Analysis of the strengths and weaknesses of the enterprise. Analysis of strengths and weaknesses

SWOT analysis, general concept

Why do you need a SWOT analysis?

What rules should you follow when conducting a SWOT analysis?

How SWOT analysis works

SWOT Matrix

Strengths and weaknesses of SWOT analysis

SWOT analysis. Part 1 - Strengths and weaknesses

Any head of an enterprise should know the strengths and weaknesses of a SWOT analysis, because he must be prepared for unexpected and not always pleasant surprises, and respond quickly and clearly to them. For these purposes, SWOT analysis technology is provided.

Knowing the strengths and weaknesses of SWOT analysis, through the practical use of marketing research of this kind, an entrepreneur will always be able to find the best solution in any situation.

The concept of “SWOT” is borrowed from the English language and is essentially an abbreviation of English words:

S – Strengths – talking about the strengths and advantages of the enterprise;
W – Weaknesses (weaknesses) – shortcomings, weak points;
О – Opportunities (favorable opportunities) – we mean opportunities from the outside, thanks to which, if favorable conditions arise, there is a high probability of creating additional advantages in the company’s activities;
T – Threats – circumstances that have the potential to cause harm to the organization.

By conducting a SWOT analysis of the strengths and weaknesses of an enterprise, it is possible to clearly clarify whether the company (even) uses its internal strengths to the fullest, and also identifies positions that can become strong, those that need to be adjusted, etc.

A standard SWOT study aims to analyze the strengths and weaknesses of an enterprise, assess risk (including) and best opportunities. It is important not only to obtain the information of interest, but also to compare the results of the study with the indicators of the most important competing companies.

The conducted SWOT analysis allows us to answer important questions, namely:

Are personal strengths fully utilized by the firm?
What distinctive features does the enterprise have in implementing its own strategy?
Are there any weak points and how should they be corrected?
Which opportunities are most likely to lead to success.
What potential threats should a manager take seriously? features of the actions taken in this case.

The most optimal time for SWOT analysis is the period when the direction in accordance with which further business development is planned is being formulated.

When performing a SWOT analysis of the strengths and weaknesses of an enterprise, it is important to adhere to well-known rules.

The research vector must be clearly specified. When analyzing the entire business as a whole, the results will be very generalized and will be completely useless. Therefore, it is recommended to conduct a SWOT analysis in specific areas.
All concepts of SWOT analysis must be clearly understood.
Conducting assessments from a market perspective. When carrying out the analysis, it is necessary to use the strengths and weaknesses as they appear to competitors and consumers. After all, strengths will be such only if they are visible from the market position.
Put objectivity first. Input information must be diverse. Research should not be carried out by just one person. The possibility of in-depth analysis is allowed only if the assessment is given by a group.
The wording must be clear. Avoid lengthy and ambiguous phrases. The result depends on their accuracy.

The principle of operation of SWOT analysis is simple and comes down to a certain scheme.

The first is the identification of strengths and weaknesses by experts. These characteristics are internal.

Here the strong and weak elements characteristic of the company are identified. In many ways, this depends on the literacy of drawing up a long-term plan.

To draw up an expert opinion, it is enough to arrange a survey with the management of the enterprise.

The assessment of strengths and weaknesses should be carried out in at least three different areas:

When analyzing internal factors, such a model can be applied. Rate vectors:

to what extent the company's marketing activities correspond to the external environment;
degree of adequacy of the sales system to the marketing channel;
whether the organization of production processes corresponds to the adequacy of the market products;
how logistics processes are organized and whether they are adequate to the marketing channel;
to what extent do the financial position of the company correspond to its objectives;
whether the administrative system corresponds to the quality of business process administration.

The second is a description of opportunities and threats.

This includes external factors, situations emerging outside the company, and the company’s business environment.

The threats are usually the same. They are:

Analysis of the strengths and weaknesses of the enterprise, assessment of opportunities and threats depending on the degree of impact on the company.
A SWOT matrix is compiled, where all information is summarized in the form of tables.
The impact of factors is analyzed.
After drawing up a description and conducting a marketing analysis, a strategy is determined, which is based on the results of the descriptions proposed above, using strengths and compensating for weaknesses.

All received information is entered into a special table consisting of 4 fields. Such a table is called the SWOT Analysis Matrix.

How to analyze the effect of factors

In accordance with the information received, an analysis is made and a conclusion is drawn regarding how much the “strengths” of the enterprise are capable of realizing the company’s capabilities in achieving certain planned goals.

The SWOT analysis matrix after filling out the necessary data will look something like this:

Strategy MatrixSWOT analysis

Finally, a matrix of SWOT strategies is drawn up. This, in fact, is what everything was started for.

All data obtained as a result of the SWOT analysis is used to develop certain directions of the strategy, along which subsequent work will be based.

As a rule, the organization carries out work in several directions at once, namely:

realizing strengths;
correction of weaknesses;
taking measures to compensate for threats.

Based on the results of the analysis of tabular data, a matrix of activities aimed at correcting shortcomings in the company’s activities is compiled. All information is recorded in one table, represented by four fields:

After analyzing all the information presented in the table, a list of probable actions is compiled, the so-called “marketing plan”.

A SWOT analysis of the strengths and weaknesses of an enterprise has both positive aspects and disadvantages.

StrengthsSWOT analysis:

makes it possible to judge the strengths and weaknesses of the organization, as well as to initiate the likelihood of threats and opportunities;
is easy to use and quite effective;
draws a relationship between the potential and problems of the company, compares strengths and weaknesses.
extensive data is not required for analysis;
selects options under which the institution will exist with dignity;
helps to establish a promising direction for the development of the company;
allows you to evaluate the profitability indicator and compare it with similar data from competitive organizations;
creates conditions for assessing the existing resources of the institution;
by analyzing the strengths and weaknesses of the project, management receives a warning about what problems may arise;
the management team has the opportunity to expand and strengthen competitive advantages;
thanks to SWOT analysis, a clearer picture of the market situation is formed;

SWOT analysis of the strengths and weaknesses of an enterprise helps to avoid troubles, dangers and choose the most favorable development path.

SWOT analysis and its weaknesses:

SWOT analysis is a simple tool aimed at providing structuring of information. Such a procedure does not offer any specific answers, quantitative assessments or clear recommendations.

The role of such an analysis is to obtain an adequate assessment of the main factors and, with a certain percentage of probability, to predict the development of specific events. The analyst should put forward appropriate recommendations.

In addition, it is only at first glance that the analysis procedure seems simple. In fact, the objectivity of the result is determined by how complete and high-quality the information was provided.

To obtain data that is as close to reality as possible, you will need to involve an expert who will assess the current state and determine the likely vector for further development of the market.

If errors were made when filling out the matrix table, it is not possible to identify them during the analysis process. Therefore, if any extra factor is added, or, conversely, there is a loss of an important element, the conclusions may be erroneous.

An analysis of the strengths and weaknesses of an enterprise, carried out using SWOT analysis, allows an entrepreneur to choose the most correct direction for the development of his business. That is why it is necessary to approach the organization and conduct of such a procedure extremely responsibly.

Indicators

The degree of importance of the indicator (in points from 1 to 3)

Competitiveness Score

Indicators

Strengths:
availability of original design developments
economical operation
small dimensions and good maneuverability

Weaknesses:
narrow range of products, low share of products
inflexible pricing policy
undeveloped sales network

Strengths and Weaknesses of a SWOT Analysis: Useful Guidelines for Conducting

To achieve its goals, it is important for the management of the enterprise to know the potential opportunities, as well as the weaknesses of the enterprise. Internal strengths allow a company to take advantage of opportunities in the external environment, while weaknesses indicate the potential for danger from the external environment that may arise if management does not develop precautions.

The so-called SWOT analysis is used as an effective tool for analyzing the current influence of the external environment on the activities of an enterprise. Its name comes from the initial letters of the English words strengths; weaknesses; opportunities; threats. Such an analysis must be carried out in order to, by identifying and eliminating existing weaknesses, increase power and avoid possible threats. Its meaning is that the manager enters data useful for use in strategic planning into four cells - strengths, weaknesses, threats and opportunities.

A SWOT analysis is very similar to drawing up a strategic balance sheet: strengths are a company's competitive assets, and its weaknesses are liabilities. It's just a matter of how much its strengths (assets) offset its weaknesses (liabilities) (the 50:50 ratio is considered undesirable), and also how to use these strengths and how to tilt the strategic balance towards assets. Practice shows that SWOT analysis is a management tool for every top manager abroad.

Analysis of the organization's environment using the SWOT method

In order to successfully survive in the long term, an organization must be able to predict what difficulties may arise in its path in the future, and what opportunities may open up for it. Therefore, strategic management, studying the external environment, focuses on finding out what threats and opportunities the external environment contains.

Knowing about them is not enough to successfully manage threats and truly seize opportunities. You need to be able to counter threats and have the capacity to exploit them. The strengths and weaknesses of the organization's internal environment, to the same extent as threats and opportunities, determine the conditions for the successful existence of the organization.

Environmental analysis aims to identify threats and opportunities that may arise in the external environment in relation to the organization, as well as the strengths and weaknesses that the organization possesses. It is to solve this problem that certain methods of environmental analysis have been developed.

The SWOT method (an acronym made up of the first letters of the English words: strength, weakness, opportunities and threats), which is used in strategic management to analyze the environment, is a fairly widely recognized approach that allows for a combined study of the external and internal environment. Using the SWOT method, it was possible to establish lines of communication between the strengths and weaknesses that are inherent in the organization, external threats and opportunities. The SWOT methodology involves first identifying strengths and weaknesses, as well as threats and opportunities, and then establishing connections between them, which can later be used to formulate the organization's strategy.

Stage I - taking into account the specific situation in which the organization is located, a list of its strengths and weaknesses is compiled, as well as a list of threats and opportunities.

Stage II - establishing connections between them. For this purpose, a SWOT matrix is compiled, which has the following form:

Rice. 6.1. SWOT Matrix

The top and left sections of the matrix record all relevant opportunities, threats, strengths and weaknesses.

At the intersection of the sections, four fields are formed: the “SEVEN” field (strength and opportunities), the “PPE” field (strength and threats), the “SLM” field (weakness and opportunities), the “SLZ” field (weakness and threats). In each of these fields, the researcher must consider all possible pairwise combinations and highlight those that should be taken into account when developing the organization's behavior strategy. For those couples who find themselves at:

field “SEVEN” - a strategy should be developed to use the organization’s strengths in order to benefit from the opportunities that have appeared in the external environment;
field “SLM” - the strategy should be structured in such a way that, due to the opportunities that have arisen, an attempt is made to overcome the weaknesses of the organization;
field “PPE” - the strategy should include the use of the organization’s strength to eliminate threats;
field “SLZ” - the organization must develop a strategy that would allow it to get rid of the weakness and try to prevent the threat.

When developing a strategy, you should remember that opportunities and threats can turn into their opposites. Thus, an untapped opportunity can become a threat if a competitor exploits it, and vice versa.

To successfully analyze the organization’s environment, it is important not only to identify threats and opportunities, but also to try to evaluate them from the point of view of how important it is for the organization to take into account each of the identified threats and opportunities in its behavior strategy.

To assess opportunities, a method is used to position each specific opportunity on the opportunity matrix.

The Impact of Opportunities on the Organization

Rice. 6.2. Opportunity Matrix

The resulting nine opportunity fields within the matrix have different meanings for the organization. Opportunities that fall into the fields “VS”, “VP”, “SS” are of great importance for the organization, and they must be used. Opportunities that fall into the “CM”, “EM”, “NM” fields are practically not worthy of the organization’s attention. Regarding opportunities that fall into other fields, management must make a positive decision about their use if the organization has enough resources.

A similar matrix is used to assess threats.

Impact of threats on the organization

	Destruction	Critical condition	Serious condition	"Minor bruises"
High probability	Field "VR"	Field "VK"	Field "BB"	Field "VL"
Average probability	Field "SR"	Field "SK"	Field "NE"	Field "SL"
Low probability	Field	Field "NK"	Field "NV"	Field "NL"

Rice. 6.3. Threat Matrix

Those threats that fall into the fields “VR”, “VK”, “SR” cause a very great danger for the organization and require immediate and mandatory elimination. Threats that fall into the fields of “BB”, “SC”, “HP” should also be in the field of view of senior management and be dealt with as a matter of priority. Regarding the threats that are in the fields of “NK”, “SV”, “VL”, a careful and responsible approach to eliminating them is needed.

Threats that have entered other fields should not fall out of sight of the organization’s management, therefore their development should be carefully monitored, although the goal of eliminating them as quickly as possible is not set.

Based on an assessment of the internal state of the enterprise and studies of the external environment, below is SWOT - activity analysis OJSC "Milkman" (tab. 6.2.).

Table 6.2. SWOT analysis of activities: OJSC "Molochnik"

sufficient raw material base;

low cost of production;

experienced staff;

significant relative market share;

high depreciation of fixed production assets;

inefficient use of enterprise resources;

predominance of manual labor, low capital-labor ratio;

large range of products;

stable financial position;

management's willingness to take risks.

lack of structural divisions for marketing;

presence of unprofitable activities;

disproportionate growth of own and attracted capital;

low degree of employees’ readiness for change;

misunderstanding of team members with each other.

Possibilities

Threats

expansion of product markets;

increasing trade turnover;

economies of scale;

increasing fixed and working capital;

growth in labor productivity and material security of workers;

increasing the level of professionalism of personnel;

expansion of the product range;

creation of a dealer network;

increasing the profitability of activities;

modernization of technological equipment;

creating an organizational culture at the enterprise;

export of products to near and far abroad countries.

increasing the level of competition in the industry;

technological lag;

unsuccessful investment policy;

reduction in the level of qualifications of personnel.

Based on generalized information about the internal and external environment of the enterprise and their groupings presented in SWOT matrices, we are able to preliminarily formulate a development strategy OJSC "Milkman" designed for 3 years, to 2004

Analysis of the strengths and weaknesses of an enterprise is a very important direction in the activity of an enterprise. SWOT analysis method can effectively help with this and is widely used by businesses around the world. A modern manager must be fluent in this method.

SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats. A qualitative analysis of the prospects of an enterprise is carried out in order to clarify the above-mentioned aspects of its activities, the opportunities opening up to it and the impending threats. The strengths and weaknesses of an enterprise must be assessed in the context of its competitiveness. SWOT analysis helps develop an understanding of the circumstances in which a company operates. This method helps you balance your internal strengths and weaknesses with the opportunities and threats that the enterprise will have to face. This analysis helps to determine not only the capabilities of the enterprise, but also all available advantages over competitors. Below are sample groups of questions for conducting a SWOT analysis. The first two groups concern internal factors. Strengths and weaknesses are analyzed. The second group of questions concerns external factors and includes opportunities and threats.

When designing questionnaires, keep in mind that lists that are too long lead to ambiguity or vagueness and make it difficult to identify what is really important. Strengths should be based only on facts. Thus, this method helps to identify key success factors (KSFs), i.e. strengths and weaknesses of the enterprise that have the greatest impact on the success of its activities. So, at the first stage you need to analyze the following factors.

Internal factors. Strengths:

competence;

availability of sufficient financial resources;

having good competitive skills;

good reputation among consumers; recognized leadership of the enterprise in the market; the company has well-thought-out strategies in this area of activity;

Availability of our own high quality technologies; availability of cost advantages for products and services; having advantages over competitors; Ability to innovate, etc.

Weaknesses:

lack of strategic direction; marginal position in the market; presence of outdated equipment; low level of profitability; - unsatisfactory level of management; poor control;

weakness compared to competitors; backwardness in innovation processes; narrow range of products; unsatisfactory image in the market; low marketing skills among staff; lack of sufficient funding for projects, etc.

External factors. Favorable opportunities:

working with additional consumer groups;

introduction into new markets or market segments;

expanding the range of products to satisfy a wider range of consumers;

product differentiation;

the ability of the enterprise to quickly move to more profitable strategic groups;

confidence in relation to rival firms;

rapid market growth, etc.

Threat factors:

arrival of new competitors;

increasing sales of similar products;

slow market growth;

unfavorable tax policy of the state;

changes in the needs and tastes of customers, etc.

Summarizing the above, a manager must be able to determine what strengths his enterprise has, not only see, but also admit its weaknesses. He must recognize what opportunities exist for the enterprise and take into account those threats that may prevent it from capitalizing on opportunities.

Managing threats and taking advantage of existing opportunities requires more than just being aware of them. If a business is aware of a threat but does not confront it, it may fail in the marketplace. On the other hand, an enterprise may have information about new opportunities, but not have the resources to implement them.

SWOT analysis involves interactive use of the matrix. On the left, two sections are highlighted (strengths, weaknesses), into which all the characteristics of the enterprise identified at the first stage of the analysis are respectively entered.

At the top of the matrix, two sections are highlighted (opportunities and threats), and at the intersection of these sections, four fields are formed for further research:

1. “SIV” (strength and capabilities);

2. “SIU” (force and threats);

3. “SLV” (weakness and opportunity);

4. “SLU” (weakness and threats).

All relevant entries are entered into these fields as suggestions as a result of an analysis of the interaction of the above characteristics.

From the matrix it is clear that the most favorable opportunities for the existence of an enterprise are opened by the “SIV” field. This field allows you to use the strengths of the enterprise in order to benefit from emerging opportunities. The “SLV” field allows you to try to overcome the existing weaknesses of the enterprise using the opportunities that have emerged. The “SIS” field presupposes the possibility of using the enterprise’s forces to eliminate threats. The SLU field is the most dangerous for the enterprise. It is characterized by the weakness of the enterprise's position and the danger of an impending threat.

The manager must also be aware that opportunities and threats can turn into their opposites. Thus, unused opportunities of an enterprise can become a threat if a competitor uses them in time. On the other hand, a successfully prevented threat can provide a company with a strong position if competitors have not eliminated the same threat.

Assessing strengths and weaknesses. Strengths- this is the experience and resources that the enterprise owns, as well as strategically important areas of activity that allow it to win the competition.

Weaknesses- these are shortcomings and limitations that hinder success.

There are many sources of strengths and weaknesses of an enterprise, some of which are considered in the industry analysis. Thus, the strengths include serious and obvious consumer preferences and the possibility of economies of scale. The weaknesses of the enterprise are the serious dependence on the domestic market for the volume of direct sales, the inability to meet the needs of new market segments, etc.

Determination of strengths and weaknesses should be carried out in all areas of the enterprise’s activities:

organization and general management;
production;
marketing;
finance and accounting;
personnel management, etc.

Below is a set of factors and key issues for their analysis in the production sector (Table 5).

Table 1 Analysis of the strengths and weaknesses of the enterprise in the field of production

Factors	Questions to consider
1. Cost of raw materials and their availability, relationships with suppliers	Do production facilities meet modern requirements?
2. Inventory control system, inventory turnover	How efficiently are production capacities used? Are there opportunities to expand the production base? What is the return on research and development? Does research and development lead to the creation of fundamentally new products?
3. Location of production
4. Economies of scale
5. Efficient use of capacity, advanced equipment
6. Degree of vertical integration, net production, profit
7. Control over the product preparation process
8. Purchase
9. Research and development, innovation
10. Patents, trademarks and similar forms of product protection
11. Amount of costs

The assessment of the factors of the strengths and weaknesses of the enterprise is given in comparison with the market leader on an interval scale by assigning each factor a certain weight, for example, from 1 (insignificant) to 5 (outstanding).

Strengths and weaknesses of the enterprise

1 Total

Determination of the main advantages. The enterprise strategy must take into account the strengths and weaknesses of the business and be based on its main advantages.

The main advantages characterize the exceptional competence (unique advantages) of the enterprise in solving the assigned tasks.

Unique advantages are based on a particularly effective combination of resources, which are divided into tangible and intangible.

Tangible resources are the physical and financial assets of an enterprise reflected in the balance sheet (fixed assets, inventories, cash, etc.). They determine the technical competence of the enterprise. Intangible resources are, as a rule, qualitative characteristics of a business. These include:

intangible assets not related to people - trademark, favorable location, prestige, image of the enterprise;
intangible human resources - special knowledge of personnel, experience, fame of the management team.

Unlike strengths and weaknesses, for which internal assessment is possible, the unique advantages of an enterprise must be perceived by consumers as such, i.e. be of some value to them.

For consumers, brand recognition (Red October confectionery factory), favorable location (Voronezh department store Russia), opening hours (24-hour pharmacies), highly qualified personnel (service industry), etc. are of great importance.

In a competitive environment, the unique advantages of an enterprise are eroded, and over time they lose their strength. From the point of view of significance for business, three categories of key competencies can be distinguished:

Disused ones that have already been adopted by the main competitors and have become a kind of industry standards. They do not give the company a competitive advantage and are a prerequisite for survival in the market.
Unpromising ones that currently remain valid, but may become widely available in the near future. In the short to medium term, the enterprise must protect such advantages and make the most of them. They cannot serve as the basis for a long-term strategy.
Sustainable competencies that an enterprise can protect for a long time.

When developing a strategy, it is necessary to make an informed assessment of available resources and unique advantages. Below is a list of key questions for their analysis:

What unique strengths does the organization currently have, how long will they remain strong, and when will they become industry standards?
How can these advantages be protected, developed and used within the strategy?
Is an enterprise able, on the basis of existing resources, to create new, original combinations of resources that in the future can be transformed into its main advantages?
Are the unique advantages of the enterprise taken into account in its production, sales and scientific and technical policies?