Swot external environment. How to use SWOT analysis as a financial director. Where to get information to conduct a SWOT analysis

From this article you will learn:

What types of SWOT analysis method exist?

In what case should you not use SWOT method-analysis

The SWOT analysis technique has become very popular due to its simplicity and wide applicability. It can be used to assess the likely consequences rational decisions in almost any area: both in business when developing a company development strategy, choosing a marketing policy, etc., and in privacy. The SWOT analysis method assumes that the situation has been studied and understood before making a decision. Let's take a closer look at it.

What is the essence of the SWOT analysis method?

SWOT analysis is a way to assess the current situation in a business and the prospects for its development, identifying four key aspects: Strengths – strengths, Weaknesses – weak sides, Opportunities - opportunities and Threats - threats.

Two of them - strengths and weaknesses - characterize the condition internal environment company at the time of analysis. The remaining aspects - threats and opportunities - relate to the external environment in which the business operates and which the entrepreneur or head of the company cannot directly influence.

The method of conducting SWOT analysis allows you to describe the situation clearly and structuredly, to draw a conclusion about whether the company is developing in the right direction, what risks should be protected from and how exactly to do this, what is the potential of the enterprise.

The SWOT analysis method is based on four main questions:

What can a businessman (organization) do?
What would he like to do?
What is even possible in the current conditions?
What actions does its environment – clientele, partners, contractors – expect from the company?

By answering these questions, you can determine:

the advantages of the company, its trump cards that can be used in the development strategy;
vulnerabilities that can be eliminated or compensated;
prospects, open paths company development;
dangers and ways to protect yourself from them.

Why do you need the SWOT analysis method?

SWOT analysis is a simple and universal method widely used in entrepreneurial activity and not only. In business, when planning and developing a strategy, it can be used either separately or in conjunction with other marketing tools, which makes it very convenient for company managers and private entrepreneurs.

Outside of business, the SWOT analysis method allows you to identify priority areas of effort (this applies to both professional and personal development), find your true life goals and priorities in labor activity and relationships.

In relation to business, SWOT analysis is used to:

collecting, summarizing and analyzing information about competitors using Porter models, PEST and other marketing methods;
creation step by step plan implementing the business strategy, developing its main directions and appointing persons responsible for implementation;
competitive intelligence (searching for the strengths and weaknesses of competitors) to form effective strategy development.

Thus, wherever necessary, highlight the strengths and weaknesses of something ( commercial activities, enterprises, individuals), there is a place for the SWOT analysis method. Its product can be either a business strategy or a program for professional or personal growth.

Types of SWOT analysis method

Express version of SWOT analysis. It occurs most often and is used to detect the main strengths of a company and its vulnerabilities. External threats and opportunities are also identified. This type of method is the easiest to use and gives a clear result.
Summary SWOT analysis. It focuses on accounting and systematization of the main indicators of business performance at the current moment and its prospects in the future. A summary SWOT analysis is good because it allows you to quantify factors that were identified by other methods included in the toolkit strategic analysis, formulate a strategy and action plan aimed at achieving the main goals of the company.
A mixed SWOT analysis is an option that combines the first two. There are at least three varieties of it, in which the influencing factors are structured in the form of tables and form a cross matrix. However, the analysis of these types does not provide quantification certain indicators. Thanks to the summary SWOT, you can deeply explore the data obtained and come to an accurate result.

SWOT analysis method as an example

The main matrix of SWOT analysis is as follows:

Consider this situation: individual entrepreneur is going to sell pies to grandmothers in small quantities (and they, in turn, will resell them to the final buyer).

Here's how you can apply the SWOT analysis method to it:

Note that if target audience there will be, for example, schoolchildren buying pies for themselves (and not grandmothers-traders), then the SWOT analysis needs to be carried out again, since the source data has changed.

Project analysis using the SWOT method

First of all, decide what goals you are going to achieve through the method, what tasks are facing you. If the project is devoid of goals and is vague, the SWOT analysis will fail: there will simply be nowhere to get the source data.

Find potential strengths in your future (or existing) business. Make them up full list and start analyzing each of them. What characteristics and features make your idea realistic and promising? Are the means and tools with which you intend to implement your strategy effective, and in what way? How good an entrepreneur (or leader) are you? What resources and assets are available to you? What do you manage to do better than your competitors? In general, conduct an audit and assessment of your capabilities.

Then, using the same method, you need to analyze the shortcomings of the business project under consideration. What factors hinder the solution of current problems? What business skills do you personally lack and how can you “upgrade” them? What is the main vulnerability of your company and you personally as a person and leader? What factors should be avoided? What can prevent you from taking advantage of opportunities and advantages to achieve your goals?

The next stage of the SWOT analysis is to compile a list of available prospects for your project. You probably already actively use some of these favorable environmental factors to promote and optimize your business; list them. Don't forget about potential opportunities. Describe the market situation in your niche. Think about what tools, means, methods and advantages can be applied to make your project unique and in demand.

After this, proceed to a description of existing external dangers and threats. Which of these factors are preventing or could prevent you from achieving your intended result? How many of your competitors, enemies, ill-wishers are there that can harm your business and prevent it from developing? In the SWOT analysis method, threats and opportunities always relate to the external environment, while strengths and weaknesses always relate to the project itself.

When all the lists have been compiled, begin to form conclusions and conclusions. They must give answers to a number of important issues about how to competently use your strong positions, how to eliminate shortcomings and problem areas, how to take advantage of new opportunities in practice, how to minimize risks and avoid dangers.

Listing, cataloging and studying these four groups of factors is not main part SWOT analysis method. All the most important things happen later, when the data has already been collected and structured: finding ways to turn problems into advantages, turn weaknesses into strengths, and make external threats serve to benefit your business.

If at this stage it becomes clear exactly what measures and steps need to be taken, be sure to plan them for the near future and actively begin to implement them.

Rules of the SWOT analysis method

SWOT analysis seems to be a simple, even primitive method, but in practice, constructing a matrix can be difficult. The problem lies in the quality of the initial data: if they are outdated, or were initially unreliable (which often happens when we collect information about the external environment), or are too abstract and generalized, then the method will not lead to the desired result.

That's why practical use SWOT analysis requires compliance with some important rules:

Limit the scope of your research in each quadrant. Analysis of the business as a whole will turn out to be too divorced from practice and, as a result, useless, because in order to develop a strategy, information on very specific aspects of the functioning of the enterprise is required. It is worth focusing on each of them and subjecting them to SWOT analysis.
Decide on the wording: what you will consider a strength, what a weakness, and what you will classify as opportunities and risks. Internal factors - the strengths and weaknesses of the company - can be controlled directly, but it is impossible to influence external ones. Therefore, these areas - inside and outside the business - must be clearly separated, and, for example, internal problems should not be classified as threats, and opportunities should not be classified as strengths.
When analyzing strengths and weaknesses, look at your project from the outside, like a client or competitor. If something is an advantage for the consumer and motivates him to buy the company's products, then this is a strength.

If some services or product items offered by your company are more popular than similar products and services of competitors, this is also a business advantage. That is, both strength and weakness are determined by the market, and not by the manager-analyst’s ideas about what is right. When the list of advantages and disadvantages grows too long, it is useful to rank them by importance (from the consumer's perspective).

Use diverse but reliable information sources. Try to be objective when conducting a SWOT analysis. Best option: first carry out extensive marketing research, and then use this method, but this is not always available. However, you can carry out monitoring on your own (using questionnaires, analyzing publications about the company in the media, etc.).

This task should be carried out by several people, since each person's personal preferences significantly limit the scope of the parameters considered. During the collection and analysis of data, it is advisable to exchange ideas and guesses so that the work is group work.

Formulate your thoughts as clearly and specifically as possible, avoid ambiguity and unnecessary phrases. The quality of application of SWOT analysis as a method depends on the accuracy and capacity of the formulations. For example, the term “modern equipment” is very vague: it can hide new machines in the workshops and new technologies for communicating with suppliers.

identifying the dynamics of the enterprise’s position in the market environment, among competing firms;
taking into account the results of a more in-depth analysis of the company’s activities and building strategic plans in accordance with them;
creating several market behavior strategies (for the most likely scenarios).

These could be options such as eliminating threats (third and fourth quadrants of the SWOT matrix), continuing the current course (without changes, since everything is fine), optimizing the use of resources and developing reserves (first and second quadrants).

Short story SWOT
Why and when to conduct a SWOT analysis
S.W.O.T. Detailed analysis components
Actions based on the results of the SWOT analysis
Examples of successful and unsuccessful SWOT analysis
From SWOT to TOWS? How to deploy the algorithm and achieve the best results
SWOT Templates

What is SWOT?

SWOT is an acronym that stands for Strengths, Weaknesses, Opportunities and Threats.

SWOT analysis is a methodological tool designed to help companies and their employees optimize productivity, increase competitiveness, maximize potential and minimize risks. The SWOT model helps you make better decisions - both large and small. It allows you to evaluate the effectiveness of actions - from the launch of a new product or service to a merger with another organization or the acquisition of a subsidiary. SWOT is a method that, when used correctly, gives only positive results.

The Fundamental Guide to SWOT Analysis was designed, written and designed by Justin Homer and Jackson Hille.

Justin Homer lectures at the University of California, Berkeley and will soon publish two books.

Jackson Hille is one of the FormSwift partners and a recipient of a Certificate of Excellence in American Studies from the University of California at Berkeley.

The guide contains all the information a SWOT specialist needs. It describes examples of the use of SWOT by prominent companies (for example, Dreamworks and Uber), carefully examining all the components and applications of the analysis. Free templates are provided at the end. The guide will be useful to everyone, including heads of creative startups and entertainment companies, specialists in strategic planning in non-profit and government organizations, as well as private entrepreneurs involved in the sale of real estate or the restaurant business.

Who is this guide intended for?

SWOT is a method that can be used for any business goal, large or small. If you run a Fortune 500 company and are trying to determine value special offer or assessing your position to chart an individual trajectory, the guide will serve you well.

Why do you need a manual?

Your company is at risk! You risk freezing in place! Lack of movement can destroy any business, and SWOT analysis is an effective antidote. This guide reveals all its intricacies.

It is written in accessible language and contains concise but effective examples. More importantly, it is backed by extensive research on the use of SWOT, the results of which have been published in leading business magazines.

How to use the guide?

This guide looks at the SWOT method from a variety of perspectives that can be understood by people with varying degrees of awareness.

If you are just starting out with SWOT, we recommend that you read the entire text from beginning to end to better understand the history of the method and its scope.

If you are already familiar with SWOT, you can review the basics or skip to the section you need (for example, about using the method in a certain type of organization). You might find our templates useful. Use the guide as you wish!

Summary and examples of using SWOT

In 1960, several American corporations launched a project at Stanford University to develop an improved method of strategic planning. This is how SWOT was born.

It is suitable for:

rethinking the company's position in the market (Weaknesses, Threats - Disadvantages and Risks from competitors);
determining the company's strengths (Strengths - Advantages);
searching for new areas of development (Opportunities - Opportunities).

It's all SWOT!

Although "SWOT was originally developed for business needs," "it can be used for the health and development of the community as a whole, and even for personal needs."

Below are examples of the use of SWOT analysis in a company that provides taxi services using mobile application.

Uber + Lyft

SWOT Example

Strengths

Using a special application to find drivers and clients and a cashless payment system greatly simplifies the work process.
Lack of staff and dispatchers
reduces costs.
Drivers use personal cars, so the company has access to a huge fleet Vehicle that do not require maintenance.
Drivers have full control over their schedule.

Weaknesses

The business model is easy to copy.
Using GPS to track the location of drivers and customers creates privacy risks.
The flow of customers is unpredictable and changes quickly.
The company does not establish relationships with drivers, so the level of loyalty is extremely low.

Opportunity

In the next example, we will look at the birth of companies providing taxi services using mobile applications.

Let's imagine how the emergence of Uber and Lyft affected the activities of service companies traditional way. Usage latest technologies allowed them to easily penetrate the market.

They can expand to new sites (cities) or provide additional transportation services (for example, launch school buses).

Risks

The use of mobile apps has not only opened up new opportunities for Uber and Lyft, but also created serious risks for existing companies that have not mastered the latest technologies.

SWOT is often mistakenly used to justify existing practices. If you are conducting an analysis to find areas for development, you need to clearly identify any shortcomings.

Comments on individual companies

Uber services can only be used in some metropolitan areas, so the next stage of development may be to cover smaller cities and suburbs. However, the main threat to Uber comes from numerous complaints and proposals to legally prohibit the company's activities.

Dreamworks

DreamWorks has achieved a dominant position in the 3D animation industry due to two main advantages - large reserves (for example, the Shrek franchise) and an attractive work environment suitable for creative employees.

Logan decided that a busy training schedule and a trip to an international tournament could provide the team with new opportunities to gain experience, and the youth and potential injuries of the players posed significant risks.

Restaurant: By adding online food ordering and delivery, a business could gain new opportunities, while the opening of new restaurants and changes in food costs (for example, higher prices for fish) would pose a serious threat to it.

Construction firm: In terms of new opportunities, the firm could study the city's plans to expand the system public transport and explore how this expansion would impact the scale of private and corporate construction.

And here we come back to the basic tenet of SWOT: analysis is only useful when you compare yourself to your competitors.

Uber + Lyft

SWOT Example

Let's go back to the Uber and Lyft example. The services themselves arose under the pressure of mobile technologies on traditional companies that provided taxi services. If any of them had recognized this Risk earlier, they would have realized that a mobile offering could provide customers with the ability to get from one point to another efficiently and quickly.

By turning a Risk into an Opportunity, a company could evaluate its Weaknesses in relation to the existing Risk (in in this case- lack of investment in technology or underdeveloped infrastructure for a mobile application), and then draw up a strategic plan to eliminate the Disadvantages and use the Advantages (in this case, the experience of full-time drivers, knowledge of routes, etc.) to get ahead of competitors.

1. Brief history of SWOT

SWOT analysis was the product of years of research conducted by Stanford University in the 1960s and 1970s. By the end of the 1950s, many American companies were frustrated by the lack of results from investments in strategic planning, so in 1960 some of them launched a project to develop new methods. This is how SWOT was born.

2. SWOT analysis

When to do a SWOT analysis

When should you conduct a SWOT analysis? SWOT analysis is beneficial in countless ways.

Do you want to know how effective a new initiative, product or acquisition is?
Do you need a solution to a specific business problem?
Do you want to evaluate an existing and ongoing strategy?
You have extra funds that need to be invested profitably?
Are you a non-profit or government organization that has received a large grant or donation and you don't know how to spend the money?
Do you have new competitors? Do you need to evaluate a potential merger with another organization?
Do you want to more accurately formulate your mission or social significance?

If you answered yes to at least one question, a SWOT analysis will definitely help you!

Ultimately, it will be useful in any situation that requires assessing the current state of affairs in the market (Disadvantages and Risks), identifying strengths (Advantages) and directions for development (Opportunities).

Why do a SWOT analysis?

Why is SWOT needed? SWOT analysis allows a company to accurately assess its position in its industry. Members working group in Health Promotion and Community Development from the University of Kansas point out that “having situational information facilitates effective strategic planning and allows for better decision making.”

“Simple and applicable in any context,” a SWOT analysis provides similar information so its results can be used to create a strategy that takes into account internal strengths and external opportunities and focuses on correcting (internal) weaknesses and eliminating (external) risks. Moreover, although “SWOT was originally developed for business needs,” “it can be used for the health and development of the community as a whole, and even for personal needs.”

3. S.W.O.T. Detailed analysis of components

Having determined the subject of analysis, you can begin to analyze all components. SWOT consists of four components - Strengths, Weaknesses, Opportunities and Risks. All of them are divided into two categories - external and internal. Internal components include Advantages and Disadvantages, external components include Opportunities and Risks.

Domestic		External
Strengths	Weaknesses	Opportunities	Risks

Strengths

Once you've identified your main research question (for example, "Should I add Product X to the new line?"), try to articulate the benefits. Any organization must be stable and reliable. Charlie Ioannou defines advantages as “the resources and productive capabilities that can be used to obtain competitive advantage(Ioannue, SWOT Analysis - An Easy to Understand Guide, 47-49).

This definition makes you think about the most important aspect of evaluating Benefits, which is comparing yourself to your competitors. In other words, it is necessary to highlight the unique qualities of your company (for example, long life, a proven brand, low production costs, high quality services, strong online presence, etc.) These will be your Advantages.

Weaknesses

After this, it is necessary to identify existing shortcomings. Be honest with yourself. On the one hand, disadvantages are the absence of advantages. So, if one aspect of your business isn't a strength, it's probably a weakness. Cash flow, brand awareness, marketing budget, sales system, age of the company - weaknesses can be found in all of these. The main goal is to turn weaknesses into strengths, but this requires honesty that the organization needs improvement.

Having considered the internal components (Advantages and Disadvantages), let's move on to the external ones (Opportunities and Risks). Opportunities and Risks interact with each other in the same way as Advantages and Disadvantages. They have similar (external) dynamics that make it possible to evaluate them.

Opportunities

Opportunities are prospects for growth, greater profits and market share. Again, the evaluation is made in comparison with competitors. What capabilities differentiate your company from competitors? What capabilities would allow you to offer the same products or services, but more High Quality or at a lower price? What customer needs are you still not meeting?

Technology is an external factor that always presents new opportunities and, as discussed below, creates new risks. What technological innovations could reduce the cost of goods or services, speed up production or distribution, or improve the customer experience?

Remember that opportunities always involve action. If you don't act, your competitors will.

Risks

Finally, determine which aspects of your business are at risk. Are competitors developing similar products? Are they poaching yours? best employees? Such actions threaten your business.

Harvard Business Reviews defines Risks as “possible events that you cannot control, and if they happen, you must have a plan to mitigate the consequences.”

Do you know latest changes in legislation? Didn't you come out recently? new law increasing your costs? What about taxes? All of this can be considered a Risk.

Finally, technological innovations that provide new opportunities may create additional risks.

For example, you may be sued for insurance obligations or demand to legally prohibit the company's activities.

4. Actions based on the results of the SWOT analysis

Choosing an action plan based on the results of the analysis is a complex process that must take into account the specifics of the company. However, there are general concepts about what approach should be taken. Here he is:

Enjoy the Benefits
Eliminate Disadvantages
Identify Risks
Invest in Opportunities

In addition, it must be remembered that the main purpose of a SWOT analysis is to assess the current state of affairs. As researchers from the University of Kansas write, it is necessary to look for new boundaries, not excuses. SWOT is often mistakenly used to justify existing practices. If you are conducting an analysis to find areas for development, you need to clearly identify any shortcomings.

5. Examples of SWOT analysis for companies from different industries

Tech startup

Leadership, Management, Company Management

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SWOT analysis - 4-step instructions

For greater clarity, we will divide the SWOT analysis process into steps, each of which is represented by several questions. Answering these questions is, in essence, the process of conducting a SWOT analysis. So.

Step 1 — Scanning the business environment

In this step, by looking at our business environment, we must identify the factors that influence or may influence our business. All factors can be divided into internal and external. To determine these factors, answer the following questions:

1. What legal factors (laws and other regulations) affect (or may affect) my business?

2. What environmental factors affect (or may affect) my business?

3. What political factors affect (or may affect) my business?

4. What economic factors affect (or may affect) my business?

5. What geographic factors affect (or could affect) my business?

6. What social factors affect (or may affect) my business?

7. What technological factors affect (or could affect) my business?

8. What cultural factors influence (or may influence) my business?

9. What market factors influence (or may influence) my business?

The answers to the first 9 questions give you information about external factors, i.e., about those impacts on your business that exist in your environment regardless of the existence of your business. All of these questions, one way or another, are worth asking yourself in order to fully understand what could have any impact on your business. Of course, different factors will have different effects in different business areas, but this is exactly what you will understand by answering these questions.

10. Does (or can it influence) the competition factor affect my business?

11. Does (or can it influence) the management and business management factor affect my business?

12. Does the chosen business strategy factor (or can it influence) my business?

13. Does the business structure factor affect (or can it affect) my business?

14. Does the employee factor affect (or can it affect) my business?

15. Does the factor of my business goals influence (or can influence) my business?

16. Does (or can it influence) the leadership factor affect my business?

17. Does the operational management factor affect (or can it affect) my business?

18. Does the technology factor in business affect (or can it affect) my business?

Answers to questions 10 to 18 will give you information about the overall impact of your business's entry into the marketplace. The list may not be exhaustive; a lot depends on the field of activity, but these are the main points.

And so, having answered the above questions, you will have an almost complete set of factors on which your business depends to one degree or another. Next, you should analyze them and draw the right conclusions for yourself. In this regard, we move on to the next step of our instructions on how to do a SWOT analysis.

Step 2. Analysis of the business environment

In this step of the SWOT analysis, we must analyze in more detail all the factors listed above and understand what they actually represent for us and our business. Let's do this, as you guessed, in a few questions. Here they are:

19. Which legal factors could be a threat to our business and which could be an opportunity?

20. Which political factors could be a threat to our business and which could be an opportunity?

Accordingly, the question “how to do a SWOT analysis” is of particular importance in the life of an entrepreneur. Today we will talk about how to do a SWOT analysis. Or rather, we will develop such step-by-step instructions - a questionnaire, after which the same question () will be completely closed for you.

First, let's look at what a SWOT analysis is (I apologize in advance to those for whom this is unnecessary). SWOT analysis is a tool for planning and comparing four business elements. These elements are: Strengths (strengths), Weaknesses (weaknesses), Opportunities (opportunities) and Threats (threats). A properly done SWOT analysis provides an entrepreneur with a huge amount of useful information necessary to make the right business decisions.

Learning to do swot analysis

SWOT analysis - 4-step instructions

Step 1 — Scanning the business environment

1. What legal factors (laws and other regulations) affect (or may affect) my business?

2. What environmental factors affect (or could affect) my business?

3. What political factors affect (or may affect) my business?

4. What economic factors affect (or may affect) my business?

5. What geographic factors affect (or could affect) my business?

6. What social factors influence (or may influence) my business?

7. What technological factors affect (or could affect) my business?

8. What cultural factors influence (or may influence) my business?

9. What market factors influence (or may influence) my business?

The answers to the first 9 questions give you information about external factors, i.e., those impacts on your business that exist in your environment, regardless of the existence of your business. All of these questions, one way or another, are worth asking yourself in order to fully understand what could have any impact on your business. Of course, different factors will have different effects in different business areas, but this is exactly what you will understand by answering these questions.