Business needs to be constantly improved and adapted 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 analyzing their company. They believe that obtaining analytics requires spending a large amount of time, money and effort. However, this is not always the case.

SWOT analysis will help you cope with this task. You will only spend a few hours on it. And, as a result, you will receive data that will allow you to formulate 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 easiest to use types of business analysis. With its help, you can identify internal and external factors that influence the success of the company.

SWOT analysis of a business allows you to evaluate the company’s activities based on four factors:

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

• low production costs,
• a close-knit community of brand fans,
• high KPIs for email campaigns.

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 cost of attracting a client.

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

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

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

• reduction in market size,
• entry of a major competitor into the market with many advantages,
• tightening of business conditions on the part of the state regulator.

Who can benefit from a SWOT analysis of a company?

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

With its help, startupers and owners of new businesses 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 in 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 analyzing you can transform it into marketing strategy company 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 your weaknesses, you can make every effort to level them out.

Advantages

Popularity conducting SWOT analytics is due to several factors.

Versatility

Regardless of what market share you own, whether you are in manufacturing or retail, online or offline, this method of analysis is applicable to all businesses. It can also be used to evaluate the effectiveness of specific departments of the company.

Simplicity

A 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 extensive research. It is enough just to be aware of the real state of affairs in the company and on the market as a whole.

A complex approach

During the SWOT analysis, both external and internal factors affecting 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 effective and convenient way of doing analytics, it does have some disadvantages.

Subjectivity

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

Blurry results

Very often it is impossible to evaluate the factors of analysis in quantitative indicators. Therefore, SWOT analysis helps to form a general idea of ​​the enterprise and its position in the market, but does not allow assessing and comparing 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 application to the implementation of the assigned tasks.
When carrying out the analysis, take into account only significant factors. For example, a delivery price that is 5 UAH lower than that of competitors should not be considered 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 factors beyond our control.
3. Identify strengths and weaknesses from the buyer's perspective. To verify your assumptions, conduct interviews or surveys among clients.
4. Use precise, unambiguous language.
5. For each factor of disadvantages and risks, try to find ways to eliminate or minimize them. For advantages and opportunities - ways to strengthen and use. Record all data in the decision matrix.

Preparing for analysis

Before carrying out the analysis, it is necessary to study the market in which the company operates. Special attention worth taking the time to research your target audience, in order to clearly understand the “pain” of a potential client and orient your business to meet the needs of the user, and not just sell him your product. This is a key factor in building long-term relationships with clients.

Identify your 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 for doing SWOT analysis

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

Step 1: Identify questions for analysis

The following questions need to be answered. They will help you highlight the most important information and get ready for further work.

Examples of questions to identify strengths:

• What is our main competitive advantage?
• How are we superior to our competitors?
• What benefits do our employees have?
• What resources do we have?
• What makes us unique?
• Why do clients use our services?
• What assets do we have?

Questions to identify weaknesses:

• What is the competitive advantage?
• What are our competitors doing better than us?
• What are our clients not happy with?
• 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 better product?
• What internal processes can be improved?

Questions to identify enterprise capabilities:

• 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 worsen our effectiveness?
• What new products and technologies may be more attractive to users than ours?
• Could market trends adversely affect our business?

Step 2. Create a SWOT analysis table

Using 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 influencing the company's success. Factors that are better than competitors are strengths, those that are worse are weaknesses.

Sort the data received so that at the top of the list are those factors that affect the final profit to the greatest extent.

Step 4: Find Growth Opportunities

Step 5. Search for business threats

Determine what could reduce your company's income. At the same time, never forget that threats refer to external factors. They are not under your control - you cannot influence them.

Quantitative method of analysis

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

Carrying out 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 using the example of an online store

Let's consider compiling a SWOT analysis table using the example of an online store of household appliances.

The factors in the table are sorted by level of 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 is definitely worth updating. This is guaranteed to impact your mobile conversion rate and overall purchases.
• You shouldn’t go offline, because the market is developing steadily.
• If the dollar rate rises, you will have to raise prices in the store.

5 examples of solutions based on SWOT analysis

The main goal after SWOT analysis is to correctly interpret the data obtained. This will help overcome difficulties and ensure further business development. Let's look at 5 examples of problems with potential solutions.

1. Marketing department employees do not complete assigned tasks within the deadlines set by the department head.

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

2. Rents for brick-and-mortar stores are rising, while their income is steadily declining.

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

3. Declining living standards have 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. If the channel is unexpectedly blocked, most of the traffic will be lost.

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

5. On manufacturing plant When manufacturing polyethylene products, the old extruder often breaks down, and there is no money yet to buy a new one.

Solution: find partners whose equipment you can use to produce products, giving them a portion of the profits.

conclusions

A SWOT analysis of a small business or large enterprise allows you 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 counter external threats, successfully compete in the market and steadily increase the efficiency of your business.

To ensure the most complete and reliable data in SWOT analytics, conduct analysis 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 developing your business.

1. Short story SWOT
2. Why and when to conduct a SWOT analysis
3. S.W.O.T. Detailed analysis of components
4. Actions based on the results of the SWOT analysis
5. Examples of successful and unsuccessful SWOT analysis
6. From SWOT to TOWS? How to deploy the algorithm and achieve the best results
7. SWOT Templates

What is SWOT?

SWOT is an acronym that stands for Strengths, Weaknesses, Opportunities and Threats.

SWOT analysis is a methodological tool designed to help companies and their employees optimize productivity, increase competitiveness, maximize potential and minimize risks. SWOT Model helps you make better decisions - both large and small. It allows you to evaluate the effectiveness of actions - from the launch of a new product or service to a merger with another organization or acquisition subsidiary. SWOT is a method that, when used correctly, gives only positive results.

The Fundamental Guide to SWOT Analysis was designed, written and designed by Justin Homer and Jackson Hille.

Justin Homer lectures at the University of California, Berkeley and will soon publish two books.

Jackson Hille is one of the FormSwift partners and a recipient of a Certificate of Excellence in American Studies from the University of California at Berkeley.

The guide contains all the information a SWOT specialist needs. It describes examples of the use of SWOT by prominent companies (for example, Dreamworks and Uber), carefully examining all the components and applications of the analysis. At the end are presented free templates. The guide will be useful to everyone, including heads of creative startups and entertainment companies, specialists in strategic planning in non-profit and government organizations, as well as private entrepreneurs involved in the sale of real estate or the restaurant business.

Who is this guide intended for?

SWOT is a method that can be used for any business goal, large or small. Whether you run a Fortune 500 company and are trying to determine the value of a special offer or are evaluating your position to chart an individual trajectory, the guide will serve you well.

Why do you need a manual?

Your company is at risk! You risk freezing in place! Lack of movement can destroy any business, and SWOT analysis is an effective antidote. This guide reveals all its intricacies.

It is written in accessible language and contains concise but effective examples. More importantly, it is backed by extensive research on the use of SWOT, the results of which have been published in leading business magazines.

How to use the guide?

In this guide SWOT method viewed from different angles, understandable to people with varying degrees of awareness.

If you are just starting out with SWOT, we recommend that you read the entire text from beginning to end to better understand the history of the method and its scope.

If you are already familiar with SWOT, you can review the basics or skip to the section you need (for example, about using the method in a certain type of organization). You may find our templates useful. Use the guide as you wish!

Summary and examples of using SWOT

In 1960 several American corporations launched a project at Stanford University to develop an improved method for strategic planning. This is how SWOT was born.

It is suitable for:

• rethinking the company’s position in the market (Weaknesses, Threats - Disadvantages and Risks from competitors);
• determining the company's strengths (Strengths - Advantages);
• searching for new areas of development (Opportunities - Opportunities).

It's all SWOT!

Although "SWOT was originally developed for business needs," "it can be used for the health and development of the community as a whole, and even for personal needs."

Below are examples of the use of SWOT analysis in a company that provides taxi services using mobile application.

Uber + Lyft

SWOT Example

Strengths

• Using a special application to find drivers and clients and a cashless payment system greatly simplifies the work process.
• Lack of staff and dispatchers
  reduces costs.
• Drivers use personal cars, so the company has access to a huge fleet Vehicle that do not require maintenance.
• Drivers have full control over their schedule.

Weaknesses

• The business model is easy to copy.
• Using GPS to track the location of drivers and customers creates privacy risks.
• The flow of customers is unpredictable and changes quickly.
• The company does not establish relationships with drivers, so the level of loyalty is extremely low.

Opportunity

In the next example, we will look at the birth of companies providing taxi services using mobile applications.

Let's imagine how the emergence of Uber and Lyft affected the activities of companies providing services in the traditional way. Usage latest technologies allowed them to easily penetrate the market.

They can expand to new sites (cities) or provide additional transportation services (for example, launch school buses).

Risks

The use of mobile apps has not only opened up new opportunities for Uber and Lyft, but also created serious risks for existing companies that have not mastered the latest technologies.

SWOT is often mistakenly used to justify existing practices. If you are conducting an analysis to find areas for development, you need to clearly identify any shortcomings.

Comments on individual companies

Uber services can only be used in some metropolitan areas, so the next stage of development may be to cover smaller cities and suburbs. However, the main threat to Uber comes from numerous complaints and proposals to legally prohibit the company's activities.

Dreamworks

DreamWorks has achieved a dominant position in the 3D animation industry due to two main advantages - large reserves (for example, the Shrek franchise) and an attractive work environment suitable for creative employees.

Logan decided that a busy training schedule and a trip to an international tournament could provide the team with new opportunities to gain experience, and the youth and potential injuries of the players posed significant risks.

Restaurant: By adding online food ordering and delivery, a business could gain new opportunities, while the opening of new restaurants and changes in food costs (for example, higher prices for fish) would pose a serious threat to it.

Construction firm: In terms of new opportunities, the firm could study the city's plans to expand the system public transport and explore how this expansion would impact the scale of private and corporate construction.

And here we come back to the basic tenet of SWOT: analysis is only useful when you compare yourself to your competitors.

Uber + Lyft

SWOT Example

Let's go back to the Uber and Lyft example. The services themselves arose under the pressure of mobile technologies on traditional companies that provided taxi services. If any of them had recognized this Risk earlier, they would have realized that a mobile offering could provide customers with the ability to get from one point to another efficiently and quickly.

By turning a Risk into an Opportunity, a company could evaluate its Weaknesses in terms of an existing Risk (in this case, lack of investment in technology or underdeveloped infrastructure for a mobile application), and then create strategic plan to eliminate the Disadvantages and use the Advantages (in this case, the experience of full-time drivers, knowledge of routes, etc.) to get ahead of competitors.

1. Brief history of SWOT

SWOT analysis was the product of years of research conducted by Stanford University in the 1960s and 1970s. By the late 1950s, many American companies were frustrated by the lack of results from their investments in strategic planning, so in 1960 some of them launched a project to develop new methods. This is how SWOT was born.

2. SWOT analysis

When to do a SWOT analysis

When should you conduct a SWOT analysis? SWOT analysis is beneficial in countless ways.

• Do you want to know how effective a new initiative, product or acquisition is?
• Do you need a solution to a specific business problem?
• Do you want to evaluate an existing and ongoing strategy?
• Do you have extra funds that need to be invested profitably?
• Are you a non-profit or state organization, received a large grant or donation and you don't know how to spend the money?
• Do you have new competitors? Do you need to evaluate a potential merger with another organization?
• Do you want to more accurately formulate your mission or social significance?

If you answered yes to at least one question, a SWOT analysis will definitely help you!

Ultimately, it will be useful in any situation that requires assessing the current state of affairs in the market (Disadvantages and Risks), identifying strengths (Advantages) and directions for development (Opportunities).

Why do a SWOT analysis?

Why is SWOT needed? SWOT analysis allows a company to accurately assess its position in its industry. Members of the Health Promotion and Community Development Working Group at the University of Kansas point out that “situation awareness facilitates effective strategic planning and allows for better decision making.”

“Simple and applicable in any context,” a SWOT analysis provides similar information so its results can be used to create a strategy that takes into account internal strengths and external opportunities and focuses on correcting (internal) weaknesses and eliminating (external) risks. Moreover, although “SWOT was originally developed for business needs,” “it can be used for the health and development of the community as a whole, and even for personal needs.”

3. S.W.O.T. Detailed analysis of components

Having determined the subject of analysis, you can begin to analyze all components. SWOT consists of four components - Strengths, Weaknesses, Opportunities and Risks. All of them are divided into two categories - external and internal. Internal components include Advantages and Disadvantages, external components include Opportunities and Risks.

Strengths

Once you've identified your main research question (for example, "Should I add Product X to the new line?"), try to articulate the benefits. Any organization must be sustainable and reliable. Charlie Ioannou defines benefits as "resources and production capabilities that can be used to gain a competitive advantage (Ioannue, SWOT Analysis - An Easy to Understand Guide, 47-49).

This definition makes you think about the most important aspect of evaluating Benefits, which is comparing yourself to your competitors. In other words, it is necessary to highlight the unique qualities of your company (for example, long life, a proven brand, low production costs, high quality services, strong online presence, etc.) These will be your Advantages.

Weaknesses

After this, it is necessary to identify existing shortcomings. Be honest with yourself. On the one hand, disadvantages are the absence of advantages. So, if one aspect of your business isn't a strength, it's probably a weakness. Cash flow, brand awareness, marketing budget, sales system, age of the company - weaknesses can be found in all of these. The main goal is to turn weaknesses into strengths, but this requires honesty that the organization needs improvement.

Having considered the internal components (Advantages and Disadvantages), let's move on to the external ones (Opportunities and Risks). Opportunities and Risks interact with each other in the same way as Advantages and Disadvantages. They have similar (external) dynamics that make it possible to evaluate them.

Opportunities

Opportunities are prospects for growth, greater profits and market share. Again, the evaluation is made in comparison with competitors. What capabilities differentiate your company from competitors? What capabilities would allow you to offer the same products or services, but more High Quality or at a lower price? What customer needs are you still not meeting?

Technology is an external factor that always presents new opportunities and, as discussed below, creates new risks. What technological innovations could reduce the cost of goods or services, speed up production or distribution, or improve the customer experience?

Remember that opportunities always involve action. If you don't act, your competitors will.

Risks

Finally, determine which aspects of your business are at risk. Are competitors developing similar products? Are they poaching yours? best employees? Such actions threaten your business.

Harvard Business Reviews defines Risks as “possible events that you cannot control, and if they happen, you must have a plan to mitigate the consequences.”

Do you know latest changes in legislation? Didn't you come out recently? new law increasing your costs? What about taxes? All of this can be considered a Risk.

Finally, technological innovations that provide new opportunities may create additional risks.

For example, you may be sued for insurance obligations or demand to legally prohibit the company's activities.

4. Actions based on the results of the SWOT analysis

Choosing an action plan based on the results of the analysis is difficult process, which should take into account the specifics of the company. However, there are general concepts about what approach should be taken. Here he is:

• Enjoy the Benefits
• Eliminate Disadvantages
• Identify Risks
• Invest in Opportunities

In addition, it must be remembered that the main purpose of a SWOT analysis is to assess the current state of affairs. As researchers from the University of Kansas write, it is necessary to look for new boundaries, not excuses. SWOT is often mistakenly used to justify existing practices. If you are conducting an analysis to find areas for development, you need to clearly identify any shortcomings.

5. Examples of SWOT analysis for companies from different industries

Tech startup

• Leadership, Management, Company Management

One of the most popular methods of collecting the necessary information is SWOT analysis, which is widely used in practice today by serious and successful businessmen.

You will learn:

• What is SWOT analysis?
• What problems can be solved with its help?
• What are the rules for conducting a SWOT analysis?
• What is a SWOT table?
• What method is used to carry out SWOT analysis?

Making a decision to launch a new one or choose a direction for development has already existing business represents a difficult task. Correct application helps to correctly assess its prospects and increase the likelihood of success. SWOT analysis allowing for an objective and comprehensive assessment of the enterprise.

Business success largely depends on timely adoption right decisions. Required condition This means obtaining comprehensive information about both your own enterprise and the state of the market, as well as other external factors.

Definition of SWOT Analysis

To put it briefly, SWOT analysis is a method that allows you to assess the current situation by considering it taking into account several aspects, including: the strengths and weaknesses of the enterprise, as well as external opportunities and threats.

First letters English words, denoting each of the listed terms, and gave the name to the method:

• strengths – S trengths;
• weak sides - W eaknesses;
• possibilities - O pportunities;
• threats – T heats.

An important feature of the method is the consideration of both internal factors, which include the strengths and weaknesses of the enterprise itself, and external ones, which are understood as opportunities and threats. It is an integrated approach to studying the current state of a company in the market and its development prospects that is the main reason for the popularity of SWOT analysis.

Fact. The term “SWOT analysis” was first used more than half a century ago – in 1963. It was used on one of the conferences, held at Harvard, Professor Kenneth Andrews.

Just two years after its appearance, SWOT analysis began to be used in practice when developing strategies various companies. Today it is actively used in all countries whose economies are developing according to market principles.

A checklist and a set of instructions for the manager that will save the company from ruin

How to understand that the commercial department is not doing its job and what to change? Check out the table prepared by the editors of Commercial Director and see if you need to worry. If you answer “yes” to at least one of the questions in the table, use the checklist of 14 questions for self-test to conduct an express audit, find failures and reboot the work of the sales department.

Objectives of SWOT analysis

The main purpose of applying the method is to develop a business strategy based on maximizing the use of the company's strengths and minimizing potential risks.

It is important to note that SWOT analysis is deservedly considered a universal tool that, when used correctly, is effective not only in relation to the enterprise as a whole, but also in relation to individual divisions or products. Moreover, the most important principles of analysis are often used when assessing a particular person and determining directions for his further professional or personal growth.

Despite this, the main area of ​​application of SWOT analysis is still business. In addition to the task indicated above, it allows you to solve other important tasks, such as:

• Analysis and assessment of competitors and their activities. In this case, the method under consideration is usually used in combination with others, for example, the Porter model, various marketing tools or PEST.
• Development step by step plan activities aimed at implementing the chosen development strategy of the company.
• Formation of the concept, tasks and main goals of the advertising campaign.
• Conducting competitive intelligence in order to compare the product planned for release with similar products already on the market, etc.

Important. Characteristic feature SWOT analysis is characterized by the absence of categories strictly tied to a specific type of activity. This allows the method to be successfully applied in a wide variety of fields and areas of business.

The popularity and widespread use of analysis based on the assessment of four key factors is explained not only by its universality, but also by the possibility of adaptation to the specific conditions of a business entity. As a result, an individual model is created based on general principles, which increases the efficiency of the analysis and the accuracy of the resulting estimates and forecasts.

Rules for conducting SWOT analysis

Before describing the essence of the method, which consists of the so-called SWOT table, it is necessary to consider the basic rules for its application. Following a few fairly simple and obvious recommendations for experienced specialists will make the application of the analysis more objective and competent.

The most important rules practical application The method under consideration is as follows:

• Selecting a specific area of ​​study. It is much more correct to consider a product, division or a separate direction of development than to analyze the work of the enterprise as a whole. As a result, the conclusions and estimates obtained will be more accurate and more suitable for practical use.
• Clear delineation of the constituent elements of the tableSWOT. Their detailed description is given below. It must be remembered that the essence of the method is to separately consider each of the factors and combine the resulting estimates and forecasts.
• Minimizing the subjectivity factor. Despite the absence large quantity quantitative parameters, the influence of personal opinion on the objects being assessed and analyzed should be reduced as much as possible.
• Gathering information from as many sources as possible. Continuation and development of the previous rule. The purpose of its implementation in practice is to increase the objectivity of the analysis.
• Specific and clear statements of conclusions. There is no point in writing phrases like this based on the results of the analysis: “We need to work more.” It is much more correct and effective to set clear goals expressed in quantitative form.

SWOT Analysis Table

The basis of the method is the matrix, or SWOT table. It is conventionally divided into two parts - the internal environment and external factors. Each of them is positively influenced by the company’s strengths and existing market opportunities, and negatively influenced by the company’s weaknesses and potential threats. It is logical to consider each of the elements of the analysis and the parameters that influence it in more detail.

Internal environment and factors influencing it

The advantages of the SWOT method include the ability to adapt to the specific conditions of the company or individual product. However, there are also some general principles studying the object of analysis, which are summarized in the table.

An important feature of analysis and evaluation internal environment is the possibility of direct influence on it by the company's management. Therefore, one of the goals of the SWOT method is to develop measures to further develop strengths and minimize the impact of weaknesses in the operation of the enterprise.

External environment, including SWOT opportunities and potential threats

Affect parameters external environment it is practically impossible for a business entity. However, a well-conducted analysis allows you to make the most of the company’s existing opportunities while minimizing the impact of existing threats and risks.

You are the head of a company, but do you know everything about it? Are you ready to voice a clear plan for further development? own business? Find it difficult to answer? Then you should definitely put into practice already proven marketing research. They have already helped millions of entrepreneurs like them find the right solution. One of the main technologies is considered SWOT analysis.

What it is?

The abbreviation SWOT is an acronym for the following English words:

• Strengths – strengths or advantages of the organization;
• Weaknesses - weak points or shortcomings;
• Opportunities - opportunities or external factors that, if properly applied, will create additional advantages for the company;
• Threats – threats or possible circumstances that could harm the company.

A standard SWOT analysis is precisely a comprehensive assessment of the company’s activities, and not only its strengths, but also its weaknesses. But in the terminology adopted in this analysis, they are called sides, respectively, strong and weak. An assessment is made not only of probable external threats, but also of favorable opportunities. In this case, the results obtained must be compared with the indicators of the most strategically important competing firms.

Conducting a SWOT analysis helps answer questions such as:

• Does the company fully use its personal strengths, as well as its distinctive features, in implementing its own strategy?
• Which of the company's weaknesses need to be adjusted accordingly?
• Which potential opportunities offer a real chance of success if all possible resources are deployed and the firm's skills are taken into account?
• What possible threats should a manager pay attention to, and what actions should they take?

Marketers recommend choosing the period for carrying out a SWOT analysis when the direction in which the future development of the business is planned is formulated, and the period for determining the list of goals and setting tasks.

Swot analysis matrix

During the analysis process, specially developed templates are used, which are tables called SWOT matrices. Which one will be used is a purely individual choice. It is worth noting that the results, regardless of the selected template, are completely identical.

Any swot analysis matrix filled out according to a specific pattern. The cells describing the strengths of the enterprise are filled in first. Next we move on to its weaknesses. These two columns help describe the company's microenvironment.

To display the macro environment, you will need to fill in the remaining two columns. In one of them, opportunities should be written down, that is, those probable benefits that the company will be able to obtain in the current market conditions if no significant changes occur. And the last column of the matrix records threats - those factors that can interfere with the development of the company’s strengths and the use of the opportunities provided.

Microenvironment

Strengths include those areas where a company has significantly succeeded and what sets it apart from its competitors. Here you should also describe your competitive advantages, but be objective. These cannot be simply unfounded allegations. They must be confirmed by certain indicators.

These advantages may well include:

• unique company resources;
• personnel with a high qualification level;
• quality products;
• brand popularity.

A company's weaknesses include factors that place it at a disadvantage compared to potential competitors. As an example of the weakness of an enterprise, one can point out a limited range of goods produced or services provided, a not very good reputation, low funding or a relatively low level of customer service.

Macro environment

As you remember, the macro environment in SWOT analysis is presented in the form of probable opportunities or potential threats.

Opportunities include the most favorable circumstances, through which the company receives additional advantages. It is opportunities that contribute to the development of the strengths of an enterprise.

Threats are probable events, in the event of which the enterprise may find itself in not entirely favorable conditions for further development. Examples of such events may be the emergence of new competing companies on the market, increases in tax rates, and changes in demand from buyers.

Additional materials

The swot analysis matrix for more complete and truthful filling will require the presence of additional information. Let's consider this point in more detail. All available data will be required in the following categories:

1. Management

All information related to the organization of the work of the entire company is collected here. These are the qualifications of the enterprise’s employees, connections that determine the level of interaction between all departments, etc.

1. Production

This category is rated production capacity, quality of existing equipment, degree of wear and tear. The quality of manufactured goods, the availability of patent or licensing documentation, if required, and the cost of manufactured goods are also considered. Additionally, the reliability of partners acting as suppliers, level of service, etc. are assessed.

1. Finance.

This is the most important category requiring detailed consideration. It is here that the clearest gradation of the strengths and weaknesses of the business in question is observed. These are the costs of the production process, the availability and speed of turnover of cash capital, the stability of the enterprise in financially and its profitability.

1. Innovation.

How often are customers provided with an updated list of products? What is the level of quality and how quickly does the return on capital investments occur? This subparagraph must contain answers to all questions asked.

1. Marketing

• consumer reactions to manufactured goods;
• awareness of your brand;
• the range of products presented by the enterprise;
• pricing policy;
• the effectiveness of advertising campaigns;
• additional services offered by the company.

Rules for performing SWOT analysis

In order to avoid possible mistakes in practice and get the maximum benefit from the marketing research, strict adherence to several rules is required.

As much as possible, try to narrow the scope of the activity in which the analysis will be carried out. If you perform this procedure simultaneously for all activities of the enterprise, the data obtained will be too general and absolutely useless from a practical point of view. Focusing the analytical process on a company's position in a specific market segment will help obtain more specific data.

As you complete the matrix columns in the macro and micro environments, be careful when drawing conclusions regarding the strengths/weaknesses and opportunities/threats of certain factors. Weak or strong qualities are represented by the internal characteristics of the company. Whereas the second pair characterize the situation in a given time period, and cannot be regulated by management.

High-quality analysis is possible only when all the data is completely objective. This strategic analysis should be carried out on the basis of the diverse information presented. The research cannot be entrusted to one specialist, since the information received may well be distorted by his personal subjective perception. In this marketing research it is necessary to take into account the point of view of each functional unit of the enterprise. All data entered into the SWOT matrix must be confirmed by existing facts or the results of previously conducted research activities.

The use of lengthy formulations or the possibility of its double interpretation is completely unacceptable. The more specifically a factor is formulated, the more clear its impact on the company’s activities as a whole will be in the future. And accordingly, the results obtained after completion of the analysis will have the greatest value.

Weaknesses of SWOT Analysis

SWOT analysis is just a simple tool with which information is structured. This marketing procedure does not provide any specific answers or clear recommendations. It only helps to more adequately assess the main factors and predict the occurrence of certain events with a certain degree of probability. Formulating any recommendations based on the data obtained - this procedure is already within the competence of the analyst.

In addition, the apparent simplicity of this strategic analysis very deceptive. The veracity of the result, and accordingly the development of further transformations, is highly dependent on the completeness and quality of the information provided. To truly obtain the most realistic data, it will either require the participation of an expert capable of assessing the current state and the likely path for further development of the market, or it will be necessary to conduct a very hard work to collect and then analyze the information received in order to achieve this understanding.

Errors that may be made when filling out a matrix table are not detected during the analysis process. Therefore, the addition of an extra factor or, on the contrary, the loss of an important one or other inaccuracies lead to an erroneous conclusion, and therefore incorrect development of a further strategy.

SWOT Analysis Example

The given analysis example is for demonstration purposes only. Here is the entire sequence of actions that will help you perform a SWOT analysis.

Determination of strengths/weaknesses (sides)

First of all, analyze everything possible options. Each of the areas must contain at least 3 parameters that helped in assessing the competitive capabilities of the business.

For example, let’s take a direction like “ appearance goods". To analyze it you will need to answer questions such as:

• to what extent is the appearance of the packaging better/worse than that of a competing company;
• the convenience of packaging is better/worse compared to a competing company;
• how much better/worse is the packaging design compared to a competing company, etc.

We check the importance of identified strengths/weaknesses

Not the entire list from the first paragraph will be needed to fill out the matrix. Now you should eliminate the non-essential items. To select the right parameters, you should evaluate the impact of each in terms of satisfaction potential clients, as well as the profit received.

The results of such a check will help eliminate parameters that play a minor role. The final microenvironment rating will be fully prepared.

Identifying likely growth paths

At this stage, you will need to write potential options that can . Two questions will help with this:

1. how a company can increase its sales level;
2. What are the possibilities for reducing production costs?

Compose full list opportunities that will help your business grow. As an example, the following options can be given:

• new sales territory;
• expansion of the range;
• influx of new consumers, etc.

Next, an assessment is made and opportunities that do not have a decisive impact on profits and customer satisfaction are eliminated. Having fully analyzed the entire list received, we cross out opportunities that do not have a strong impact on the profit received and customer satisfaction.

Identifying Potential Threats

This section should list potential threat options. For example, why customers may refuse to purchase a company’s product:

• changing your usual lifestyle;
• decrease in the level of income of the population;
• changed requirements for product quality, etc.

Then we exclude threats that do not threaten the development of the enterprise over the next 5 years.

Filling out the matrix

Now that all the data has been received, we fill out the standard template. In this case, the rating of all indicators is necessarily preserved. Next, based on the SWOT information, recommendations are made for the further development of the enterprise.

You can find detailed swot analysis, strategy and implementation methods using the example of a specific enterprise in this article:

You can also watch the compilation of swot analysis on video.

The name of the analysis of strengths, weaknesses, opportunities and threats - SWOT analysis, comes from the abbreviation of the words:

Strengths- strengths, strengths;

Weaknesses- weaknesses;

Opportunities- possibilities;

Treats- threats.

SWOT analysis is a fairly simple and popular technique that allows you to assess the consequences of the decision you make, when making which you are guided by knowledge and understanding of the surrounding situation. And it doesn’t matter whether this decision lies in the field of marketing, choosing a company development strategy, or any of your decisions related to current activities, not even related to business.

So, using the WSOT method, you can analyze whether you (or your friend) should wear that blue dress that she bought in a boutique last month. When choosing a profession, or this or that company for employment, we evaluate our strengths and weaknesses, the opportunities offered in a new place, as well as the threats of changing jobs. As for marketing, in fact, every marketer involved in making strategic decisions owns this technique, to one degree or another.

Intuitively, we use SWOT analysis quite often, but few people independently bring such an assessment to its logical conclusion, stopping at a fundamental understanding of the situation and without delving into the analysis of marketing details.

The following are two of the simplest methods, the use of which will allow a novice entrepreneur to independently conduct a SWOT analysis. There are in-depth options for SWOT analysis. Their use requires a more careful approach, preparation and elaboration of details.

SWOT analysis methodology

In principle, everything is simple, the analysis is carried out according to the following scheme:

1. Expert formulation of your strengths and weaknesses- these are internal factors. Their basis is only you. If we are talking about a company, then these are the strengths and weaknesses that are inherent in the company. For an expert description of this, it is enough to use the results of an express survey of enterprise management.

Strengths and weaknesses must be assessed according to at least 3 vectors:

• Management (condition, quality, motivation, qualifications)
• Business processes
• Finance

To analyze internal factors, I still suggest using a different model. For
When conducting an analysis of internal factors, we should pay attention to compliance with:

• marketing activities of the company to its external environment;
• the company's sales system and its adequacy to the marketing channel;
• organizations production processes and adequacy of products to the market (for manufacturing companies);
• organizations logistics processes and adequacy of their marketing channel;
• financial condition the company and its tasks;
• administrative system and quality of business process administration;
• management system, human resources management

2. We describe opportunities and threats- which are external factors, based on the situation outside the company, the company’s business environment.

There is no need to invent threats, they are always the same. It is enough to assess the typical potential threats for your company (for you).

There are threats:

• social;
• economic;
• technological;
• political;
• environmental;
• competition.

3. We rank the strengths and weaknesses, opportunities and threats according to the degree of influence on the company, throwing out the far-fetched.

4. We put everything into the SWOT matrix (in a table).

5. Analyze the effect of factors

6. Having finished with the description and marketing analysis,define a strategy, based on the results of the description above, using the strengths, and compensating for the weaknesses of your (company).

SWOT Matrix

All data is summarized in one table consisting of 4 main fields: strength, weakness,
opportunities and threats. Such a table is also called a SWOT analysis matrix.

Analyzing the effect of factors

Actually, what we have compiled above is not yet a SWOT analysis, but only a form (matrix) for a convenient description of the sides, opportunities and threats. Analysis is a conclusion about how much your “strengths” will help realize the company’s capabilities in achieving certain planned goals.

Let’s try to rearrange what has been summarized in the table and answer the questions:

SWOT Analysis Strategies Matrix

Next comes the most interesting part, the reason why everything was started. Based on the results of the analysis, we use the results of the SWOT analysis to develop certain strategy vectors along which we will work. The company, as a pravvilo, works in several directions (vectors) at once:

• We realize our strengths;
• We correct the company’s weaknesses and use its strengths;
• We take measures to compensate for threats.

Analyzing the data in the table, we draw up a matrix of necessary actions to correct the company’s weaknesses, including at the expense of the strengths. We bring all the data into one table (matrix) consisting of 4 main fields: strength, weakness, opportunities and threats. This table is called: “SWOT Analysis Strategies Matrix”.

Analyzing the data located in the table, a list is compiled possible actions(marketing plan) to neutralize the company’s weaknesses, including at the expense of its strengths. Also, possible options for the company’s development when external factors change, ways to use strengths to reduce risks, etc. are being developed.