SWOT analysis method is a comprehensive analysis method of strengths, weaknesses and risks, also known as situation analysis method, also known as Dawes matrix.

In 1965, Learned proposed the changing factors of internal strengths and weaknesses, external opportunities and threats involved in SWOT analysis, but only analyzed them in isolation.

Heinz Weihrich, a professor of international management and behavioral sciences at the University of San Francisco, developed SWOT analysis and proposed the TOWS analysis method in the early 1980s.

The four English letters of SWOT represent

SWOT analysis actually synthesizes and summarizes the various major internal strengths, weaknesses, opportunities and threats that are closely related to the internal and external conditions of the enterprise, lists them through investigation, and arranges them in a matrix form, and then uses the idea of ​​​​system analysis to Match various factors with each other and analyze them to draw a series of corresponding conclusions.

Overall, SWOT can be divided into two parts

The analysis of advantages and disadvantages mainly focuses on the company's own strength and its comparison with competitors. They are the positive and negative factors that exist in the company's own development and are active factors.

From the perspective of enterprise competition, the so-called Strengths and Weaknesses are the comparison results between an enterprise and its competitors or potential competitors (with a certain technology, product or service). The advantages of the enterprise itself are The disadvantages of competitors, and the advantages of competitors are their own disadvantages, so the advantages and disadvantages are internal and external to each other

Strength

Weakness

In the SWOT analysis method, opportunities and threats refer to external factors. They are the favorable and unfavorable factors that the external environment has a direct impact on the development of the company. They are objective factors. The opportunities of one party are the threats of the other party. The analysis of opportunities and threats will Focus on changes in the external environment and their possible impact on the enterprise

opportunity

threats

Strengths

 Production (strong in itself)

 Sales (strong in itself)

 Manpower (strong in itself)

 R&D + technology (strong in itself)

 Finance + investment + taxation (strong in itself)

 Law (strong in itself)

 Business model (strong in itself)

 Government public relations (strong in itself)

Opportunities

 Social (beneficial)

 Technology (favorable)

 Economical (beneficial)

 Environment (favorable)

 Politics (favorable)

 Legal (favorable)

 Moral (beneficial)

 Upstream suppliers (favorable)

 Downstream buyers (favorable)

Step 1: Describe the enterprise environment.

Step 2: Identify all external factors affecting the business.

Step 3: Forecast and evaluate future changes in external factors.

Step 4: Examine the strengths and weaknesses within the company.

Step 5: Confirm the company’s key capabilities and key limitations based on the company’s resource portfolio.

Step 6: Use SWOT analysis to construct feasible strategies.

Step 7: Position the results on the SWOT analysis diagram.

Step 8: Choose strategies and formulate an action plan

Invest resources to strengthen superior capabilities and seize opportunities (SO: Maximum and maximum strategy)

Invest resources to strengthen superior capabilities and reduce threats (ST: maximum and minimum strategies

Invest resources to improve weak abilities and strive for opportunities (WO: Minimum and Maximum Strategy)

Invest resources to improve weak capabilities and reduce threats (WT: minimal and minimal strategies)

The above SWOT combination analysis is based on the divisibility principle of mathematical elements. However, the actual situation is very complex. Opportunities, threats, strengths, and weaknesses are intertwined, and the solution to the problem is also comprehensive and balanced, with pros and cons shared. , a win-win approach, that is, (SW) versus O, (SW) versus T, (SW) versus (OT) and other combination methods

SWOT analysis has significant structural and systematic characteristics compared with other analysis methods.

Able to systematically and comprehensively analyze various factors affecting corporate strategy. When formulating strategies, corporate decision-makers should systematically and comprehensively consider changing factors such as the company's internal strengths, weaknesses, and external opportunities and threats.

SWOT makes two distinctions between the information needed for strategic decision-making: one is the internal and external distinction, which is to distinguish the enterprise's own information from the information of its environment; the other is the interest-and-harm distinction, which is to distinguish between the internal advantages, external opportunities and the information that are beneficial to the enterprise. Distinguish between internal weaknesses and external threats that are harmful to the enterprise. This classification greatly clarifies and simplifies the information and sources that enterprises need to master when formulating strategies.

SWOT itself is simple and intuitive but has rich and broad connotations. Depending on different needs, corporate decision-makers can use this method to clarify the general direction through rough analysis, or through in-depth investigation and research to draw detailed and reliable basis and clear conclusions.

Since SWOT is a relatively static and qualitative analysis method, and it is difficult to have objective standards for identifying strengths, weaknesses, threats and opportunities, the final application effect of this method depends on the analysis of decision-makers’ understanding of the company and its external environment. level of awareness

Three implicit assumptions about the limitations of SWOT analysis

First, although the four elements in the SWOT framework should be included in the theory of enterprise success and competitive advantage, this framework does not provide guidance on how enterprises identify these four elements, thus limiting its application.

Second, in terms of content, SWOT analysis should include both static analysis and dynamic analysis, that is, it should not only analyze the actual advantages and disadvantages of the research object and its competitors, but also explore the respective advantages and disadvantages of the research object and its competitors and their respective advantages and disadvantages. Opportunities of encouragement threaten the regularity of development and change

Third, in strategic management, SWOT analysis cannot be isolated, but should be combined with the analysis of the causes of the current situation, especially the analysis of the conditions that need to be met to achieve future strategic goals or stage goals.

Fourth, it is necessary to make it clear that in SWOT analysis, the status of advantages, disadvantages, and opportunities and threats are different. External environmental factors generate certain opportunities or threats for the research object by changing the comparison of advantages and disadvantages between the competing parties. This is the purpose of SWOT analysis. basic structure

 When conducting SWOT analysis, you must have an objective understanding of the company's strengths and weaknesses.

 When conducting SWOT analysis, it is necessary to distinguish between the current situation and prospects of the company.

 A comprehensive approach must be taken when conducting a SWOT analysis.

 When conducting SWOT analysis, you must compare with competitors, such as whether you are better or worse than your competitors.

 Keep the SWOT analysis method simple and avoid complication and over-analysis.

 SWOT analysis method varies from person to person.

Conduct a SWOT analysis before the overall goals are clear and agreed upon

Use SWOT analysis as a viable strategy

To use SWOT to analyze IBM, you must have a full understanding of the company itself, and deepen your understanding of the company's competitive intelligence theory from a practical perspective.

Follow the steps of SWOT analysis, as follows:

Opportunities and threats analysis of the company

Analysis of the company’s strengths and weaknesses

Construct the SWOT matrix framework of the enterprise

Wal-Mart SWOT Analysis

Starbucks (Starbucks) SWOT Analysis

Nike (Nike) SWOT Analysis Case

The TOWS analysis method is also called the inverted SWOT analysis method. The TOWS analysis method is very similar to the SWOT analysis method, and its analysis sequence is exactly the opposite of the SWOT analysis method.

It first analyzes the opportunities and dangers of the market, and then analyzes the strengths and weaknesses of the company

Problems arising from basic SWOT analysis can be solved by more advanced POWER SWOT analysis

POWER is the acronym for Personal, Experience, Order, Weighting, Emphasize detail, and Rank and prioritize. This is the so-called advanced SWOT analysis method.

P=Personal experience

O = Rules - Advantages or Disadvantages, Opportunities or Threats

W = specific gravity (Weighting)

E = Emphasize detail

R=Rank and prioritize

Those elements that can have the most significant impact on your marketing strategy. You rank them in word order from high to low, and then prioritize those elements that rank highest