SW0T analysis method, also known as situation analysis method, is a commonly used analysis method in enterprises. That is, according to the established internal conditions of the enterprise itself, find out the advantages, disadvantages and core competitiveness of the enterprise. Where S stands for strength, W stands for weakness, O stands for opportunity and T stands for threat, where S and W are internal causes and O and T are external causes. According to the complete concept of enterprise competitive strategy, strategy should be an organic combination of what an enterprise can do (that is, the advantages and disadvantages of the organization) and what it can do (that is, the opportunities and threats of the environment).
Boston matrix
For a long time, people are used to using the matrix diagram of market growth and market share (Boston matrix diagram) to solve the balance problem of business portfolio. This method distinguishes four business combinations: (1) question mark (high growth and low market share); (2) Star business (star means high growth and high market share); (3) Cash cow (low growth and high market share); (4) thin dog business (dog, refers to low growth and low market share). This tool analyzes business units through market share and market growth rate (market life cycle), which is a way to consider the balance and development of business portfolio. If a company does not have a cash cow business, it shows that its current development lacks cash sources; If there is no star business, it means there is no hope for future development.
With this tool, we can classify the business of the group (except the insurance business). These four types of business can not simply exclude who is good and who is bad. The key is to analyze different types of business and formulate different competitive strategies. Such as the "thin dog" business. It is generally considered as the worst business combination, but it may still have its existence value in enriching the product sequence or maintaining a reliable image for the company in a certain market. In addition, it is more important to keep the balance between different business combinations, find out the combination logic suitable for the company's own situation, and allocate resources reasonably in different business combinations accordingly. If the company's goal is to achieve revenue growth, then the corresponding resource allocation may need to be tilted towards star business and problem business. If the company aims to pursue stable cash flow, it should maintain and develop the cash cow business.
However, there are many defects in this method: first, this method does not solve the problem of how enterprises choose new business. Second, the rating scale is too wide, which may cause two or more different businesses to be located in one quadrant; Secondly, because of the compromise rating, many businesses are located in the middle area of the matrix, and it is difficult to determine which strategy to use; In addition, this method is also difficult to balance two or more businesses at the same time. The third is to assume that these businesses are independent, but the businesses of many companies are closely related. For example, Taurus business and thin dog business are complementary business combinations. If thin dog business is abandoned, Taurus business will also be affected.
Fourth, take relative market share as competitiveness, and only consider sales growth rate and relative market share, without considering other variables. Fifth, when calculating the current market share, it is assumed that the "market" can be accurately determined. This is not necessarily the case, especially in some cases, because of the changes in regions, products or consumer market segments, the market boundaries are in a state of constant change.
GE multi-factor combination matrix
In order to overcome the obvious defects of BCG matrix, General Motors developed GE matrix in 1970s, which is another enterprise management method for planning and business combination. It adopts Nine palace map, which is composed of industry market prospect and enterprise competitiveness, and analyzes the business unit according to the attractiveness of the relevant market where the business unit operates and the competitive advantage of Ik business orders in this market. Among them, market attraction factors are usually regarded as exogenous variables, which enterprises can't control. The degree of market attraction mainly considers market scale, market growth rate, periodicity, competitive structure, entry barriers, industry profit rate, technology and other indicators; The competitiveness of food industry can be regarded as an endogenous variable, which can be controlled by enterprises. Competitive advantage mainly considers market share, marketing, research and development, manufacturing, management ability, financial resources and other indicators. The GH matrix divides the three standard strategic countermeasures attracted by the market into nine countermeasures. Then, according to the industry factors such as profitability, market growth rate, market quality and legal status, as well as the enterprise and lp strength factors such as market position, production capacity and R&D capacity, the businesses of the enterprise are quantitatively analyzed, and finally their positions in the matrix are comprehensively determined, and the countermeasures of mutual disappearance are adopted.
For those business units with great growth potential and competitive advantage, the company should continue to invest, and for those business units that are least competitive or attractive in the market, it should be retired for 30 years. It may be difficult for a company in the middle to make a decision to advance or retreat, but this tool can also help us identify the original prisoners formed by the positioning of these business units in the matrix, the future direction of the business, and formulate strategic measures that are in line with our own reality.
But this matrix also has two major defects:' According to Ge's thinking, enterprises in the same industry only have their own strengths, and there is no difference in external environment. In fact, the external environment at the specific enterprise level is different from that at the whole industry level. Second, although there are many internal and external factors, they are basically resource and environmental factors, and there is no self-connection between the internal capacity factors of enterprises and the characteristics of industrial development stages related to the long-term trend in the future.
Maternal advantage theory
In 1980s, Tishan enterprises of T.J.Peters and R.H. wortmann should develop their business based on their core business, which was quickly accepted by enterprises because it overcame the problems brought by complicated management in the merger plan. In 1990s, c.K.Prahaland and G.IIamel sublimated the core business theory, and proposed that enterprises should build business portfolio based on core competence, and establish corresponding organizational structure and management mode to create value. Many public journals try to define their own core competence, but due to the lack of analytical tools and the concept of core competence, they cannot explain the original murder of enterprises that can succeed with highly decentralized Ik services. Therefore, the theory does not provide much practical guidance for formulating the company's hierarchical strategy. Later, the theory of maternal advantage put forward by Michael G00 1d, Andrew Campbell and Marcus Alexander in 1995 filled the deficiency of the concept of core competence and provided an effective tool for making enterprise strategic plans.
The theory of matrix advantage is mainly to solve how to combine the strategic skills or core competence of headquarters with the key success factors needed by business units to gain competitive advantage. The basis of this method is: the company should develop a business combination suitable for the advantages of the headquarters parent company; On the other hand, the company headquarters should also develop parent-child advantages suitable for its business portfolio.
In this way, the company should be able to gradually increase the fit of the following two aspects: (1) the fit between the key factors of the success of the division and the skills, resources and characteristics of the company headquarters; (2) the suitability of the skills, resources and characteristics of the company's headquarters for upgrading business units with the help of the headquarters, and the opportunities for lk performance (opportunities for cultivating business units).
After combination, the possible results are as follows:
(1) core business: those businesses whose headquarters can increase their value without damaging their value, which is the core of future strategy. The core business has the opportunity to improve its performance, and the company has a thorough understanding of the success factors of its business. In the business portfolio, the company should give priority to the development of core business.
(2) Marginal business in the core area: refers to the business that meets the characteristics of some headquarters and does not meet the characteristics of other headquarters. In other words, the headquarters can add value or damage it. The effect after synthesis is difficult to determine. Therefore, it is necessary for the company's decision-making level to make accurate analysis and judgment, and turn it into core business as much as possible.
(3) Ballast area business: those businesses that the head office knows clearly but can't help. Although the key success factors match, there is no opportunity for mother-in-law, so the possibility of further value creation in ballast area business is relatively small, and these businesses may be more successful if they operate independently. The slow growth of value creation activities in ballast business makes managers unable to engage in more innovative activities, and once the environment changes, this business is at risk of turning into a heterogeneous business. Managers should turn the business demand of ballast area into the mother opportunity of marginal business or core business, otherwise the company should give up the business.
(4) Value trap business: The value-added services provided by the headquarters are not suitable for the key success factors required by the business unit, and the attention of the headquarters may bring more negative impacts to the business unit. This kind of business has the opportunity to improve its performance, and the temporary high income of business is often that decision makers can't make a clear judgment, which makes the company fall into a value dilemma in the future.
(5) Heterogeneous business: refers to businesses that are obviously not suitable for storage. These businesses have no value-added opportunities, and their behaviors are very different from those of the headquarters. These businesses must be resolutely withdrawn.
The matrix advantage theory not only simply analyzes the Ik service unit, but also links the business unit with the positioning of the group headquarters, and its strategic positioning at the headquarters level is mainly the role of a capability cultivator.