To fulfill the tasks and achievesuccess each manager should evaluate his organization from the point of view of all parties, and most importantly - do not turn a blind eye to the problem areas and give them due attention. But before you start to fight with any problems, you need to identify them, understand their cause and suggest what the consequences might be.
For this, there are manymethods and methods, but the most popular and popular method is the SWOT-analysis. It is about him that will be discussed in this article. And also below it will be possible to find out what a SWOT-analysis of the firm's activities is, what are its strengths and weaknesses, and a clear example of this audit method will be presented.
What is a SWOT analysis?
SWOT analysis is the development of a well-knownProfessor Kenneth Andrews, who carefully investigated the issue of including external factors in the analysis of the organization's activities. This important moment made it possible to more accurately analyze the work of companies and clearly identify the causes and consequences of all phenomena occurring in their internal environment. It is this analysis that makes it possible to choose the main factors and directions that will lead the organization to success.
If you disassemble the name, the SWOT analysis is an abbreviation that consists of the following words:
- S is the strength of the firm (Strength);
- W is the weakness of the company (Weakness);
- O is the capabilities of the company (Opportunities);
- T are the problems (threats) faced by the firm (Threats or Troubles).
These four components can be calledfundamental principles of building the right business. It is important to note that SWOT analysis is a good representation of all the fundamental organizational moments, whose awareness and helps to build the right and necessary for the company's goals and objectives.
Objectives of the analysis
The purpose of the SWOT-analysis is a detailedstudying the processes that take place in the company, as well as external circumstances, threats and other phenomena that affect a particular firm. If the company does not have such strategically important information, then it can be called "blind", and all its attempts to achieve success will be meaningless and not substantiated.
Benefit from conducting such an analysis of activitieshard to overestimate. As research shows, it is especially useful to conduct a survey of the company's activities using the SWOT methodology for conducting competitive "exploration" and determining the company's place in the market for the provision of goods or services.
Factors in SWOT Analysis
Strategic analysis of the company or organization must include the following factors:
- organizational;
- technical;
- staffing;
- financial;
- marketing.
If these factors are taken into account, the head orthe chief manager of the firm is able to determine the best form of the organization's property, use its own resources and production assets in its work or work with the involvement of other firms. As well as SWOT-analysis of the company allows you to build the necessary personnel policies and methods, methods and principles of positioning the company at the level of the external environment.
In addition to internal factors,take into account also the properties of the external environment of social and economic environment, as, for example, the cultural, demographic, political situation can play a key role in building the subsequent concepts of doing business.
Types of analysis
There are the following types of SWOT-analysis of the enterprise:
- Express analysis.This type provides for identifying the strengths of the firm, which are key when confronting external threats to the business. In addition, this analysis allows us to identify ways to use various opportunities in the external environment and understand what resources should be used to achieve success. The advantage of this method of SWOT-analysis lies in the visibility and simplicity of the application of the data obtained in further practice.
- Consolidated analysis.This type provides for the study of the main indicators (organizational, financial, personnel, technology), which determine the activities of the firm at a particular moment. And thanks to the consolidated analysis, we can formulate a clear plan for further development. The advantages of this type of research of the firm's activity is to comprehensively assess the main factors of the firm, and to choose the appropriate development strategy and to identify a number of activities that will be focused on achieving strategic goals.
- Mixed analysis.This kind provides for the merging of the two previous types of analysis (express and summary). With this approach, it is possible to study in detail both the strengths that emerged during the SWOT analysis and all the main factors, and then obtain accurate data on the state of the firm and outline a plan for achieving strategic goals.
It is worth noting that most often used by managers during the audit is express analysis.
Strengths and weaknesses of the organization
SWOT analysis is just a collection techniquethese advantages and disadvantages of a certain firm, but how to use the information obtained can only identify those people who collected information and professional managers.
Do not forget that the weak and strongthe organization's parties identified in the SWOT analysis are a set of data that exist exactly at the time of the research. Therefore, it is extremely important to take any measures to improve the activities of the company without delay.
If we talk about the weaknesses of the company andthose opportunities that are in the management of the management, it should be understood that the data revealed during the research has a great influence on the future activity of the firm. However, it is very important to make the right decisions and build on the current information and try to organize the work of the company in such a way that it corresponds to reality and is comparable to the external environment.
So, for example, during the SWOT-analysis of the organizationit was found that she, conducting her business in the provision of entertainment services, is located in the territory of the state where the number of solvent population is significantly increased. In this case, the management of the organization has a sense to invest money resources in its development, with a view to further multiplying them.
Formulating goals based on analysis
Based on the findings of the company's SWOT analysis,It is necessary to formulate a number of tasks and goals and display them in a plan (road map). It should be remembered that these goals are the level of development that the organization is striving for today and the way to achieve it begins with the most important thing - awareness of the current state of affairs.
Use of information obtained during the analysis
As mentioned earlier, the purpose of thesuch an analysis is the development of the right strategic goals, so that the company can achieve success. After receiving important information, it is necessary to start developing a strategy and drawing up a plan for its implementation.
Must be taken into account the strengthsfirms - this will help to focus on the quality and quantity of services provided or the product of goods. Accounting for weaknesses is an opportunity to identify those moments that impede the company's progress toward success, but a conscious denial of this moment can cast doubt on all subsequent activities.
Advantages and disadvantages of analysis
Any method of researching the activities of an enterprise has strengths and weaknesses. SWOT-analysis is a very universal type of firm valuation, which has the following advantages:
- helps to identify problems in the firm and potential opportunities for improving work;
- ease of analysis and effective use of data;
- the ability to clearly identify the relationship between the firm's capabilities and emerging issues;
- In carrying out this analysis, there is no need to collect extensive information, it is important only to take into account the main factors of production;
- possibility to determine clear prospects for further development of the company;
- analysis helps to identify a clear picture of the company's profitability;
- opportunity to identify the competitive advantages of the enterprise and strengthen them;
- the ability to identify additional resources and internal capacity of the firm;
- analysis allows to prevent and identify existing problems (threats) and eliminate them in time;
- analysis provides an opportunity to objectively assess the situation in the external environment and adjust the firm's actions to them;
- when forming an action plan on the basis of analysis, it is possible to create a logical scheme in which the information and interaction of the strengths and weaknesses of the company will be correctly formulated.
However, in spite of multiple advantages, it is important not to forget about the following drawbacks of SWOT analysis, namely:
- absence of time dynamics (the analysis does not warn of the emergence of new threats and various factors);
- The lack of quantitative indicators in the analysis, because of what it can not be called sufficiently informative.
Proceeding from this, it can be concluded thatSWOT-analysis is appropriate when it is necessary in the short term to make an objective picture of reality for setting or adjusting goals and objectives. And also this research takes place when the firm implements a strategic plan, moves to certain goals and this kind of analysis can quickly reveal how effective the implementation of the program is.
How to conduct the analysis?
Before you study the example of SWOT analysis, it is importantread the instructions for its compilation. Conventionally, the process of conducting analytical work on the methodology of SWOT can be divided into five main stages, at which information is collected and entered in a standardized form of reporting (balanced scorecard).
The first step is to prepare for analysis.It is necessary to analyze the current affairs in the market, to find out whether the characteristics of the product or service provided correspond to the demand for today. It is especially important to pay attention to the opinion of consumers about the firm of its derivatives. Next, you need to conduct a competitive analysis, find out how well things are in the main competitors. At this point, it is important to remember that identifying the shortcomings and advantages of an organization is especially easy when compared with competing enterprises.
Further it is important to clearly define the internal factors,which can potentially affect the competitiveness, this can be the professionalism of personnel, the state of equipment, lack of resources, etc. That is, thus, a clear picture will be formed, where it will be seen whether the firm is ready to compete for consumers and that management should pay special attention to the elimination of shortcomings. And also at this stage, we study such indicators as the properties of the product, its recognizability in the market, consumer loyalty, price, range, technological equipment and availability of patents, distribution, as well as product positioning and advertising campaigns.
The second stage involves studying factorsenvironment and possible threats. At this stage of the analysis, you can get such information about the opportunities for expanding the company and gaining a new target group of consumers, increasing the range, developing new technologies that can reduce the cost of production. At the time of assessing potential threats, it is important to take into account factors such as the possibility of changing the lifestyle of consumers (raising or lowering salaries, cultural changes in the minds of a group of people, etc.), which can lead to the rejection of products, the appearance of new competitors, , demographic changes.
The third stage is the formation of a table ofreceived information. As noted earlier, all information must be recorded in a unified reporting form called balanced scorecard or a balanced scorecard. In the case of SWOT analysis, this is a table that consists of four squares, each of which answers questions about strengths (S), weaknesses (W), opportunities (O), and threats (T).
The fourth stage involves the formation of a report.To begin with, the strengths of the company are described, which are a competitive advantage. The following describes how the firm develops from these strengths. After this, proposals are being prepared to transform the company's weak points into strong ones. The same is done with threats - there are ways out of reformatting into new opportunities. It happens that there are simply no logical ways to transform negative moments into positive ones. In this case, it is necessary to prepare a program for minimizing losses due to the impact of threats.
After the forms have been filled, it is necessary to proceed to drawing conclusions. Here you can use the following methods:
- Fast method. In this case, all of the secondary issues are excluded, and the focus is on the main objectives. In this case, unnecessary items are excluded from the forms.
- Method of the matrix.In this case, certain strategies for solving the set tasks are formed, namely, the actions of S-O, W-O, S-T, W-T. Actions S-O - is an activity that allows you to take advantage of the strengths of the company and the available opportunities. W-O actions are programs that help overcome the weaknesses and take full advantage of the available opportunities. Actions S-T - is an activity that involves comparing possible threats with the existing strengths, which in case of problems will help the company avoid large losses. Actions W-T - is an activity that involves overcoming the weaknesses of the firm by conditional exposure to their potential threats.
At the fifth stage of the reporta presentation is prepared. Here, such items, introduction, brief argumentation of the constructed matrix and decoding of the received data, conclusions, proposals should be clearly formulated, and a plan of action of the firm for achieving the set goals should be prepared.
Example of analysis
In this sample SWOT analysis, key questions for matrix construction are outlined. So:
- Strengths of the company (S):the firm and its product are known to the consumer, the degree of loyalty is at the proper level, the price corresponds to the solvency of the target audience, the assortment is diverse, the brand shops are located within walking distance for the target audience of buyers.
- Weaknesses of the company (W): during manufacturing, the percentage of products was significantly increased, personnel turnover appeared, the company uses up-to-date manufacturing technology.
- Features (O):the sale of goods through mobile applications and online stores, the increase in the range, the acquisition of new machines and equipment, the possibility of developing new systems for encouraging, motivating and motivating employees.
- Threats (T): increase in the number of competitors' stores, changes in tax legislation.
Thus, having such data, management can form a clear plan of action and make those decisions that will help to avoid financial losses.
