Encyclopedia of Marketing

SWOT analysis is

So, what is this SWOT analysis?

SWOT analysis is one of the most widespread analytical methods that allows to assess the strengths and weaknesses of a company, as well as the opportunities and threats that affect it, in a complex.

  • S (strengths) - strengths. Business characteristics that set it apart from competitors. For example: better customer service on the market, more affordable prices.
  • W (weaknesses) - weaknesses. Signs that make a company vulnerable in the market.

For example: ineffective advertising, insufficient employees.

  • O (opportunities) - opportunities. The company can use them to develop its business.

For example: correct production location.

  • T (threats) - threats. They can harm the company.

For example: high competition in the market.

What is it for?

How to write a business plan. Advice. For what purposes are business plans developed. Structure, composition, sections. Writing rules. (10+)

Business plan. Structure. Compilation. Tips

What is a business plan for?

Doing business is a multifaceted process that depends on a huge number of different factors. The main danger is to overlook something important. You will definitely do this if you do not plan everything carefully in advance.

A business plan allows you to cover all the essential aspects, not to miss the details, to pay attention to all the really important facts. It doesn't matter if you are starting a new business or starting a new year of an already functioning company. A business plan will allow you to understand future results from the beginning, optimize costs, and clearly know what and when to do.

During the year you will understand if everything is going according to plan. If something goes wrong, you will find it immediately. You will have the opportunity to correct the situation.

You may need to get a loan. The bank will certainly take an interest in your business plan. In my practice, there have been many cases when it was possible to obtain financing under only a competent business plan, without collateral and surety.

Your partners (shareholders) are interested in forecasting financial performance and in step-by-step control over the implementation of the plan. The business plan provides such an opportunity. Having a competent business plan allows you to attract equity capital and find interesting partners.

Employees may be privy to some aspect of your business plan. Then they will understand where the business is heading, what perspectives and opportunities they have.

Here are three main reasons to write a business plan:

  • A business plan will make you wealthy. At the end of the year, you will have a planned profit.
  • A business plan will make your business attractive to investors, partners and employees. A business plan is a prerequisite for obtaining a loan for business development. Shareholders also want to see a business plan for the year. Employees and counterparties are interested in having a business plan (although not all parameters of a business plan are publicly available), since the presence of a business plan makes it possible to count on business sustainability.
  • The business plan will make you sighted. You will clearly understand if everything is going as you expected, or if there are deviations, corrective efforts are needed.

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Developing a marketing plan: SWOT analysis

Infowave Research Company

Have you ever wondered what a good military leader does before a fight? He studies the field of the upcoming battle, looking for all the winning heights and dangerous swampy places, evaluates his strength and the strength of the enemy. If he doesn't, he will condemn his army to defeat.

The same principles work in business. Business is an endless series of small and large battles. If you do not assess the strengths and weaknesses of your enterprise before the battle, do not identify the market opportunities and threats (the very uneven terrain that become of great importance in the heat of the battle), your chances of success will dramatically decrease.

In order to get a clear assessment of the strengths of your company and the market situation, there is a SWOT analysis.

SWOT analysis is the definition of the strengths and weaknesses of your enterprise, as well as the opportunities and threats emanating from its immediate environment (external environment).

Strengths - the strengths of your organization;

Weaknesses - the weaknesses of your organization;

We continue to write our business plan and move on to the next item - SWOT analysis. So far, we have completed the title page and also set the core of the business plan in the form of a short summary. Then they wrote about the business and the company, described the products and services, made a market and industry analysis. Now is the time to see our real positions, which is very important before starting your business from scratch.

SWOT analysis in business plan

Are we to say that this analysis does not have to be final and can be adapted after writing other sections? I think you already understood - this is a planning process, and while we have a working version, changes are not only possible, but even welcome.

SWOT analysis is an element that should bring reality to your business plan. Why reality? Based on the SWOT analysis, we must look at how realistic we analyzed and planned, see our strengths and weaknesses, as well as opportunities and threats. The abbreviation SWOT comes from the first letters of the following words:

Strengths - strengths, advantages;

Weaknesses - weaknesses, disadvantages;

Opportunities - chances, opportunities;

Threats - threats, dangers.

This section of the business plan is small in volume and takes no more than one page. But the analysis process itself is complex and will take a lot of time.

The best solution is to conduct a SWOT analysis in 3 steps:

  • Scanning and analysis of the internal and external business environment.
  • Construction of the SWOT matrix.
  • Define strategies.

Analysis of internal and external business environment as part of SWOT analysis

Analysis of the internal and external business environment should include all material facts that have or will have an impact on the efficiency of the business.

SWOT analysis How to evaluate the viability of a business idea

It has long been customary to analyze management decisions, business ideas, strategies and projects using SWOT analysis. This method is quite simple, but very effective, since it makes it possible to determine the potential opportunities and weaknesses of the project. SWOT is an abbreviation that stands for the following words: strengths (strengths), weaknesses (weaknesses), opportunities (opportunities), threats (threats). By comparing all the factors affecting a company's operation or product release that fall into these categories, you can try to eliminate negativity and strengthen the strengths before launch.

SWOT analysis of the external and internal environment of the organization

Internal environmental factors include strengths and weaknesses. That is, these are any characteristics of a future project that add the chances of success and give advantages in the market and what the project lacks, but what competitors have. That is, strengths can be written, for example, super-professional team members, personal connections of the founder with potential customers (buyers) or the presence of a client base. This also includes a good financial resource, a profitable loan or the possibility of using an investment cushion. Weak points also need to be written honestly. Here, directly opposite factors may appear, for example, the impossibility of completing a product due to a small amount of financial resources or a lack of a customer base.

Environmental factors include the categories of opportunity and threat. This is all that influences the project from the outside, gives additional advantages to the business idea or reduces its chances. For example, the growth or decline of the market segment in which it is planned to start working, a favorable economic situation in the country, increased investor interest in this market segment, or, conversely, a crisis and fading attention.

Factors are written in the table in the following form:

Positive impact Negative impact Internal environment Strengths (properties of a project or team that give advantages over others in the industry) Weaknesses (properties that weaken the project) External environment Opportunities (external probable factors that give additional opportunities to achieve the goal) Threats (external probable factors that can complicate the achievement of the goal)

That is, among the external factors there may be market trends, sales structure, competitive environment, barriers to market entry. As well as legislation and political situation, economic situation of the country, region, socio-demographic factors, change in technology, international environment, ecological environment.

Internal factors should be looked for in the following list: management, marketing, personnel, analysis of the company's sales system, analysis of the product portfolio, analysis of competitors' activity, the presence of a sustainable competitive advantage, analysis of pricing policy. SWOT analysis does not imply the mandatory use of specific financial or economic categories. Therefore, this method is applicable in a variety of situations, to build strategies for any kind of organization.

Sample SWOT Analysis

Let's say an individual entrepreneur plans to sell homemade pies to grandmothers in small wholesale so that they can then resell them at retail.

A SWOT analysis of this business idea might look like this:

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