Swot analysis allows. SWOT analysis. Famous brand

  • 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 the direction of development of an existing business is a difficult task. The correct application of SWOT analysis, which allows for an objective and comprehensive assessment of the enterprise, helps to correctly assess its prospects and increase the likelihood of achieving success.

The success of a business largely depends on making the right decisions in a timely manner. A prerequisite for this is to obtain comprehensive information both about your own enterprise and about 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.

The first letters of the English words denoting each of the listed terms give 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.

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

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

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 in question is usually used in combination with others, for example, the Porter model, various marketing tools or PEST.
  • Development of a step-by-step action plan aimed at implementing the chosen company development strategy.
  • Formation of the concept, objectives and main goals of the advertising campaign.
  • Conducting competitive intelligence in order to compare a product planned for release with similar products already on the market, etc.

A characteristic feature of SWOT analysis is 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.

How to conduct a competitive analysis: step-by-step algorithm

It’s not enough to follow competitors’ accounts on social networks and subscribe to newsletters. You need a strategy that will allow you to monitor your competitors on an ongoing basis and receive prompt information about changes in the market. Therefore, the electronic magazine “Commercial Director” has compiled a detailed algorithm for competent analysis of competitors and assessment of their activities.

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 for the practical application of the method in question are as follows:

  • Selecting a specific area of ​​research. 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 SWOT table. 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 factor of subjectivity. Despite the absence of a large number of 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 formulations 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 a company or an individual product. However, there are some general principles for studying the object of analysis, which are summarized in the table.

Internal environment

Strengths

Weak sides

Experience and duration of work in a specific market segment

Lack or shortage of own working capital

Product quality

Cost optimization and low production costs

Low qualifications and lack of cohesion of the workforce

High level of consumer confidence

Lack of clearly defined business objectives and goals, as well as a strategy for its further development

Detailed and streamlined business model

The presence of internal conflicts in the team between individual employees or departments of the company

A permanent staff of workers who are a close-knit team

Lack or low effectiveness of employee motivation and incentive programs

Large range of manufactured products

Lack of warranty for the goods supplied or work performed

Availability of competent and well-trained personnel

A small range of services provided or goods produced

Own channels of distribution and sale of goods

Diverse and high-quality services offered to clients

An efficient marketing department

An important feature of the analysis and assessment of the 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

It is almost impossible for a business entity to influence the parameters of the external environment. 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.

External environment

Possibilities

Threats

Development and launch of a new product or service

The emergence of new products on the market that can displace the company’s products

Introduction of advanced technologies and use of modern equipment

Increasing the level of competition and the number of market participants

The emergence of new needs among potential consumers who are the target audience

Disruptions in the work of suppliers and contractors of the enterprise

SWOT analysis: pros and cons of practical use

Like any analytical tool, the SWOT method has both obvious advantages and certain disadvantages.

The advantages of using it include the following:

  • the ability to structure existing information about the company and its external environment;
  • simplicity of the procedure and taking into account the individual characteristics of the business and a specific enterprise;
  • the use of a large number of qualitative factors with a small number of quantitative ones (which does not require a serious computational and mathematical base, making the method publicly available);
  • the presence of a serious array of information that acts as a source for SWOT analysis.

The main disadvantages of the analysis method under consideration include the lack of a dynamic component and consideration of the time factor, as well as significant subjectivity of most of the factors under consideration. In addition, the small role of quantitative parameters and estimates significantly reduces the information content of the analysis results.

Life forces us to make decisions every day. And every decision we make, one way or another, affects our future. Our fate for years and even decades depends on some decisions. To make any important decision, you need a thorough analysis of what is happening, this is necessary both in business and in everyday life. Qualitative analysis is a very difficult matter. And despite the fact that absolutely every person needs to be able to do it, this management function is not taught in school. Today we will talk about one of the most common methods of analysis - the SWOT method.

What is SWOT analysis

SWOT analysis is a method of primary assessment of the current situation based on considering it from four sides:

  • Strengths - strengths;
  • Weaknesses - weaknesses;
  • Opportunities - opportunities;
  • Threats – threats;

Strengths and weaknesses are your internal environment, what you already have at the current moment in time. Opportunities and threats are environmental factors, they may or may not happen, it also depends on your actions and decisions.

The acronym SWOT was first used at Harvard in 1963 at a conference on business policy by Professor Kenneth Andrews. In 1965, SWOT analysis was proposed to develop a company's behavior strategy.

SWOT analysis helps to create a structured description of a specific situation, based on this description, conclusions can be drawn. This allows you to make correct and informed decisions. SWOT analysis plays a significant role in business and should be mastered by everyone involved in personnel management and marketing.

Rules for conducting SWOT analysis

Before you begin drawing up a SWOT analysis, you need to understand a number of rules.

  1. Need to choose the most specific area of ​​research. If you choose an area that is too broad, the conclusions will be unspecific and less applicable.
  2. Clear separation of elementsSWOT. There is no need to confuse strengths and opportunities. Strengths and weaknesses are the internal characteristics of an organization that are within its control. Opportunities and threats are related to the external environment and are not directly subject to the influence of the organization; the organization can only change its approach and adapt to them.
  3. Avoid subjectivity. It would be naive to rely on your opinion if the market does not agree with it. You may think your product is unique, but it's worth asking consumers about this first. Without them, your personal opinion has no meaning.
  4. Try use the opinions of as many people as possible. The larger the sample, the more accurate the research. Remember about?
  5. The most specific and precise formulations. I often ask my subordinates: “What should you do to earn more?” They almost always tell me that I need to work harder. This is not a specific formulation; it is not clear what specific actions a person should perform at what time.

Using these simple rules, you can proceed to compiling a SWOT matrix.

SWOT matrix

SWOT analysis is usually used by drawing a table, it is often called a SWOT matrix. This method of use does not depend on the global nature of the problem being solved. It doesn’t matter whether you’re deciding who to spend the weekend with or what business to invest your millions in, the essence and appearance of a SWOT analysis will remain the same. The SWOT matrix looks something like this:

The first line and first column are indicated simply for ease of understanding; they are not necessary to draw if you understand the SWOT analysis method well.

How to use SWOT analysis

So, you are faced with a certain task and you need to understand how to solve it. First of all, you need to draw a SWOT matrix. You can do this by dividing a sheet of paper into four parts. In each part you need to write as much available information as possible. It is advisable to write the more significant factors first, then move on to the less significant ones.

We analyze strengths and weaknesses

It is not surprising, but it is with the description of strengths that the most problems arise for people who take up SWOT analysis for the first time. In general, you can ask your employees, friends and acquaintances for help in assessing, but it is better to learn how to analyze yourself. Strengths and weaknesses are assessed using the same parameters.

In business, strengths are assessed primarily based on the following parameters:

  • Management and human resources in general. First of all, the competence and experience of the staff;
  • Having a clear system. Business processes and employee understanding of what to do;
  • Finance and access to money;
  • Clearly. This is a very important success factor; the lack of a sales department is a serious obstacle and a sink for other resources;
  • Reasonable marketing policy;
  • Availability of production costs.

When conducting a SWOT analysis of your personality, you can rely on the following criteria:

  • Education and knowledge;
  • Experience and your skills;
  • Social connections, useful contacts and other opportunities to use administrative resources;
  • Recognition and authority;
  • Availability of material resources;

When analyzing your strengths, you should focus on what you like to do and what you are good at. As a rule, what we don’t like turns out worse for us.

Analysis of opportunities and threats

Opportunities and threats are created by changes in the environment and those changes that you can make personally. It is worth noting that to analyze the external situation on the market, and even more so to predict the future market, you need to have serious qualifications. It is very difficult to predict what will happen and it is worth relying primarily on current facts and trends. At the same time, when making long-term planning, it is necessary to take into account the most pessimistic scenario for the development of the situation.

Opportunities and threats in business are primarily assessed according to the following parameters:

  1. Market trends. Increase or decrease in demand.
  2. Economic situation in the country. In years of economic growth, business, other things being equal, will grow in proportion to the growth of the economy, and vice versa.
  3. Competition, the absence of competitors today does not guarantee their absence tomorrow. The arrival of a major player in the market can turn the industry upside down.
  4. Infrastructure changes. Major changes to infrastructure can result in both gains and losses.
  5. Legislation and political trends. Probably, in 2003, no one imagined that within 5 years all casinos would close.
  6. Technological revolutions. Progress inevitably destroys entire industries while creating new ones.

Every field of business has its own experts and professionals; to compile a high-quality SWOT matrix, you can turn to them for advice and expert opinion.

SWOT analysis methodology

So, we have a completed SWOT matrix that contains: strengths and weaknesses, as well as opportunities and threats. Based on this matrix, you need to work according to it. To do this, perform the following steps:

  1. It is necessary to rank all factors according to the degree of influence;
  2. All far-fetched and unimportant factors must be excluded;
  3. We analyze how your strengths can help you avoid threats and achieve opportunities;
  4. Let's see what impact your weaknesses can have on opportunities and threats;
  5. How strengths can help improve weaknesses;
  6. How can we reduce threats;

Based on the work done, you draw up the main vectors of development. SWOT analysis is primarily a tool for descriptive assessment of the situation. It does not analyze large amounts of analytics and does not compare indicators over past years. SWOT does not measure quantitatively the parameters. And that is why the SWOT method will always be a rather subjective analysis tool.

Application of SWOT analysis

The simplicity of SWOT analysis makes this tool very versatile; as we wrote above, it can be used both in life and in business. SWOT analysis is used both separately and in combination with other analysis and planning tools. SWOT analysis is most widely used in management, primarily for strategic planning of an organization's activities.

SWOT self-analysis

Separately, I would like to talk about the use of the SWOT analysis method to determine priorities in personal development. You can use this tool to determine goals both at work, for example, what area of ​​activity you should pursue, and in personal relationships.

I strongly recommend that middle and senior managers ask their subordinates to do a personal SWOT analysis at least once a year. It is also an excellent tool for determining management abilities when hiring a new employee. I first read this idea in Igor Mann’s book Number 1. Mann recommends giving SWOT to everyone who came for an interview.

In a competitive environment, unstable markets and a rapidly changing marketing environment, an entrepreneur needs to make the right decisions. He must clearly understand what stage of development his business is at, what competitive advantages he has, what he needs to be wary of, what disadvantages negatively affect the development of his business, and so on. Marketing uses many methods and technologies, one of which is SWOT analysis, a simple and effective tool for making basic management decisions.

Why is SWOT analysis necessary?

This technology helps to analyze a problem, product, business situation, everything that can be analyzed as an object. It becomes clear where the company should move in its policy, what actions the manager needs to plan, and answers are received about the effectiveness or ineffectiveness of the company’s actions. The final result of a SWOT analysis is the development of a strategy for the further development of the organization (project), or correction of its course, taking into account the existing market reality. The recommended interval for conducting analytics is once a quarter.

Pros and cons of analysis

The main advantage of this tool is its simplicity. There is no need to have special knowledge or make complex marketing calculations. To carry out a SWOT analysis, draw the right conclusions, and plan relevant activities, analysts only need to have minimal awareness of the company’s internal and external business space.

The undeniable benefit of the method is its wide application, the prospect of its use not only in the economic or marketing sphere. Where it is necessary to assess the situation with conclusions and decisions, this tool will help. This applies to all aspects of human life and activity.

The third undoubted advantage is that this analysis allows you to collect an impressive information base regarding the issue under consideration.

Accordingly, the more information, the more versatile it is possible to look at the problem, consider it from different angles, find more solutions, ways of implementation. In the process of collecting information, a variety of factors are revealed that influence the enterprise; therefore, it is possible to collect completely different analytical material and generalize it according to certain criteria, expanding the variability of decision-making methods.

The disadvantages of the analysis include the relevance of the results for a specific date or period of time. As a result of the analysis, the balance of power on the problem at the time of the study is shown, and the situation on the market often changes at lightning speed. Decisions based on the results of the analysis require prompt implementation, since tomorrow they may become irrelevant.

From the point of view of quantitative indicators and evaluation criteria, the method is not informative enough. It only sets a vector, showing a fairly general picture of the problem (probability), without allowing a quantitative assessment and not allowing any qualitative comparisons to be made.

And the final disadvantage of this analysis: analysts filling out the SWOT matrix can also look at the source data from different angles, as a result of which the objectivity of the final analysis data may disappear. It is recommended to involve more than one analyst, but to work as a team to comprehensively cover the source data for analysis. A team of 4-8 analysts and a SWOT moderator practice. There are also decision makers and persons representing all divisions involved in the general economic activities of the company. Complex analytics usually takes from 8 to 32 working hours, not counting the preparation for the event itself.

Structure and explanation of the abbreviation

The name is an abbreviation of capital letters from the names of four English words:

S - strength(from English. Strength, power) - significant qualities of the Company, internal analyzed environment),
W - weakness(from English Weakness) - insufficient qualities of the Company, internal analyzed environment. Both of these factors are carried out in relation to the Consumer.

O - opportunities(from English Perspective) - prospects for the Company, external analyzed environment,
T - threats(from English Threat) - dangers for the Company, external analyzed environment. These factors are considered in relation to representatives of the competitive market environment.

Types of analytical matrices

Brief SWOT (four-field)

A four-field SWOT analysis records the state of affairs, the situation in the external and internal environment of the company. The analytical group must classify into four sectors all the factors that reflect the current situation of the company and reflect its capabilities.

FORCE(significant qualities of a company that are superior to other companies in the same industry). The company can influence these internal factors.

WEAKNESS(insufficient qualities of the company that weaken its position in the industry compared to other companies). The company can influence these internal factors.

PERSPECTIVE(probabilities and market prospects for the company, unpredictable positive probabilities). The company cannot influence these external factors.

DANGER(certain market dangers, unpredictable negative probabilities). The company cannot influence these external factors.

If analysts are not ready to classify them into four cells, all factors (even minor ones) are classified into two:

STRENGTH AND WEAKNESS

PROSPECTS AND DANGERS

Next, the data is redistributed into four fields and, in each group, about 5-8 key factors are identified. To determine priorities by factors, each participant is provided with virtual 20-32 points, which must be awarded 1 point for each field. Thus, the data array is compressed to the required number of factors in four fields.

The classic (nine-field) matrix helps develop a strategy based on the data of a four-field matrix. Data from the four-field matrix is ​​transferred to the fields STRENGTH, WEAKNESS, PROSPECTS and DANGERS. In this way, cross connections of the type “STRENGTH and PROSPECTS”, “STRENGTH and DANGERS”, “WEAKNESS AND PERSPECTIVE”, “WEAKNESS and DANGERS” are formed. These are the vectors for developing strategies:

  1. “STRENGTH and PROSPECTS” - development of a company’s GROWTH strategy;
  2. “POWER and DANGERS” - development of a company’s PROTECTION strategy;
  3. “WEAKNESS and PROSPECTS” - development of a company IMPROVEMENT strategy;
  4. “WEAKNESSES AND DANGERS” - developing a strategy to MINIMIZE the company’s PROBLEMS.

PROSPECTS:

DANGERS:

FORCE:

Effective use of the organization's capabilities, its strengths, to maximize the positive opportunities provided by the market

Effectively using the organization's strengths to offset the negative aspects emanating from the market

WEAKNESS:

Eliminating the weaknesses of the organization through the opportunities provided by the market

Nullifying weaknesses and minimizing threats posed by the market

Examples of SWOT analysis

Business (using the example of a car service)

  1. Four-field matrix

Internal factors

External factors

FORCE:

PERSPECTIVE:

  • Market growth

WEAKNESS:

  • Moderate pricing policy
  • Tool shortage

DANGER:
  1. Nine-field matrix

PROSPECTS:

  1. Market growth
  2. Entry into the market of new technologies and suppliers
  3. Fast-growing online market for service tools and services
  4. Bankruptcy and disappearance of competing firms from the market
  5. Change for the better in the purchasing power of the population

DANGERS:

  1. Decreasing relevance of car service services (do-it-yourself repairs, “garage” craftsmen)
  2. The emergence of new car service competitors
  3. Consequences of foreign state policy (sanctions, embargo)
  4. Possible negative dynamics regarding tax legislation
  5. Declining purchasing power of the population

FORCE:

  1. Extensive information coverage around the city
  2. Well-organized work processes
  3. Managers and middle management are competent, young people, energetic, ambitious;
  4. Personnel participate in the implementation of fundamental decisions
  5. Sustained positive popularity among clients

Effective use of the organization's capabilities, its strengths, to maximize the positive opportunities provided by the market

  • Increasing the volume of information “pumping” for brand recognition and intercepting clients of competitors who are closing their business
  • Make speed of service your “trick”, optimize processes
  • Implementation of the “Internet Workshop” project
  • And so on…

Effectively using the organization's strengths to offset the negative aspects emanating from the market

  • Promotions to attract and retain customers, development of a bonus program
  • Search for consumables, the price of which is less tied to currency (domestic?)
  • “Brainstorming” (all staff participates) on creating value for the client and formulating the company’s mission
  • And so on…

WEAKNESS:

  1. Dependence on auto parts sellers
  2. Moderate pricing policy
  3. Insufficient information coverage in the regions
  4. There is no supervision over the implementation of management directives
  5. Severely worn equipment
  6. Tool shortage

Eliminating the weaknesses of the organization through the opportunities provided by the market

  • Active search for new suppliers, reduction of purchase price, increase in deferment
  • Reasonably raise the price, increasing profitability
  • Development and implementation of a marketing plan, creation, protection and development of a budget for brand promotion in the regions
  • And so on…

Nullifying weaknesses and minimizing threats posed by the market

  • While the economy is on the rise, update the tool fleet
  • Promotions in the regions
  • Launch of the “Social Auto Repair” project
  • And so on…

Product (using the example of brick)

  1. Four-field matrix

FORCE:

  • Availability of local raw materials
  • Environmental friendliness of the product
  • Strength
  • Life time
  • Availability
  • Other

PERSPECTIVE:

  • Other

WEAKNESS:

  • Price
  • Other

DANGER:

  • Other
  1. Nine-field matrix

PROSPECTS:

  1. Increasing the volume of construction of brick buildings (including low-rise buildings)
  2. Growing consumer demand for a variety of brick products
  3. Banking policies (low-cost lending, construction subsidies)
  4. Other

DANGER:

  1. Entry of a new manufacturer into the market
  2. Focus on new wall materials (sibit)
  3. Declining standard of living of the population
  4. Increase in tariffs for electricity, fuel
  5. Other

FORCE:

  1. Recognized leader in the wall materials market
  2. Availability of local raw materials
  3. Environmental friendliness of the product
  4. Performance
  5. Practically unchanged market of manufacturers and suppliers
  6. Other
  • Promotion of the product among designers and architects;
  • Development of loans for the purchase of bricks and subsidies for construction using bricks
  • Production of clinker bricks at a local factory
  • Thematic propaganda in mass media with an emphasis on family values, longevity and health
  • And so on…
  • Local manufacturer support
  • Introduction of energy-saving technologies in production
  • And so on…

WEAKNESS:

  1. Price
  2. Other
  • Production of “halves” for cladding buildings (Reduces the cost of cladding and the weight of masonry)
  • And so on…
  • Readiness of instruments for a price fight with a new manufacturer
  • “Heavier means more reliable” (comparison of properties with sibit)
  • And so on…

Entrepreneur

  1. Four-field matrix

Internal factors

External factors

FORCE:

  • High qualification
  • Solid experience
  • Connections
  • Health

PERSPECTIVE:

  • Developing connections

WEAKNESS:

  • Lack of funds
  • Other

DANGER:

  • Health problems, death
  • Financial and credit system
  1. Nine-field matrix

PROSPECTS:

  1. Advanced training, self-development
  2. Developing connections
  3. State support for entrepreneurship
  4. Effective investments in your own business

DANGER:

  1. Health problems, death
  2. Negative changes in legislation
  3. Financial and credit system
  4. Monopoly of major industry players

FORCE:

  1. Business energy, entrepreneurship
  2. Erudition, exceptional competencies
  3. High qualification
  4. Solid experience
  5. Connections
  6. Health
  • Courses to improve qualifications and increase management competencies;
  • Starting your own business
  • Membership in the Union of Industrialists and Entrepreneurs
  • Sports, oriental practices (yoga, breathing exercises, etc.)
  • Legislative awareness, timely consultations within the framework of changes in legislation
  • Minimum attraction of loans, activities using own working capital
  • And so on…

WEAKNESS:

  1. Lack of funds
  2. Lack of experience, lack of managerial talent and skill;
  • Thoughtful lending;
  • Trainings, seminars - gaining experience and competencies
  • And so on…
  • Save for the opportunity to take care of your health
  • Save for an educational seminar (for example, “How to resist network monopolists”
  • And so on…

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

First, let's look at what a SWOT analysis is (I apologize in advance to those for whom this is unnecessary). SWOT analysis is a tool for planning and comparing four business elements. These elements are: Strengths, Weaknesses, Opportunities, and Threats. A properly done SWOT analysis provides an entrepreneur with a huge amount of useful information necessary to make the right business decisions.

Learning to do swot analysis

SWOT analysis - 4-step instructions

For greater clarity, we will divide the SWOT analysis process into steps, each of which is represented by several questions. Answering these questions is, in essence, the process of conducting a SWOT analysis. So.

Step 1 — Scanning the business environment

In this step, by looking at our business environment, we must identify the factors that influence or may influence 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 affect (or may affect) my business?

4. What economic factors affect (or may affect) my business?

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

6. What social factors influence (or may influence) my business?

7. What technological factors affect (or may affect) my business?

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

9. What market factors influence (or may influence) my business?

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

10. Does (or can it influence) the competition factor affect my business?

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

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

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

14. Does the employee factor affect (or can it affect) my business?

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

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

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

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

Answers to questions 10 to 18 will give you information about the overall impact of your business's entry into the marketplace. The list may not be exhaustive; a lot 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. Next, you should analyze them and draw the right conclusions for yourself. In this regard, we move on 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 guessed, in a few questions. Here they are:

19. Which legal factors could be a threat to our business and which could be an opportunity?

20. Which political factors could be a threat to our business and which could be an opportunity?

From 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 of rational decisions in almost any area: both in business when developing a company 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 a business and the prospects for its development, identifying four key aspects: Strengths, Weaknesses, Opportunities, and 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 company cannot directly influence.
The method of conducting SWOT analysis allows you to describe the situation clearly and structuredly, to draw a conclusion about whether the company is developing in the right direction, what risks should be protected from and how exactly to do this, what is the potential of the enterprise.

The SWOT analysis method is based on four main questions:

  1. What can a businessman (organization) do?
  2. What would he like to do?
  3. What is even possible in the current conditions?
  4. What actions does its environment – ​​clientele, partners, contractors – expect from the company?

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 or compensated;
  • prospects, open paths for the development of the company;
  • dangers and ways to protect yourself from them.

Why do you need the SWOT analysis method?

SWOT analysis is a simple and universal method, widely used in business and beyond. In business, when planning and developing a strategy, it can be used either separately or in conjunction with other marketing tools, which makes it very convenient for company managers and private entrepreneurs.


Outside of business, the SWOT analysis method allows you to identify priority areas of effort (this applies to both professional and personal development), find your true life goals and priorities in work activities and relationships.
In relation to business, SWOT analysis is used to:

  • collecting, summarizing and analyzing information about competitors using Porter models, PEST and other marketing methods;
  • creating a step-by-step plan for implementing the business strategy, working out its main directions and appointing persons responsible for implementation;
  • competitive intelligence (searching for the strengths and weaknesses of competitors) to form an effective development strategy.

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

Types of SWOT analysis method

  1. Express version of SWOT analysis. It occurs most often and is used to detect the main strengths of a company and its vulnerabilities. External threats and opportunities are also identified. This type of method is the easiest to use and gives a clear result.
  2. 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. A summary SWOT analysis is good because it allows you to quantify factors that are identified by other methods included in the strategic analysis tools, and formulate a strategy and action plan aimed at achieving the main goals of the company.
  3. A mixed 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, the analysis of these types does not provide a quantitative assessment of certain indicators. Thanks to the summary SWOT, you can deeply explore the data obtained and come to an accurate result.

SWOT analysis method as an example

The main matrix of SWOT analysis is as follows:


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


Note that if the target audience is, for example, schoolchildren buying pies for themselves (and not grandma-traders), then the SWOT analysis needs to be carried out again, since the source data has changed.

Project analysis using the SWOT method

First of all, decide what goals you are going to achieve through the method, what tasks are facing you. If the project is devoid of goals and is vague, the SWOT analysis will fail: there will simply be nowhere to get the source data.
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 in what way? How good an entrepreneur (or leader) are you? What resources and assets are available to you? What do you manage to 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 under consideration. What factors hinder the solution of current problems? What business skills do you personally lack and how can you “upgrade” them? What is the main vulnerability of your company and you personally as a person and leader? What factors should be avoided? What can prevent you from taking advantage of opportunities and advantages to achieve your goals?
The next stage of the SWOT analysis is to compile a list of 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, means, methods and advantages can be applied to make your project unique and in demand.
After this, proceed to a description of existing external dangers and threats. Which of these factors are preventing or could prevent you from achieving your intended result? How many of your competitors, enemies, ill-wishers are there that can harm your business and prevent it from developing? In the SWOT analysis method, threats and opportunities always relate to the external environment, while strengths and weaknesses always relate to the project itself.
When all the lists have been compiled, begin to form conclusions and conclusions. They must provide answers to a number of important questions about how to competently use their strengths, 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 studying these four groups of factors is not the main part of the SWOT analysis method. All the most important things happen later, when the data has already been collected and structured: finding ways to turn problems into advantages, turn weaknesses into strengths, and make external threats serve to benefit 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.

Rules of the SWOT analysis method

SWOT analysis seems to be a simple, even primitive method, but in practice, constructing 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.
Therefore, the practical application of SWOT analysis requires compliance with some important rules:

  1. Limit the scope of your research in each quadrant. Analysis of the business as a whole will turn out to be too divorced from practice and, as a result, useless, because in order to develop a strategy, information on very specific aspects of the functioning of the enterprise is required. It is worth focusing on each of them and subjecting them to SWOT analysis.
  2. Decide on the wording: what you will consider a strength, what a weakness, and what you will classify as opportunities and risks. Internal factors - the strengths and weaknesses of the company - can be controlled directly, but it is impossible to influence external ones. Therefore, these areas - inside and outside the business - must be clearly separated, and, for example, internal problems should not be classified as threats, and opportunities should not be classified as strengths.
  3. When analyzing strengths and weaknesses, look at your project from the outside, like a client or competitor. If something is an advantage for the consumer and motivates him to buy the company's products, then this is a strength.

If some services or product 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 manager-analyst’s ideas about what is right. When the list of advantages and disadvantages grows too long, it is useful to rank them by importance (from the consumer's perspective).

  1. Use diverse but reliable information sources. Try to be objective when conducting a SWOT analysis. The best option is to first carry out extensive market research and then use this method, but this is not always available. However, you can carry out monitoring on your own (using questionnaires, analyzing publications about the company in the media, etc.).

This task should be carried out by several people, since each person's personal preferences significantly limit the scope of the parameters considered. During the collection and analysis of data, it is advisable to exchange ideas and guesses so that the work is group work.

  1. Formulate your thoughts as clearly and specifically as possible, avoid ambiguity and unnecessary phrases. The quality of 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: it can hide new machines in the workshops and new technologies for communicating with suppliers.


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

  • identifying the dynamics of the enterprise’s position in the market environment, among competing firms;
  • taking into account the results of a more in-depth analysis of the company’s activities and building strategic plans in accordance with them;
  • creating several market behavior strategies (for the most likely scenarios).

These could be options such as eliminating threats (third and fourth quadrants of the SWOT matrix), continuing the current course (without changes, since everything is fine), optimizing the use of resources and developing reserves (first and second quadrants).