SWOT stands for strength, weakness, opportunity and threat.
Generally speaking, SWOT can be divided into two parts: the first part is S and W (strengths and weaknesses are internal factors), which are mainly used to analyze internal conditions; The second part is O and T (opportunities and threats are external factors), which are mainly used to analyze external conditions.
Using this method, we can find out the factors that are beneficial to ourselves and worthy of development, as well as the things that are unfavorable to ourselves and should be avoided, find out the existing problems, find out the solutions and make clear the future development direction. According to this analysis, we can classify the problems according to the priority order, make clear which ones are urgently needed to be solved, which ones can be postponed slightly, which ones are obstacles to strategic goals and which ones are tactical problems, list these research objects, arrange them in matrix form, and then match and analyze various factors with the idea of system analysis, from which we can draw a series of corresponding conclusions, which are usually decision-making and conducive to leaders and managers to make more correct decisions.
SWOT analysis method is often used to formulate the group development strategy and analyze competitors. In strategic analysis, it is one of the most commonly used methods.
Use of Swart analysis method
SWOT analysis mainly includes the following aspects:
I. Analysis of environmental factors
Using various investigation and research methods, this paper analyzes various environmental factors of the company, namely external environmental factors and internal capacity factors. External environmental factors, including opportunities and threats, are favorable and unfavorable factors that directly affect the company's development and belong to objective factors. Internal environmental factors, including advantages and disadvantages, are positive and negative factors in the development of the company itself. When investigating and analyzing these factors, we should not only consider the history and present situation, but also consider the future development.
Advantages are internal factors of the organization, including: favorable competitive situation; Adequate financial resources; Good corporate image; Technical strength; Economies of scale; Product quality; Market share; Cost advantage; Advertising offensive, etc.
Disadvantages are also internal factors of the organization, including: aging equipment; Management confusion; Lack of key technologies; Backward research and development; Lack of funds; Poor management; Product backlog; Poor competitiveness.
Opportunity is the external factor of the organization, including: new products; New market; New demand; Cancel foreign market barriers; Competitor mistakes, etc.
Threats are also external factors of the organization, including: new competitors; The number of substitute products has increased; Market tightening; Changes in industrial policies; Economic recession; Changes in customer preferences; Unexpected events, etc.
The advantage of SWOT method is that it considers the problem comprehensively, is a systematic thinking, can closely combine the "diagnosis" and "prescription" of the problem, has clear thinking and is easy to test.
Second, build a SWOT matrix.
The SWOT matrix is constructed by sorting the factors obtained in the survey according to their priority or influence degree. In this process, those factors that have a direct, important, massive, urgent and lasting impact on the company's development are given priority, while those indirect, secondary, rare, urgent and short-lived factors are ranked behind.
Third, make an action plan.
After analyzing the environmental factors and constructing the SWOT matrix, the corresponding action plan can be made. The basic idea of making a plan is: give full play to advantages, overcome disadvantages, take advantage of opportunities and defuse threats; Consider the past, base on the present and focus on the future. Using the comprehensive analysis method of system analysis, the various environmental factors considered in the arrangement are matched and combined, and a series of optional countermeasures for the company's future development are obtained.
Simple rules for successful application of SWOT analysis method
* SWOT analysis must have an objective understanding of the company's strengths and weaknesses.
* SWOT analysis must distinguish between the company's current situation and prospects.
* SWOT analysis must be comprehensive.
* SWOT analysis must be compared with competitors, such as superior or inferior to your competitors.
* Keep the SWOT analysis concise and avoid complication and over-analysis.
* SWOT analysis method varies from person to person.
Limitations of SWOT model
Like many other strategic models, SWOT model was put forward by McKinsey a long time ago and has the limitations of the times. In the past, enterprises may pay more attention to cost and quality, but now enterprises may pay more attention to organizational processes. For example, how to transform the old electric typewriter into a printer? Should I be a printer or other mechanical and electrical products? From the SWOT analysis, the advantage of electric typewriter manufacturers lies in electromechanical, but it seems that there are more opportunities to develop printers. As a result, some developed towards printers and died miserably; Some companies have made great progress in razor production. See if you want an opportunistic growth strategy or a competency-based growth strategy.
SWOT does not take into account the initiative of enterprises to change the status quo. Enterprises can create their own advantages by looking for new resources, so as to achieve strategic goals that could not be achieved in the past.
In the process of using SWOT analysis, you may encounter some problems, which is its adaptability. SWOT analysis can be used in too many situations, so it must be adaptable to develop. However, this has also led to many abnormal phenomena.
The problems caused by the basic SWOT analysis method can be solved by the more advanced power SWOT analysis method. Therefore, it is most important to pay attention to the basic judgment of things and whether the basic SWOT analysis method is applicable.