Introduce SWOT analysis method
The competition theory put forward by Michael Porter, a famous competitive strategy expert, thoroughly analyzes and explains the "possibility" of an enterprise from the perspective of industrial structure, while competency-based management scientists use the value chain to deconstruct the value creation process of an enterprise and pay attention to the analysis of the company's resources and capabilities. On the basis of synthesizing the former two, SWOT analysis combines the internal analysis of the company (that is, the research orientation concerned by the management authorities in the mid-1980s, represented by the ability school) with the external analysis of the industry competitive environment (that is, the central theme concerned by the early strategic research, represented by Andrews and Michael Porter) to form its own structured balanced system analysis system. Compared with other analysis methods, SWOT analysis has obvious structural and systematic characteristics from the beginning. As far as structure is concerned, first of all, in form, SWOT analysis is to construct a SWOT structure matrix and give different analytical significance to different areas of the matrix; Secondly, the main theoretical basis of SWOT analysis also emphasizes the analysis of the external environment and internal resources of enterprises from the perspective of structural analysis. In addition, as early as the 1960s before the birth of SWOT, some people put forward the internal strengths, weaknesses, external opportunities and threats involved in SWOT analysis, but only analyzed them in isolation. The important contribution of SWOT method lies in matching these seemingly independent factors with systematic ideas for comprehensive analysis, which makes the formulation of enterprise strategic plan more scientific and comprehensive. Since its formation, SWOT method has been widely used in enterprise strategic research and competitive analysis, and has become an important analytical tool for strategic management and competitive intelligence. Intuitive analysis and simple use are its important advantages. Even without accurate data support and more professional analysis tools, we can draw convincing conclusions. However, it is this intuition and simplicity that makes SWOT inevitably have the defect of insufficient accuracy. For example, SWOT analysis adopts qualitative methods, and forms a fuzzy description of the competitive position of enterprises by enumerating various manifestations of S, W, O and T, and the judgment made on this basis is bound to be subjective. Therefore, when using SWOT method, we should pay attention to the limitations of this method. When listing facts as the basis of judgment, we should try our best to be true, objective and accurate, provide some quantitative data, make up for the deficiency of SWOT qualitative analysis, and build the foundation of high-level qualitative analysis. In recent years, SWOT analysis has been widely used in many fields, such as school self-analysis and personal ability self-analysis. For example, when you use SWOT to analyze your career development, you can follow the following five steps: First, evaluate your strengths and weaknesses. Everyone has his own unique skills, talents and abilities. In today's very fine division of labor environment, everyone is good at a certain field, not proficient in everything. Unless, of course, you are a genius. For example, some people don't like sitting in the office all day, while others feel numb and nervous at the thought of having to deal with strangers. Please list the things you like to do and your advantages. Similarly, through the list, you can find out what you don't like to do and your weaknesses. Finding your own shortcomings is as important as finding your own advantages, because you can make two choices according to your own advantages and disadvantages; Or try to correct normal mistakes, improve their skills, or give up those departments that need skills that they are not good at. List the strengths and weaknesses that you think you have that have an impact on your study choice, and then mark those that you think are important to you. Step 2: Find out your career opportunities and threats. We know that different industries (including different companies in these industries) face different external opportunities and threats. Therefore, understanding these external factors will help you find a suitable job successfully, which is very important for your job search, because these opportunities and threats will affect your first job and future career development. If the company is in an industry that is often affected by external unfavorable factors, naturally, the company can provide fewer career opportunities, and there is no chance of career promotion. On the contrary, industries full of many positive external factors will provide job seekers with broad career prospects. Please list one or two industries you are interested in, and then carefully evaluate the opportunities and threats faced by these industries. The third step is to outline your career goals in the next 3-5 years, carefully analyze and evaluate yourself with SWOT, and list four or five career goals that you want to achieve most in the next 5 years. These goals can include: what kind of career you want to pursue, how many people you will manage, or what level of salary you want to get. Please always remember: you must try your best to give full play to your advantages and match them perfectly with the job opportunities provided by the industry. The fourth step is to outline the career action plan for the next 3-5 years. This step mainly involves some specific contents. Please draw up an action plan to achieve each goal listed in the third step above, and specify everything you have to do to achieve each goal, and when to finish these things. If you think you need some outside help, please explain what kind of help you need and how to get it. For example, your personal SWOT analysis may show that in order to achieve your ideal career goals, you need to take more management courses. Then, your career action plan should be clear about which courses to take, what level of courses to take and when to take these courses. Your detailed action plan will help you make a decision, just as a plan made in advance before traveling will be your action guide. Fifth, it is not difficult to find professionals to help you analyze the shortcomings in your career development and behavior habits, but it is difficult to change them in a proper way. I believe that your friends, superiors and career counseling experts can give you some help, especially with the help of professional consulting power, you will take shortcuts. With the help and supervision of external forces, you will get better results. 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, there are many strategic consultants.
Defects of SWOT analysis in editing this paragraph
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 checklist to the concept of characteristic 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. Like many other strategic models, SWOT model was put forward by McKinsey a long time ago and has the limitations of the times. In the past, enterprises may pay more attention to cost and quality, but now enterprises may pay more attention to organizational processes. For example, how to transform the old electric typewriter into a printer? Should I be a printer or other mechanical and electrical products? From the SWOT analysis, the advantage of electric typewriter manufacturers lies in electromechanical, but it seems that there are more opportunities to develop printers. As a result, some developed towards printers and died miserably; Some companies have made great progress in razor production. See if you want an opportunistic growth strategy or a competency-based growth strategy. SWOT does not take into account the initiative of enterprises to change the status quo. Enterprises can create their own advantages by looking for new resources, so as to achieve strategic goals that could not be achieved in the past. In the process of using SWOT analysis, you may encounter some problems, which is its adaptability. Because SWOT analysis can be used in too many occasions, it must be adaptable. However, this will also lead to abnormal phenomena. The problems caused by the basic SWOT analysis method can be solved by the more advanced POWERSWOT analysis method.
Implicit hypothesis
Strategic decision-making needs information, and SWOT analysis distinguishes the information needed for strategic decision-making: internal and external, that is, information about the enterprise itself and information about the environment in which the enterprise is located; The distinction of interests refers to the internal advantages (S) and external opportunities (O) that are beneficial to the enterprise, and the internal disadvantages (W) and external threats (T) that are harmful to the enterprise. Undoubtedly, this classification greatly clarifies and simplifies the information that enterprises need to master when formulating strategies, but it also leads to the implicit assumption of SWOT defects. In SWOT analysis, it is generally believed that opportunities and threats only exist in the external environment, while strengths and weaknesses only exist in the internal environment. But in fact, strengths and weaknesses may appear outside the enterprise, and opportunities and threats may also appear inside the enterprise. Penrose pointed out that the development opportunities of enterprises often exist within enterprises, and the remaining productive resources within enterprises are important opportunities for enterprise growth. More importantly, it is often difficult to separate the inside and outside of an enterprise. Chamberlain believes that the capabilities of enterprises are nested in an interdependent network, and the interdependence in this network exists both within the enterprise and between the enterprise and the environment. Barney thinks that environmental analysis usually can't get excess returns. If it gets excess returns, it's luck, because the methods and information of environmental analysis are open and can be obtained by any enterprise. Only by analyzing the unique assets of the enterprise to implement the product market strategy, such as proprietary technology, can we obtain excess returns. Barney's analysis is still divided into internal and external factors. Even if the analysis environment is influenced by internal factors of enterprises, the value of organizational assets can only show its value in a certain environment, and the analysis of internal and external integration can show a more complete strategic picture. If SWOT analysis lists the internal strengths and weaknesses of the enterprise and the opportunities and threats of the external environment in a general and fragmented way, and then establishes some standards for internal and external relations and weaknesses, it is often based on the historical performance of the enterprise's business needs and organizational characteristics. Threats and opportunities can be aimed at the same event, because if the enterprise grasps or handles it well, it will have the opportunity to take the lead, otherwise it may be devastated and this situation may become a crisis. For example, China's accession to the WTO is the case for many China enterprises. Therefore, the strength and weakness of SWOT split the continuous unity of the internal situation of the enterprise, while the distinction between opportunity and threat can not reflect the interests of the same event, thus forming the strategy of the enterprise, which is obviously dangerous and proved to be difficult to operate in practice. The change of enterprise's exterior leads to the change of enterprise's advantage, which also explains the close degree of enterprise's internal and external relations from another side. In other words, the division of internal and external environment is only for the convenience of analysis, not the reality of the enterprise.
Interest differentiation hypothesis
The judgment of advantages and disadvantages is actually a complicated measurement problem. From the point of view of measurement, the measurement of internal and external conditions of enterprises often shows a continuum. The relativity and degree of advantages and disadvantages require the use of SWOT analysis to adopt appropriate measurement standards, which is more objective than clearly distinguishing advantages and disadvantages. However, there is a lack of clear criteria for measuring strengths and weaknesses, opportunities and threats. For example, is the advantage better than the enterprise's own history, early planning and competitors, or is it better than the customer's needs? Stevenson's research shows that there are three criteria for evaluating strengths and weaknesses: historicity, competitiveness and planning. Enterprises use historical and competitive standards to measure their strengths, while planning standards are usually used for weaknesses. Although the evaluation steps adopted by enterprises are similar, there is no unified standard and evaluation has two sides.
Static analysis hypothesis
SWOT analysis usually scans the inside and outside of an enterprise at a certain point, and then analyzes the strengths, weaknesses, threats and opportunities, thus forming four internal and external matching strategies, namely SO strategy: relying on internal advantages and utilizing external opportunities; ST strategy: using internal advantages to avoid external threats; WO strategy: using external opportunities to overcome internal weaknesses; WT strategy: reduce internal weaknesses and avoid external threats. Although some scholars have different specific explanations for each kind of matching, it is difficult to ensure that the internal and external matching that does not actually happen will be realized in the current static analysis of the strengths, weaknesses, opportunities and threats of enterprises, for example, whether the advantages of enterprises are strong enough to seize opportunities and confront threats, and whether the disadvantages of enterprises are weak enough to miss opportunities and bear threats. For example, SO strategy includes two strategic planning processes, namely, the external-oriented strategic planning process (five-force analysis → industrial positioning → value activities → driving factors) and the internal-oriented strategic planning process (identifying resources and capabilities → evaluating resources and capabilities → utilizing resources and capabilities → filling resource gaps). In the period of stable external environment of enterprises, it has a certain guiding role in the strategic formulation of enterprises, but in the period of turbulent external environment of enterprises: the industrial structure is vague, the resources and capabilities of enterprises are no longer effective, and the static analysis and internal and external matching of SWOT are difficult to have practical significance. In other words, SWOT analysis is not helpful to formulate an intertemporal development strategy including industrial evolution and capacity evolution. SWOT analysis implies confidence in people's rational ability, and mechanical internal and external matching strategy ignores that internal and external matching is often a process of trial and error and learning. To sum up, the assumptions implied in SWOT analysis can be said to have the advantages of simplifying information classification, but also the disadvantages of not fully grasping information, which can be said to be a potential threat to people who use SWOT. However, the strategic management research in recent years has provided us with rich opportunities for SWOT analysis and understanding.
Common errors in editing this paragraph
The following two common mistakes are easy for beginners to make in SWOT analysis. Sometimes such mistakes can seriously mislead the analysis results. Before the overall goal is unclear and the understanding is not in place, SWOT analysis is carried out. When the overall goal of the enterprise or project has not been determined, the members of the SWOT team may have their own ideas, leading to the collapse of the SWOT analysis, and the final analysis results cannot be implemented, because the main goal may be three or five, or even constantly changing, and there will be a multi-headed carriage. This phenomenon is not caused by the overall goal not being put forward; Sometimes the goal may have been put forward, but everyone only knows the situation in their minds, without sharing and confirming it, which leads to misunderstanding. Take SWOT analysis as a feasible strategy. SWOT analysis is only an objective statement of the present situation. Perhaps most people can objectively state their strengths, weaknesses and threats, but in the opportunity quadrant, many people will write strategies instead of phenomena. Try to think of the opportunity as:? Ideal situation? The description of "since conditions" will help to push out the next strategy.
Edit the SWOT analysis steps in this paragraph.
(1) What is the current strategy? (2) Confirm the changes of the external environment of the enterprise (Porter's Five Forces or PEST) (3) Confirm the key capabilities and key limitations of the enterprise according to the combination of enterprise resources (4) Divide all the identified advantages into two groups according to the general matrix or similar methods, and divide them according to the two principles of whether they are related to potential opportunities or potential threats in the industry. Similarly, divide all the disadvantages into two groups, one related to opportunities and the other related to threats. Or use SWOT analysis table to fill in the form according to opportunities and threats. (5) Positioning the results on the SWOT analysis chart (6) Strategic analysis.
Edit the SWOT analysis of this paragraph: strength-weakness-opportunity-threat.
From the perspective of competition, the choice analysis of cost measures comes not only from the analysis and judgment of internal factors of enterprises, but also from the analysis and judgment of competitive situation. The core idea of SWOT analysis is to find out the opportunities and risks that enterprises can take advantage of by analyzing the external environment and internal conditions of enterprises, and combine these opportunities and risks with the advantages and disadvantages of enterprises to form different strategic measures for enterprise cost control. The basic steps of SWOT analysis are as follows: (1) Analyze the strengths and weaknesses within the enterprise, which can be compared with the enterprise goals and competitors. (2) Analysis of external opportunities and threats faced by enterprises may come from changes in external environmental factors unrelated to competition, or from changes in the strength and factors of competitors, or both, but key external opportunities and threats should be confirmed. (3) Match external opportunities and threats with internal strengths and weaknesses of enterprises to form feasible alternative strategies. There are four different types of SWOT analysis: strength-opportunity (SO), weakness-opportunity (WO), strength-threat (ST) and weakness-threat (WT). Advantage-opportunity strategy is a strategy to develop the internal advantages of enterprises and make use of external opportunities, and it is an ideal strategic model. This strategy can be adopted when an enterprise has an advantage in a certain aspect and the external environment provides a favorable opportunity to give play to this advantage. For example, external conditions such as good product market prospect, expanding supplier scale and financial crisis of competitors, combined with internal advantages such as increasing market share of enterprises, can become favorable conditions for enterprises to acquire competitors and expand production scale. The disadvantage-opportunity (WO) strategy is a strategy that makes use of external opportunities to make up for internal disadvantages, so that enterprises can turn disadvantages into advantages. There are external opportunities, but there are some weaknesses in the enterprise that hinder it from taking advantage of opportunities. Measures can be taken to overcome these weaknesses first. For example, if the weakness of an enterprise is insufficient supply of raw materials and insufficient production capacity, from the cost point of view, the former will lead to insufficient start-up, idle production capacity and rising unit cost, while overtime will lead to some extra expenses. On the premise of optimistic product market prospects, enterprises can take advantage of opportunities such as expanding supplier scale, lowering prices of new technologies and equipment, and financial crisis of competitors to realize vertical integration strategy, reconstruct enterprise value chain and ensure the supply of raw materials. At the same time, they can consider buying production lines to overcome shortcomings such as insufficient production capacity and aging equipment. By overcoming these weaknesses, enterprises can make further use of various external opportunities, reduce costs, gain cost advantages and finally win competitive advantages. Superiority threat strategy means that enterprises use their own advantages to avoid or mitigate the impact of external threats. For example, competitors use new technologies to greatly reduce costs, which brings great cost pressure to enterprises; At the same time, the supply of materials is tight, and its price may rise; Consumers demand a substantial improvement in product quality; Enterprises have to pay high environmental protection costs; And so on, all these will lead to the further deterioration of the cost situation of enterprises, making them in a very unfavorable position in the competition. However, if enterprises have sufficient cash, skilled workers and strong product development capabilities, they can use these advantages to develop new technologies, simplify production processes, improve the utilization rate of raw materials, and thus reduce material consumption and production costs. In addition, developing new technology products is also an optional strategy for enterprises. The development and application of new technologies, new materials and new processes are the most potential measures to reduce costs and improve product quality, thus avoiding the influence of external threats. Weakness-Threat (WT) strategy is a defense technology, which aims to reduce internal weaknesses and avoid external environmental threats. When enterprises are faced with internal troubles and foreign invasion, they often face survival crisis, and reducing costs may become the main measure to change their disadvantages. When the cost situation of enterprises deteriorates, the supply of raw materials is insufficient, the production capacity is insufficient, the scale benefit cannot be realized, and the equipment is aging, it is difficult for enterprises to make great achievements in cost. At this time, enterprises will be forced to adopt target aggregation strategy or differentiation strategy to avoid cost disadvantages and threats caused by cost reasons. The application of SWOT analysis method to the analysis of enterprise cost strategy can give full play to the advantages of enterprises, take advantage of opportunities to overcome disadvantages, avoid risks, gain or maintain cost advantages, and base the enterprise cost control strategy on the analysis of internal and external factors and the judgment of competitive situation. If you want to fully understand the strengths, opportunities, weaknesses and risks that the enterprise is facing or will face; Value chain analysis and benchmarking analysis provide methods and approaches for it.