a business, project) there are also weaknesses, do not be a naive blind and do not be arrogant.

Along with SWOT analysis, works are often studied and applied. Porter, For example analysis of five forces... Several similar techniques together give much more interesting results and you should not limit yourself to SWOT alone.

Porter's methodologies are applied to the analysis of competition and external factors they end up giving a good understanding of the market and the industry.

That's all, my other articles on economic topics can be found here.

In this article, you will learn:

What types of SWOT analysis method exist

When should you not use the SWOT analysis method?

The SWOT analysis technique has become very popular due to its simplicity and wide applicability. With its help, you can assess the likely consequences. rational decisions in almost any area: both in business when developing a company's development strategy, choosing a marketing policy, etc., and in private life. The SWOT analysis method assumes that the situation has been studied and understood before making a decision. Let's take a closer look at it.

What is the essence of the SWOT analysis method

SWOT analysis Is a way to assess the current situation in business and the prospects for its development, identifying four key aspects: Strengths - strengths, Weaknesses - weaknesses, Opportunities - opportunities and Threats - threats.

Two of them - strengths and weaknesses - characterize the state of the company's internal environment at the time of analysis. The remaining aspects - threats and opportunities - relate to the external environment in which the business operates and which the entrepreneur or head of the firm cannot directly influence.
The method of conducting a SWOT analysis allows you to describe the situation clearly and in a structured manner, to draw a conclusion about whether the company is developing in the right direction, what risks should be protected from and how exactly this is to be done, what is the potential of the enterprise.

The SWOT analysis method is based on four main questions:

What can a businessman (organization) do?
What would he like to do?
What is generally possible in the current environment?
What actions are expected from the company by its environment - clientele, partners, counterparties?

By answering these questions, you can determine:

the advantages of the company, its trump cards that can be used in the development strategy;
vulnerabilities that can be eliminated, compensated;
perspectives, open paths company development;
dangers and ways to protect yourself from them.

Why do you need a SWOT analysis method

SWOT analysis is a simple and versatile method widely used in entrepreneurial activity and not only. In business, when planning and developing a strategy, it can be used both separately and in conjunction with other marketing tools, which makes it very convenient for managers of firms and private entrepreneurs.

Outside of business, the SWOT analysis method allows you to identify priority areas for applying efforts (this applies to both professional and personal development), find your true life goals and priorities in labor activity and relationships.
For business, SWOT analysis is used to:

collecting, summarizing and analyzing information about competitors through Porter models, PEST and other marketing methods;
creation step by step plan the implementation of the business strategy in life, the development of its main directions and the appointment of persons responsible for the implementation;
competitive intelligence (search for the strengths and weaknesses of competitors) to form an effective development strategy.

Thus, wherever necessary, highlight the strengths and weaknesses of something ( commercial activities, enterprises, individuals), there is a place for the SWOT analysis method. Its product can be either a business strategy or a professional or personal growth program.

Types of SWOT analysis method

Express version of the SWOT analysis. It is found most often and is used to detect the main advantages of a company and its vulnerabilities. External threats and opportunities are also being identified. This type of method is the easiest to use and gives a clear result.
Summary SWOT analysis. It focuses on accounting and systematization of the main indicators of business performance at the current moment and its prospects in the future. The summary SWOT analysis is good because it allows you to quantify the factors that are identified by other methods included in the strategic analysis toolkit, to form a strategy and an action plan aimed at achieving the main goals of the company.
A blended SWOT analysis is an option that combines the first two. There are at least three varieties of it, in which the influencing factors are structured in the form of tables and form a cross matrix. However, analysis of these types does not give quantify certain indicators. Thanks to the summary SWOT, you can deeply examine the data obtained and come to an accurate result.

SWOT analysis method by example

The main SWOT analysis matrix is as follows:

Consider this situation: individual entrepreneur is going to sell pies to grandmothers in small batches (and they, in turn, will resell them to the final customer).
Here's how you can apply the SWOT analysis method to it:

Note that if the target audience is, for example, schoolchildren who buy pies for themselves (and not grandmothers-traders), then the SWOT analysis must be repeated, since the initial data has changed.

Analysis of the project using the SWOT method

First of all, decide on what goals you are going to achieve through the method, what tasks are in front of you. If the project is devoid of goals and is not specific, the SWOT analysis will fail: the initial data will simply not be obtained from anywhere.
Find potential strengths in your future (or existing) business. Make a complete list of them and start analyzing each of them. What characteristics and features make your idea realistic and promising? Are the means and tools with which you intend to implement your strategy effective, and by what means? How much good entrepreneur(or the leader) are you yourself? What resources and assets are available to you? What do you do better than your competitors? In general, conduct an audit and assessment of your capabilities.

Then, using the same method, you need to analyze the shortcomings of the business project in question. What factors hinder the solution of urgent problems? What business skills do you personally lack and how can you “pump” them? What is the main vulnerability of your company and personally of you as a person and leader? What factors should be avoided? What can prevent you from taking advantage of opportunities and benefits to achieve your goals?
The next step in the SWOT analysis is to list the available prospects for your project. You probably already actively use some of these favorable environmental factors to promote and optimize your business, list them. Don't forget about potential opportunities. Describe the market situation in your niche. Think about what tools, tools, techniques and benefits can be applied to make your project unique and relevant.
After that, proceed to describe the existing external hazards and threats. Which of these factors hinder or may hinder you from achieving the intended result? Is there a large number of your competitors, enemies, ill-wishers who can harm your business and prevent it from developing? In the SWOT analysis method, threats and opportunities always refer to the external environment, and strengths and weaknesses - to the project itself.
When all the lists are drawn up, proceed with the formation of conclusions and conclusions. They must answer a number of important issues about how to use your strong positions competently, how to eliminate shortcomings and problem areas, how to take advantage of new opportunities in practice, how to minimize risks and avoid dangers.

Listing, cataloging and examining these four groups of factors is not a major part of the SWOT analysis method. The most important thing happens later, when the data has already been collected and structured: looking for ways to turn problems into advantages, to make weak points into strengths, and to make external threats serve to the benefit of your business.
If at this stage it becomes clear exactly what measures and steps need to be taken, be sure to plan them for the near future and actively begin to implement them.

SWOT Analysis Method Rules

SWOT analysis seems to be a simple, even primitive method, but in practice, building a matrix can be difficult. The problem lies in the quality of the initial data: if they are outdated, or were initially unreliable (which often happens when we collect information about the external environment), or are too abstract and generalized, then the method will not lead to the desired result.
So practical use SWOT analysis requires adherence to some important rules:

Limit the scope of your study to each of the quadrants. The analysis of the business as a whole will turn out to be too divorced from practice and, as a result, useless, because to develop a strategy, information is needed on very specific aspects of the operation of the enterprise. It is worth focusing attention on each of them and subjecting them to a SWOT analysis.
Decide on the wording: what will you consider strength, what weakness, and what will be attributed to opportunities and risks. Internal factors - the merits and demerits of the company - can be controlled directly, but it is impossible to influence the external ones. Therefore, these areas - inside and outside the business - must be clearly separated, and, for example, internal problems do not write down as threats, and do not rank opportunities as strengths.
When analyzing advantages and vulnerabilities, look at your project from the outside, like a client or a competitor. If something is a dignity for the consumer and motivates him to buy the company's products, then this is a strong point.

If some services or commodity items offered by your company are more popular than similar products and services of competitors, this is also a business advantage. That is, both strength and weakness are determined by the market, and not by the analyst manager's ideas of how to do it right. When the list of advantages and disadvantages grows too large, it is useful to rank them by importance (from a consumer perspective).

Use a variety of reliable sources of information. Try to be objective in your SWOT analysis. Best option: first implement extensive marketing research and then use this method but this is not always available. However, you can conduct monitoring on your own (using questionnaires, analysis of publications about the company in the media, etc.).

Several people should be involved in this task, since the personal preferences of each significantly limit the scope of the parameters under consideration. In the course of collecting and analyzing data, it is advisable to exchange ideas and guesses so that the work is grouped.

Formulate your thoughts as clearly and concretely as possible, avoid ambiguity and unnecessary phrases. The quality of the application of SWOT analysis as a method depends on the accuracy and capacity of the formulations. For example, the term "modern equipment" is very vague: under it can hide new machines in workshops, and new technologies for communication with suppliers.

If all these recommendations have been followed, then the SWOT analysis method will help to solve such problems as:

identification of the dynamics of the position of the enterprise in the market environment, among competing firms;
taking into account the results of a deeper analysis of the company's activities and building strategic plans in accordance with them;
creation of several strategies of behavior in the market (for the most probable scenarios of the development of events).

These can be options such as the elimination of threats (the third and fourth quadrants of the SWOT matrix), the continuation of the current course (no change, since everything suits everything), the optimization of the use of resources and the development of reserves (the first and second quadrants).

Internal environmental factors include strengths and weaknesses. That is, these are any characteristics of a future project that add the chances of success and give advantages in the market and what the project lacks, but what competitors have. That is, strengths can be written down, for example, super-professional team members, personal connections of the founder with potential customers (buyers) or the presence customer base... This is where the good one goes financial resource, a favorable loan or the possibility of using an investment cushion. Weak points also need to be written honestly. Here, directly opposite factors may appear, for example, the impossibility of finalizing the product due to the small amount financial resources or lack of a customer base.

Environmental factors include the categories of opportunity and threat. This is all that influences the project from the outside, gives additional advantages to the business idea or reduces its chances. For example, the growth or decline of the market segment in which it is planned to start working, a favorable economic situation in the country, increased investor interest in this market segment, or, conversely, a crisis and fading attention.

The factors are recorded in the table in the following form:

That is, among the external factors there may be market trends, sales structure, competitive environment, barriers to market entry. As well as legislation and political situation, economic situation of the country, region, socio-demographic factors, changes in technology, international environment, ecological environment.

Internal factors should be looked for in the following list: management, marketing, personnel, analysis of the company's sales system, analysis of the product portfolio, analysis of competitors' activity, the presence of a sustainable competitive advantage, analysis pricing policy... SWOT analysis does not imply the mandatory use of specific financial or economic categories. Therefore, this method is applicable in a variety of situations, to build strategies for any kind of organization.

Sample SWOT Analysis

Let's say an individual entrepreneur plans to sell homemade pies to grandmothers in small wholesale so that they can then resell them at retail.

A SWOT analysis of this business idea might look like this:

It is important to note that if the quality target audience there will not be grandmothers, but, for example, schoolchildren and pies will be sold to them personally, the SWOT analysis must be repeated, since the factors may be different.

What is the convenience of SWOT analysis?

The convenience of SWOT analysis is that, by formulating potential problems for the business, it is possible to adjust the strategy and eliminate the interfering factors. For example, before you start baking pies, you can take a month to meet grandmothers who want to make money. You can also look for acquaintances who have connections with the supervisory authorities. That is, it is important to consider interference not as a final judgment, but as tasks that need to be addressed. Of course, if objectively external environment leaves no chance for a business idea, then, most likely, you will have to change the idea. Influence legislation customs duties or industry control rules can only be made by large corporations and associations of representatives of specific industries. Unfortunately, small businesses cannot do this.