Starting from the 80 of the last century, SWOT analysis has been actively and successfully used as one of the most important management tools, and over all these years the technique has not lost its relevance. SWOT analysis is a technique that allows you to analyze internal resources and the external environment, assess risks, as well as current and future competitiveness of a product or service.
I see the goal
A group of goods or an entire company, a project or a country, or even an individual person can also equally act as objects of swat analysis. Swot analysis is also practiced for ... competitors, which allows you to be prepared in advance for their tactical and strategic actions.
Based on the SWOT analysis, it is possible to create a competitive advantage of the product, develop an action plan for the development of the company, the growth of its sales and profits. Swot analysis is the first step towards developing a successful development strategy.
It is usually recommended to conduct a Swat analysis at least 1 once a year, this allows you to reduce the number of risks during the formation of budgets and strategic planning.
How to decrypt this abbreviation and what is hidden behind it? Strength = strengths, or rather, the benefits of your product or company as a whole. Weaknesses = weaknesses, or rather disadvantages. Opportunities = opportunities. Threats = threats. Therefore, in Russia it is sometimes referred to as SPL analysis (strengths, weaknesses (sides), opportunities, threats).
Let's talk more about each of these concepts.
The essence of the swat analysis is that you need to determine and evaluate all the pros and cons of a product (company, person, country) from the point of view of its internal environment (what it is) and from the point of view of the external environment, its environment. Strengths and weaknesses in swat analysis are what we can control, these are factors of the internal environment, and threats and opportunities are factors of the external environment, that is, that which we cannot control. But we are in a position to operate with these opportunities and avoid threats with minimal losses.
Strengths product or service - what you are better than competitors, where your product is more stable, where you have clear advantages. It is obvious that it is the strengths that are responsible for the increase in sales, the growth of profits and the company's market share, etc. ZLuck: Strengthen strengths, actively use them in communication with the consumer. examples: high product quality, company fame, innovative technologies, low cost, close-knit, experienced and motivated staff, customer satisfaction, quality equipment, a wide range, fast order processing, extensive distribution channels, etc.
Weak sides - these are the shortcomings of a product or service. That is, where you are worse than your competitors, for example, why your product is not bought or bought less. Accordingly, it is these shortcomings that "pull back" and affect the losses not only today, but also in the future. ZLuck: constantly fix areas where the company or product is not strong enough, develop and implement programs involving the company's strengths to minimize risks.
examples: lack of working capital, low reputation, narrow product line, poor distribution, lack of strategy, low motivation or competence of employees, lack of after-sales service, etc.
Capabilities - these are favorable factors of the external environment, that is, the chances that are given to you from the outside, what allows you to increase sales and profits. ZLuck: analyze the market, develop and implement plans for using all the features.
examples: new technologies, the formation of UTP, the increase in advertising in Central Asia, the capture of related segments, demand trends = new fashion, needs, new types of products, state support, public relations, etc.
Threatening - these are negative factors of the external environment, i.e. what the world around you threatens, what can reduce sales, reduce the company's profits. ZLuck: assess threats and, if possible, take them into account in strategic planning, as well as in terms of the likelihood of their occurrence in the near future. Develop practical solutions to minimize them.
examples: new market players, fake products, new legislation, lobbying of competitors, seasonal downturns, economic crises, etc.
We collect and sort information
First, a table is created in which all the factors are entered. (The table is a rectangle divided by the 4 of the rectangle, and it is advisable to enter the factors in the order of priority: from less important to more influential). First of all, state what exactly you want to analyze. The object of analysis must be specific (market, product, service, company, store). Start embracing the immense, and the analysis simply loses its meaning. It is necessary to collect information in the cells of your Swot table as objectively as possible, which only benefits further planning. It is advisable to involve outside experts in narrow fields, as well as people interested in making decisions. Remember that the same item can be both a strength and a weakness. Choose what is most important in it. And another important point: more specifics! Avoid vague wording and downplaying internal flaws. Don't write that employees are highly motivated. Better to say, salespeople have weekly sales bonuses, which means they are highly motivated. Or, for example, underestimating the motivation or loyalty of the staff as well as the quality of the seams in your shoes can fatally affect your business prospects.
Шаг первый. Based analysis of internal factors Strengths and weaknesses of the goods (services, companies, projects, etc.) are determined. Evaluate the following options in terms of disadvantages and advantages:
* packaging and appearance of the goods
* product properties
* brand image, its reputation
* customer loyalty to the brand
* price * breadth of assortment
* cost price
* representation (calculation)
* development investment
* company flexibility, flexibility
You can also create your own list of parameters by adding the necessary and removing unnecessary ones (for example, the location of the office or store, the ability to choose ...)
Шаг второй. Based analysis of external factors threats and opportunities are identified. Rate by the following parameters:
* New markets and entry barriers
* access to CA and change in its behavior, habits, quantity
* product update technology
* a variety of advertising methods
* state of the economy
* leaving / appearance of large players, competitors
* change of law
* cost-price ratio.
Add specifics: for example, opportunities - expanding the geography of sales, threats - the transition of the target audience to a cheaper product.
Step three. We review all items listed in the table, remove all unnecessary, leaving only priority. We specify and remove repetitions. For example, if in Strengths you entered factors that do not affect profit and customer experience, do not create a difference from competitors, they are superfluous.
Swot basedmatrix conclusions are drawn about the necessary actions with priorities and deadlines.
How swot matrix works
Actions SO = Growth Strategies
The main challenge is to determine how to maximize the strengths of the product when each opportunity arises. Otherwise, how to throw all the available internal advantages of the product for the implementation of the emerging opportunities from the outside.
WO Actions = Security Strategies
The main task is to determine which of the weaknesses to overcome (and how) to maximize the opportunity presented. Simply put - to protect an opportunity that has arisen in the external environment from the influence of internal shortcomings (product or company)
Actions ST = Security Strategies
The main task is to determine what benefits and how can help in the fight against threats, in minimizing risks. Otherwise, use the strengths of the product in the fight against threats from the outside.
WT Actions = Security Strategies
The main task is to determine which internal weaknesses of the product can increase the threat from the outside. Calculate how to reduce the deficiency to reduce the risk of the threat.
A good example
Let's consider the swat analysis on the example of the retail network of LLC "BASHMACHOK"
- Relations with direct suppliers / manufacturers of shoe products
- A famous actor buys shoes in our store
- We sell shoes only from natural materials
- We have a well-established logistics
- we have high competencies and extensive experience in the shoe market
- we have limited our own financial resources
- we have a lot of obsolete shoes
- we are forced to rent office, retail and warehouse facilities
- we have complaints from customers about the quality of service
- we are limited in potential buyers - residents of the sleeping area where our store is located
- we will be represented at the exhibition fair with free advertising on TV
- our director runs for deputies
- economists predict the growth of the shoe market
- a familiar journalist regularly places our store in his reviews of retail outlets in a magazine popular with our CA
- our customer wrote a positive review about us on the Internet
- dynamic opening of competitors of new retail outlets in our area
- Delay in deliveries by our main supplier due to the fact that he does not receive arch support for his products from abroad
- unexpected inspections of tax and other inspection organizations
- shortage of retail space of the required size
- lingering warm autumn - no need for warm winter shoes with fur
SO actions. How to make the most of our advantages to realize this opportunity? For example, it is necessary to agree with the actor to come to our store when we work at the exhibition fair. Then the TV people will definitely not cut the shooting with our store from their report. And the actor is also pleased and helpful to once again appear on the screen.
Actions WO. How to protect an opportunity from shortcomings? Thanks to customer reviews and journalist reviews, we can have an influx of new customers, our task is to provide decent service, which means that we need to take up the training and motivation of staff.
Actions ST. What strengths can we use to combat threats? To reallocate the volume of purchases between suppliers and expand the range of suppliers - so that it is less dependent on the main one.
W-T actions. We minimize flaws to reduce the risk of a threat. Against the background of a shortage of retail space of the required size and our forced lease of premises with very limited resources, we unite with other tenants, looking for space in unusual premises, for example, entertainment centers, where a discount can be promised to everyone who buys tickets for entertainment (cinema, etc.) ...
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