Enterprise capabilities in swot analysis. SWOT analysis method: apply it effectively

Strategy development begins with an analysis of the external and internal environment. The starting point for such an analysis is the SWOT analysis, one of the most common types of analysis in strategic management. SWOT analysis allows you to identify and structure strengths and weak sides firms, as well as potential opportunities and threats. This is achieved by comparing internal forces and weaknesses of their company with the opportunities that the market gives them. Based on the quality of compliance, it is concluded in which direction the organization should develop its business, and ultimately the allocation of resources to segments is determined.

The purpose of the SWOT analysis is to formulate the main directions for the development of the enterprise through the systematization of the available information about the strengths and weaknesses of the company, as well as potential opportunities and threats.

Tasks of SWOT-analysis:

Identify strengths and weaknesses compared to competitors

Identify opportunities and threats in the external environment

Associate strengths and weaknesses with opportunities and threats

Formulate the main directions of enterprise development

SWOT Analysis Basics

SWOT is an abbreviation of 4 words:

S trendth - strength: an internal characteristic of the company that distinguishes this enterprise from competitors.

W eakness - weakness: an internal characteristic of the company, which in relation to a competitor looks weak (undeveloped), and which the company has the power to improve.

O pportunity - opportunity: a characteristic of a company's external environment (i.e. market) that provides all participants in this market with the opportunity to expand their business.

T hreat - threat: a characteristic of the external environment of the company (ie the market), which reduces the attractiveness of the market for all participants.

SWOT analysis in general form is built using the following table.

Table 1. General form SWOT analysis

Elements of the internal environment: strengths and weaknesses

Under the strengths and weaknesses can hide a wide variety of aspects of the company. The categories most frequently included in the analysis are listed below. Each SWOT is unique and may include one or two of them, or even all at once. Each element, depending on the perception of buyers, can be either a strength or a weakness.

Marketing

2. Pricing

   Promotion

   Marketing Information/Intelligence

   Service/staff

   Distribution/Distributors

   Trademarks and positioning

Engineering and new product development. The closer the relationship between marketing and technical department, the more important these elements will be. For example, a strong relationship between the new product development team and the marketing department allows direct use feedback from buyers in the design of new products.

Operational activities

1. Manufacturing/engineering

   Sales and marketing

   Processing orders/transactions

Staff. This includes the skills wage and bonuses, training and development, motivation, working conditions of people, staff turnover. All of these elements are central to the successful implementation of a customer-focused marketing philosophy and marketing strategy. The role of personnel in the following areas is being investigated.

1. Research and development

   Distributors

   Marketing

   After-sales service/service

   Service/customer service

Management. Sensitive and often controversial, but sometimes requiring changes, management structures directly determine the success of the implementation of a marketing strategy. Such aspects should be reflected in the analysis.

Company resources. Resources determine the availability of people and finance, and thus affect the company's ability to capitalize on specific opportunities.

Importance careful analysis strategies

When doing business, people face all sorts of difficulties and surprises. Moreover, such activity consists of processes of various levels of complexity. This means that in business you need to act based on one or another long-term plan. We often use the word "strategy" in our life. What does it mean? Usually this word means planning complex activities over a long period of time. It should take into account both various complex processes and possible surprises and difficulties that may arise both in the business itself and in the outside world that affects it. This is a very difficult task. It is even difficult to understand how to start this business, where, in fact, to begin. We use such a wonderful tool as SWOT analysis. Examples of its application can be very diverse.

Scheme holding analysis

Let's show what a SWOT analysis looks like using an example of an enterprise. The analysis carried out according to this methodology will create a base, a basis for a strategy for further activities. So, let's get acquainted with the methodology in more detail. The name itself is the first letters of four words in English language. These words: opportunities (opportunities), threats (threats), strengths(strengths) and weaknesses (weaknesses) correspond to four main sections. Where can this type of analysis be applied? Obviously, to the study of most of the various complex processes in the economy and in society. This can be the study of not only an individual business, but also the work of an entire economic sector, for example.

SWOT analysis by example

Let's consider how to apply this approach to the analysis of the activities of an individual business enterprise. When we conduct a SWOT analysis on the example of an enterprise, the first stage consists in the most careful study of the various features of the company's work. At the second stage, it is also necessary to carefully study the external environment for the functioning of the business. These two initial stages of analysis lay the foundation for further action. Here it is required to consider many aspects - both characterizing the firm itself and describing in detail the external environment. Now all the information received must be correctly classified, distributed into the appropriate sections. Further, after careful preparation, we can indicate the strengths of our business, weaknesses that still need to be worked on, and

work. It also becomes more understandable features that make sense to develop in the future. And all kinds of risks and threats that may have to be faced in the future become clearly formulated. The next step is to process the results. After the data has been collected, analyzed and classified, we have an information basis for strategic planning business activities. Here it should be noted that, in fact, the SWOT analysis itself, using the example of an enterprise, ends at this point, then you need to draw conclusions and base your future work on them. It remains to consider exactly how we can make the most of our strengths, how to strengthen our weak positions, with the help of which we can reduce the risk from possible threats. And carefully study the opportunities that open up. SWOT analysis commercial enterprise happens in the same way.

Detailed example SWOT-analysis

Now suppose that you want to practice such an analysis and use its results for your activities. For example, let's use a fictitious small business firm. So, you have decided to conduct a SWOT analysis. First you need to invite interested people and arrange something like brainstorming to generate the right ideas. As we remember, we need to formulate ideas related to four categories. The first two categories (strengths and weaknesses of the enterprise) reflect the internal activities of the company, the other two (threats to the organization and its opportunities) reflect the characteristics environment not controlled by the enterprise. In the process of generating ideas, you need to limit criticism in order to spur the creative process. You also need to remember that it is not such a rare situation when some factor is both a strength and a weakness (for example, the growth of the enterprise scale strengthens the business itself, but at the same time is a factor that complicates the process of managing the company). The creation, thus, of a table from the indicated sections, done in the most complete manner, is the goal of the first stage of the analysis. Let's illustrate this.

Strengths of the firm:

1. Good reputation.
2. Quality product.
3. Professional team.
4. Large customer database.

Weaknesses of the company:

1. There are not enough employees.
2. Unreliable providers.
3. Too little advertising budget.
4. It's time to upgrade the equipment.
5. There is no business plan, strategic goals are not defined.

Opportunities available in the outside world:

1. The competitors are not very strong.
2. Opportunity to enter new market niches.
3. Opportunity to improve our product.
4. Opportunity to receive additional investments.
5. Opportunity to expand our sales to other territories.

Threats from the outside world:

1. New competitors may appear.
2. Consumer preferences may change in a few years.
3. Changes in the economy.
4. Key employees may quit. Something like this (but much more detailed) will look like the result of the first stage of the SWOT analysis. What to do next with this list? Based on the points marked as strengths, the main priorities in the development of the enterprise are determined. They need to be strengthened in every possible way. Capabilities need to be developed as a matter of priority. In relation to weaknesses, measures must be taken to correct them; in relation to threats, one must be ready to repel them. Based on the above, a strategic plan for further development is drawn up. It is only necessary to remember that weaknesses and threats can have a useful flip side - for example, changes in the economy can change the rules of the market, which can provide new opportunities for the enterprise. This must be taken into account when drawing up this plan.

Possible area applications such analysis

With this analysis, you can evaluate the effectiveness of the business. A business can be called ideal if it has pronounced strengths and real favorable opportunities for development, while the threats remain insignificant. If great opportunities are combined with high risk, then this business can rightfully be called risky. It is typical for a mature business that both opportunities and threats are present at the same time, but the latter are not too pronounced. A SWOT analysis based on an enterprise example is a powerful tool for creating a business strategy. Its capabilities can also be effectively applied with great benefit in a wide variety of areas.

Business needs to constantly improve and adapt to changing market conditions. But before making changes, it is necessary to analyze - to identify strengths and weaknesses, threats and opportunities for development.

Many entrepreneurs do not pay enough attention to the analysis of their company. They believe that to get analytics you need to spend a large number of time, money and effort. However, this is not always the case.

A SWOT analysis will help you with this task. It will only take you a few hours to complete it. And, as a result, you will receive data that will allow you to form a development strategy for at least the next six months.

From the article you will learn in detail how to check your business for strengths and weaknesses, threats and opportunities for development.

What is SWOT analysis

SWOT analysis is one of the most common and easy to use types of business analysis. It can be used to identify internal and external factors that affect the success of the company.

SWOT business analysis allows you to evaluate the company's performance by four factors:

S - strength (strengths). Competitive advantages of your enterprise. For example,

• low production cost,
• close-knit community of brand fans,
• high email KPIs.

W - weakness (weaknesses). Internal factors that hinder business growth reduce your competitiveness. For example,

• insufficient number of support staff,
• lack of configured trigger mailings,
• high customer acquisition cost.

O - opportunities (opportunities). External factors that can positively affect business growth. For example,

• improving the position of the site in organic search results,
• exit of a competitor from the market.

T - threats (threats). Negative external factors that may adversely affect the further development of the enterprise. For example,

• shrinking market size
• entry into the market of a major competitor with a large number of advantages,
• tightening of business conditions on the part of the state regulator.

Who needs a SWOT analysis of a company

SWOT analysis of an organization is suitable for absolutely all types and sizes of businesses.

With its help, startups and owners of new enterprises will be able to take into account all the risks and draw up a development strategy in such a way as to become competitive even at the first stages after launch and, soon, overtake competitors.

For existing companies, it is important to conduct a SWOT analysis of the enterprise at least once a year, even in cases where things are going well.

The analysis will help determine the company's development strategy in accordance with current market conditions.

Important!

After conducting the analysis, you will be able to transform it into a marketing strategy for the company's growth for the next period (6 months / 1 year). By knowing your strengths, your marketing messages will be more accurate.

At the same time, knowing the weaknesses, you can make every effort to level them.

Advantages

The popularity of conducting SWOT analytics is due to several factors.

Versatility

No matter what market share you own, whether you are in manufacturing or retail, online or offline, this method of analysis is applicable to all enterprises. It can also be used to evaluate the effectiveness of specific departments of the company.

Simplicity

SWOT analysis of a brand can be carried out by the owner or manager of the enterprise. To carry it out, you do not need to resort to complex calculations and conduct large studies. It is enough just to be aware of the real state of affairs in the company and in the market as a whole.

A complex approach

During the SWOT analysis, both external and internal factors that affect the company's activities are taken into account. Therefore, the results of the analysis will help to understand the real state of affairs, and will not show only one side of the coin.

Flaws

Even though SWOT is a very efficient and convenient way to conduct analytics, it has some disadvantages.

Subjectivity

There is no standard set of indicators to consider when conducting an analysis. You have to rely on the personal opinion of analysts about the company and its position in the market.

Blurring results

Very often it is impossible to evaluate the factors of analysis in quantitative terms. Therefore, SWOT analysis helps to form a general idea of ​​the enterprise and its position in the market, but does not allow to evaluate and compare the influence of various factors.

How to use analysis

When starting a SWOT analysis, you need to clearly define the main goals of your organization. In order to analyze the advantages, disadvantages, opportunities and risks in the application to the implementation of the tasks.
In your analysis, consider only significant factors. For example, the delivery price is 5 UAH lower than that of competitors should not be considered as one of the company's advantages.

5 Rules for Effective SWOT Analysis

1. Conduct research on each market segment, department, product to get more objective results.
2. Don't confuse opportunities with advantages and threats with disadvantages. Advantages and disadvantages are internal factors of the enterprise. You can control them. Opportunities and threats are external uncontrollable factors.
3. Identify strengths and weaknesses from the buyer's point of view. To verify your assumptions, conduct interviews or questionnaires among clients.
4. Use precise, unambiguous wording.
5. For each factor of disadvantages and risks, try to find ways to eliminate or minimize. For benefits and opportunities - ways to enhance and use. Record all data in a decision matrix.

Preparation for analysis

Before conducting an analysis, it is necessary to study the market in which the company operates. Special attention worth researching your target audience, in order to clearly understand the "pain" of a potential client and focus your business on satisfying the needs of the user, and not just selling your product to him. it key factor in building long-term relationships with clients.

Identify the main competitors and analyze their companies from the point of view of a potential client. Based on this, you can highlight your strengths and weaknesses.

Step-by-step algorithm how to do SWOT analysis

There is a special methodology for conducting SWOT analysis to obtain the highest quality results. It consists of 5 stages.

Step 1. Select questions for analysis

The following questions must be answered. They will help you highlight the most important information and tune in to further work.

Examples of questions to identify strengths:

• What is our main competitive advantage?
• How do we outperform our competitors?
• What are the benefits for our employees?
• What resources do we have?
• What is our uniqueness?
• Why do clients use our services?
• What assets do we have?

Questions to identify weaknesses:

• What is the competitive advantage?
• Where are our competitors better than us?
• Why are our customers not happy?
• What resources are we lacking?
• What are our employees complaining about?
• What are the disadvantages of the product?
• What factors prevent you from making a product better?
• What internal processes can be improved?

Questions to identify enterprise opportunities:

• How can the current political and economic situation support business growth?
• What external resources can be attracted to accelerate development?
• How can current market trends benefit us?
• Are the opportunities permanent or temporary?

Examples of questions to identify threats:

• Which new market participants are potentially dangerous for us?
• How can the political and economic situation impair our efficiency?
• What new products and technologies can be more attractive to users than ours?
• Can market trends adversely affect our business?

Step 2. Create a SWOT Analysis Table

With the help of a table (matrix), you can structure all the information received. It consists of four parts: strengths, weaknesses, opportunities and threats. All identified factors must be entered into the SWOT matrix in the appropriate blocks, sorted by importance.

Step 3. Finding Strengths and Weaknesses

Identify the main internal factors that affect the success of the company. Factors that are better than competitors are strengths, those that are worse are weaknesses.

Sort the received data in such a way that at the top of the list are those factors that affect the final profit to the greatest extent.

Step 4: Seek Growth Opportunities

Step 5: Search for business threats

Determine what can reduce your company's revenue. At the same time, never forget that threats are understood as external factors. They are not under your control - you cannot influence them.

Quantitative method of analysis

In practice, a quantitative method is often used. Its essence lies in the fact that after identifying all the factors, you evaluate them on a point scale. Thanks to this, the results of the analysis will become more visual, as they give an understanding of how important this or that factor is.

A full-fledged quantitative SWOT analysis requires a lot of time. But there is an alternative method, which is almost as accurate as the classical one and requires less time.

SWOT analytics on the example of an online store

Consider compiling a SWOT analysis table using the example of an online home appliance store.

Strengths: Top positions in Google search results for relevant keywords provide 80% of traffic and 70% of conversions. Call center operators, on average, have 3 years of experience and are well versed in the range and specifications of household appliances. Self-importation of products of certain trademarks provides low cost.	Weak sides: The mobile version of the website is too heavy. This makes it inconvenient to use the site using the mobile Internet. The goods are located in different warehouses of the country, and therefore the client often needs to wait up to 5 days for an order. Remarketing not implemented Google Ads, abandoned carts and trigger mailings to retain potential and existing customers.
Capabilities: Stable market development ecommerce likely to increase overall sales. New Youtube channel can increase brand awareness and increase the overall amount of traffic to the site. The main competitor plans to close its business. His clients can come to us.	Threats: The appreciation of the dollar will increase the cost of purchasing goods in the national currency. As a result, revenue will fall. The decline in the standard of living in the country may have a negative impact on the overall revenue. Increasing quantity mobile traffic will negatively affect the conversion of the site due to the outdated mobile version.

The factors in the table are sorted by importance. The following conclusions can be drawn from the most important criteria:

• It is worth continuing to engage in search engine optimization, because it is the most effective traffic channel.
• The mobile version of the site should definitely be updated. This is guaranteed to affect the conversion rate with mobile devices and the total number of purchases.
• You should not go offline, because the market is developing steadily.
• If the dollar will rise, you will have to raise prices in the store.

5 examples of solutions based on SWOT analysis

The main goal after SWOT analytics is to correctly interpret the received data. This will help to cope with difficulties and provide further development business. Consider 5 examples of problems with a potential solution.

1. Employees of the marketing department do not complete their tasks within the time frame set by the head of the department.

Solution: hire a project manager. It will help you correctly set tasks, prioritize them and correctly estimate the time to complete them.

2. Offline store rents are on the rise while their revenue is steadily declining.

Solution: create an online store and start moving your sales online.

3. The decline in living standards has a negative impact on sales of premium clothing.

Solution: increase the share of products for the middle class.

4. 65% of organic traffic comes from a corporate Youtube channel. In the event of an unexpected blocking of the channel, most of the traffic will be lost.

Solution: start developing other sources of traffic. For example, do search engine optimization or develop a corporate page on Facebook.

5. On the manufacturing plant for the manufacture of products from polyethylene, the old extruder often fails, and there are no funds yet to purchase a new one.

Solution: find partners on whose equipment you can produce products, giving them a part of the profits.

conclusions

SWOT analysis of a small business or large enterprise allows to identify weaknesses and threats, as well as strengths and opportunities for development. Thanks to this, you will be able to organize the company's activities in such a way as to effectively resist external threats, successfully compete in the market and steadily increase the efficiency of your business.

To provide the most complete and reliable data in SWOT analytics, analyze not only for the entire company, but also for specific departments and products. At the same time, try to get the opinion of as many knowledgeable people as possible in order to obtain objective data. Thanks to this, you will be able to make the right and effective decisions in the development of your business.

The factors of the internal environment include strengths and weaknesses. That is, these are any characteristics of the future project that add chances for success and provide advantages in the market and what the project lacks, but what competitors have. That is, strengths can be written, for example, super professional team members, personal connections of the founder with potential customers (buyers) or the presence client base. Here comes the good financial resource, a profitable loan or the possibility of using an investment cushion. Weaknesses also need to be written honestly. Directly opposite factors may appear here, for example, the impossibility of finalizing the product due to the small amount financial resources or lack of a customer base.

The environmental factors include the categories of opportunities and threats. 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, the favorable economic situation in the country, the increased interest of investors in this market segment, or, conversely, the crisis and the fading of attention.

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

That is, external factors may include market trends, sales structure, competitive environment, market entry barriers. As well as legislation and political situation, economic situation countries, regions, socio-demographic factors, technology change, 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 competitor activity, the presence of a sustainable competitive advantage, pricing policy analysis. SWOT analysis does not imply the mandatory use of specific financial or economic categories. That's why this method applicable in a variety of situations, to build strategies for any kind of organization.

SWOT analysis example

Let's say 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 target audience is not grandmothers, but, for example, schoolchildren and pies will be sold to them personally, the SWOT analysis must be carried out again, as the factors may turn out to be different.

What is the benefit of SWOT analysis?

The convenience of SWOT analysis is that, having formulated potential problems for the business, you can adjust the strategy and eliminate interfering factors. For example, before you start baking pies, you can take a month to get acquainted with grandmothers who want to earn money. You can also look for friends who have connections with the supervisory authorities. That is, it is important to consider interference not as a final verdict, but as tasks that need to be solved. 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 large corporations and associations of representatives of specific industries. Small businesses, unfortunately, can't do it.

Accordingly, the question “how to do a SWOT analysis” is of particular importance in the life of an entrepreneur. It is about how to do a SWOT analysis that we will talk about today. Rather, we develop step by step instructions- a questionnaire, after which the same question () will be permanently closed for you.

First, let's look at what a SWOT analysis is (I apologize in advance to those for whom this is superfluous). SWOT analysis is a planning tool and four comparative business elements. These elements are: Strengths (strengths), Weaknesses (weaknesses), Opportunities (opportunities) and Threats (threats). A properly done SWOT analysis gives an entrepreneur great amount useful information needed to make the right business decisions.

Learning to do swot analysis

SWOT analysis - 4-step instruction

For greater clarity, we will divide the SWOT analysis process into steps, each of which is represented by several questions. The answers to these questions are, in fact, the process of conducting a SWOT analysis. So.

Step 1 — Scanning the Business Environment

In this step, looking at our business environment, we must identify the factors that affect or may affect our business. All factors can be divided into internal and external. To determine these factors, answer the following questions:

1. What legal factors (laws and other regulations) affect (or may affect) my business?

2. What environmental factors affect (or could affect) my business?

3. What political factors influence (or can influence) my business?

4. What economic forces affect (or could affect) my business?

5. What geographic factors affect (or could affect) my business?

6. What social factors affect (or could affect) my business?

7. What technology factors affect (or could affect) my business?

8. What cultural factors influence (or can influence) my business?

9. What market factors affect (or could affect) my business?

The answers to the first 9 questions give you information about external factors, i.e., about the impacts on your business that are in your environment, regardless of the existence of your business. All these questions, one way or another, are worth asking yourself in order to fully understand what can have any impact on your business. Of course, different factors will have a different impact in different business areas, but that's exactly what you'll understand by answering these questions.

10. Does (or could) my business be affected by competition?

11. Does (or can influence) my business the factor of management and business management?

12. Does the chosen business strategy influence (or can influence) my business factor?

13. Does (or can influence) my business the business structure factor?

14. Does (or can influence) my business factor employees?

15. Does (or can influence) my business factor affect my business goals?

16. Does (or can influence) my business the factor of leadership?

17. Does (or can it) affect my business the operational management factor?

18. Does (or can) technology affect my business in business?

The answers to questions 10 to 18 will give you information about how the factors associated with the entry of your business into the market will have in general. The list may not be exhaustive, much depends on the field of activity, but these are the main points.

And so, having answered the above questions, you will have an almost complete set of factors on which your business depends to one degree or another. Then you should analyze them and draw the right conclusions for yourself. In this regard, we proceed to the next step of our instructions on how to do a SWOT analysis.

Step 2. Analysis of the business environment

In this step of the SWOT analysis, we must analyze in more detail all the factors listed above and understand what they actually represent for us and our business. Let's do this, as you can guess, in a few questions. Here they are:

19. What legal factors for our business can be a threat, and what an opportunity?

20. What political factors for our business can be a threat, and what an opportunity?