What is swot analysis? Why is it important to managers?

Definition of SWOT analysis SWOT analysis is an internal analysis method of an enterprise, that is, according to the established internal conditions of the enterprise, it finds out the advantages, disadvantages and core competitiveness of the enterprise, thus organically combining the company strategy with the internal resources and external environment of the company. 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).

Simple rules for successful application of SWOT analysis;

SWOT analysis must have an objective understanding of the company's strengths and weaknesses.

When conducting SWOT analysis, we must distinguish the present situation and prospect of the company.

In SWOT analysis, we must consider all aspects. .

SWOT analysis must be compared with competitors, such as better or worse than your competitors.

Keep the SWOT analysis concise and avoid complexity and over-analysis.

SWOT analysis varies from person to person.

Defects of SWOT analysis:

From the perspective of strategic management teaching, many strategic management textbooks still use SWOT analysis as the layout of the whole book. People are familiar with SWOT analysis, and most of them must use it for case analysis. In the field of enterprise management consulting, many strategic consulting reports use this as an analysis tool. So SWOT analysis is a perfect analysis tool? What are its problems and defects? SWOT analysis was first put forward by Learned et al. in 1965, and has been widely used in the field of strategic management. The internal analysis of enterprises, from the initial simple list to the concept of unique ability, value chain and core ability, can be regarded as the development of advantages. For the external analysis of enterprises, in addition to PEST analysis, Porter's competitive strategy theory analyzes the external environment of enterprises and further refines the industry, which undoubtedly has an important impact on the development of strategic management theory and practice.

The importance of SWOT analysis:

Make clear the complicated information with SWOT analysis.

SWOT analysis is used in internal marketing to make human resource planning more strategic.

Establishing four-dimensional human resource planning by SWOT analysis.

Using SWOT analysis to improve the scientificity of personnel decision.