Introduction
Chapter 1. The concept of the analysis of the strengths and weaknesses of the enterprise and the methodology for its implementation ................................... .................................................. ..................... 5
Chapter 2. Practical part ............................................. ................................. 9
2.1. Organizationally - economic characteristic CJSC Belgorodsky Cement ............................................. .................................................. .............................. 9
2.2. Analysis of the strengths and weaknesses of Belgorodsky Cement CJSC ............ 14
2.2.1. Competition Analysis ................................................ ............................... 14
2.2.2. Marketing and sales system .............................................. .................... 15
2.2.3. Financial analysis ............................................... ............... eighteen
2.2.4. Summary analysis of strengths and weaknesses ........................................... 20
Conclusion
List of used literary sources
Relevance and problems of research. For a correct assessment of the work of enterprises in the conditions market economy it is necessary to conduct a constant and comprehensive study of the markets to which they have entered and want to gain a foothold and carry out their activities. For this, a PEST analysis is carried out - an assessment of political (Political), economic (Economic), social (Social) and technical (Technical) factors. But the management of the enterprise must clearly know about the internal state of its enterprise.
When analyzing markets, the following indicators are of greatest interest:
Market capacity, that is, the possible sales volumes of a particular product;
Market and forecast sales research;
Shopper Behavior Research;
Studying the practice of competitors;
An analysis of the strengths, weaknesses of the enterprise, its opportunities and dangers can be a tool for such studies.
The strengths of an enterprise are what it has excelled at or some feature that provides additional features... Strength can lie in the experience you have, access to unique resources, the availability of advanced technology and modern equipment, highly qualified personnel, high quality of your products, fame brand etc.
The weaknesses of the enterprise are the absence of something important for the functioning of the enterprise, or something that has not yet succeeded in comparison with other companies. As an example of weaknesses, one can cite too narrow a range of manufactured goods, a bad reputation of the company in the market, lack of funding, low level of service, etc.
The main purpose of this work is to study the methodology for analyzing the strengths and weaknesses of the enterprise of modern companies in the building materials industry (hereinafter PSM).
In accordance with this goal, the study set the following tasks:
1. Define the concept of analyzing the strengths and weaknesses of an enterprise in systematic strategic management.
2. Consider the organizational and economic characteristics of the enterprise.
3. Show the main competitors of the enterprise.
4. To reflect the importance and objectives of the enterprise marketing system.
5. Analyze the financial condition of the enterprise.
6. Conduct an analysis of the strengths and weaknesses of the enterprise.
The object of research in this work is CJSC "Belgorodsky cement".
The subject of research is the strengths and weaknesses enterprises.
The theoretical and methodological basis of the research are: works, textbooks and monographs by domestic and foreign authors in the field of management theory, marketing, economics, materials of periodicals, guidelines, resources global network Internet.
The information base of this study is presented by the following sources:
1) Accounting and financial statements Belgorodsky Cement CJSC for the last 3 years;
2) Statistical information of the planning and economic department of the enterprise for the last 3 years;
3) Materials of marketing research of the building materials market.
Chapter 1. The concept of the analysis of the strengths and weaknesses of the enterprise and the methodology for its implementation
An enterprise strengths and weaknesses analysis evaluates the enterprise's internal strengths to take advantage of opportunities and internal weaknesses that may exacerbate future challenges associated with external hazards. The method used to diagnose internal problems is called a management survey. It is based on a comprehensive study of various functional areas of the organization and, depending on the task at hand, can be methodologically simple or more complex.
For the purposes of strategic planning, the survey is recommended to include 5 functional areas: marketing, finance (accounting), production, personnel, organizational culture and the image of the organization.
1. Marketing area.
When analyzing the marketing function, 7 elements of use are highlighted:
a) market share and competitiveness. The market share in% of its total capacity is one of the most important indicators characterizing the success of the enterprise, since there is a relationship between the market share of an enterprise and its profitability; at the same time, this is an essential goal of most firms, and the management constantly monitors it. It is not necessary to completely control or dominate the market.
b) the variety and quality of the assortment. Largely determines
enterprise sustainability; but here are possible different approaches: one firm
produces a limited range and sees its main success in
ensuring the quality of products, masters 1-2 products per year; another company annually masters tens and hundreds of new products. When establishing
short-term and long-term goals, it is imperative that the top management of the company constantly monitors and evaluates the range of products.
c) market demography.
The study of changes in the market and in the structure of customers is a difficult task for the management of an enterprise, which further complicates its stratification of society, a change in the level of income of the bulk of the population, a change in social values.
d) market research and development.
To maintain the competitiveness of the organization, it is necessary to conduct extensive research and development of new products and services, as well as new markets, which makes it possible to quickly respond to changes in demand and in time to master new sales markets.
e) pre-sale and after-sale customer service.
The customer service function is the weakest point in entrepreneurship today. Efficient and good after-sales service contributes to more sales, the formation and maintenance of customer loyalty to the company, allows you to set higher prices.
An enterprise can only count on success in the market if it has active and competent salespeople, aggressive, creative advertising and promotion of goods and services.
g) profit.
Generalized performance indicator commercial organizations; constant monitoring of the profits of various activities, goods and services is an important function of the marketing manager.
A nonprofit organization prioritizes the efficiency of its operations, for it the efficient delivery of a product or service is a central element of marketing.
2. Finance (accounting)
The financial condition of the enterprise largely determines which strategy the management will choose for the future. A detailed analysis of the financial condition helps to identify the existing and potential weaknesses of the company. As a rule, the analysis is carried out by the methods of financial audit - this is a laborious work, it requires a lot of time and the involvement of a large number of employees. It is necessary to strive to ensure that the financial audit does not interfere with the normal functioning of the enterprise during the period of its conduct.
3. Manufacturing.
Continuous analysis of production management is of great importance for the timely adaptation of the internal structure of the enterprise to changes in the external environment and survival in a competitive environment.
In the course of the analysis it is necessary to get an answer to the questions: Can a firm produce goods and services with lower costs than competitors'? Is there access to new materials? Does the business depend on a single supplier or is there a choice? What is the equipment, is it new, and is it well maintained? Is the procurement system designed to reduce inventories and accelerate product sales? Are there mechanisms to control incoming materials, their movement in production and outgoing products? Can an enterprise serve markets that its competitors cannot? Does the company have an effective product quality control system? How well has the business planned the production process and can it be improved?
4. Personnel (human resources).
The solution to many problems of improving the enterprise depends on the provision of production and management of qualified specialists.
When analyzing the functions of human resources, it is recommended to answer the questions: How to characterize the type of employees currently working in the organization, and what will be required of them in the future? What is the competence and training of the top management of the enterprise? Is there a leadership succession plan? Is there an effective and competitive remuneration system? Is management training and professional development used effectively? Are there cases of leading specialists leaving the enterprise and why? Does the enterprise have a staff assessment system in place, and when was such an assessment carried out last?
Analysis of each of the issues separately and in a complex, the assessment of the quality of human resources will identify potential weaknesses in this functional area and take adequate measures.
5. Organizational culture and image of the enterprise.
Organizational social environment consists of people: managers, subordinates, informal leaders, colleagues. Organizational culture is formed from the behavior of people in the organizational environment.
Under organizational culture understand the integral system developed in the organization and inherent to its members models of behavior, customs, mores, expectations. Culture is the result of social influences, transmitted and maintained mainly through training; within the enterprise manifests itself through behavior. Many behaviors are learned directly through strategies, plans, procedures.
The company's image is determined by the impression that is created with the help of employees, customers and communication in general. The culture and image of an enterprise is reinforced or weakened by reputation: is the enterprise consistent in its activities and achieving its goals, how it compares to other enterprises in the industry, and whether it attracts good people.
By identifying strengths and weaknesses and weighing the factors in order of importance, management can determine functional areas that require immediate intervention or can wait, as well as those that you can rely on in the development and implementation of enterprise strategy.
Chapter 2. Practical part
2.1. Organizational and economic characteristics of CJSC "Belgorodsky cement"
Full and abbreviated name of the enterprise. Closed Joint Stock Company "Belgorodsky Cement", CJSC "Belcement".
Date of registration of the enterprise. "Belgorodsky cement" is a legal entity and is registered as a closed joint-stock company "Belgorodsky cement" by the State Registration Chamber on April 25, 1996 (certificate No. Р-540.16.1).
Postal and legal address of the enterprise: 308015, Russian Federation, Belgorod, st. Frunze, pl. Cemzavoda.
Main activities. Production of cement, clinker, chalk, potash-lime fertilizers, implementation construction works, intermediary activity, sale of own products and services in Russian Federation and abroad, services for the processing of raw materials supplied by the customer.
Organizational and legal form of the enterprise. Closed Joint Stock Company. Legal status joint stock company, the rights and obligations of shareholders are determined in accordance with the Civil Code of the Russian Federation and the law on joint stock companies ( the federal law dated July 8, 1999 No. 138-FZ).
Type of ownership. Private.
Included in State Register Russian Federation of enterprises - monopolists: Federal.
Organizational structure of enterprise management (see Appendix 1).
The main governing body of CJSC Belgorodsky Cement is the general meeting of shareholders. In the intervals between general meetings, management is exercised by a board of directors, consisting of the chairman of the board of directors, the CEO and five directors.
By the decision of the annual general meeting of shareholders of CJSC Belgorodsky cement dated June 17, 2004, the following composition of the board of directors was elected: Baturina E. N. - chairman of the board of directors, Baturin V. N., Burlakov O. L., Guz V. A., Soloschansky O.M., Fominov V.A., Edel K.E.
On November 19, 2004, the Board of Directors made a decision to elect The Director General CJSC "Belgorodsky cement" Fominov Vasily Ivanovich since November 21, 2004.
The most important factor in the development of Belgorodsky Cement CJSC as an enterprise using a forward integration strategy is a rational organizational structure, that is, the type of control device within the enterprise. The organizational structure is currently selected to ensure the implementation of its strategy. Since strategies change over time, management makes appropriate changes in the organizational structure.
The enterprise uses a linear-functional management structure. It represents the principle of building a management process according to the functional subsystems of an organization (marketing, production, research and development, finance, personnel, etc.). For each of them, a hierarchy of services has been formed that permeates the entire organization from top to bottom.
In vertically integrated companies, there is a close technological relationship between the main structural units (single-industry businesses). There is a need for the formation of corporate headquarters groups that monitor, coordinate and plan the activities of areas, as well as evaluate the plans proposed by the management in different areas strategic and operational activities (marketing, production, etc.).
For example, the organization of foreign economic work at an enterprise consists of two parts. The production and technical department headed by Ponomarev L.I. is engaged in foreign economic activity on import, the department of marketing and foreign economic activity is engaged in export, headed by Derin O.F. They are engaged in marketing research, analysis of sales markets, analysis of prices, guarantees, financial reliability of companies wishing to cooperate with the enterprise. Therefore, the main mechanism for coordinating activities should be the planning of their interaction, carried out at the corporate management level and the management system is highly centralized.
Given that the interests of each of the departments are dependent on the performance of others, their management should be able to influence the decision-making processes associated with the transfer of resources within the vertically integrated system.
Integration. Belgorodsky Cement CJSC is a part of the EUROCEMENT group OJSC holding, which is the largest domestic holding specializing in the production and sale of cement, the capacity of which reaches 33 million tons per year. The holding includes 14 more cement plants:
Belgorodsky Cement CJSC has two subsidiaries:
1. LLC "Record - Center". Activities: wholesale and retail trade, warranty and post-warranty repair of equipment.
2. LLC "Rodnichok". Activities: trade in food products and public catering.
Economic characteristics.
Belgorodsky Cement is one of the largest enterprises in the domestic cement industry. Its capacity is 2.6 million tons. In 2004, 1.7 million tons of cement were produced here, or 13% more than in 2003. In total, over 55 years of operation, the enterprise has shipped more than 100 million tons of products. ...
For 9 months of 2005 production increased by 15.4%. In total, 1.45 million tons of cement were produced during this period.
The enterprise manufactures products:
1. Portland cement (GOST 10178-85): PC 600 DO; PC 550 DO; PC 500 DO;
PC 500 DO-N; PC 400 D20; SPTs 400 DO.
2. Portland cement for the production of asbestos-cement products (TU 21-26-18-91): (PCA), CEM I 42.5 N and CEM II / A-S 32.5 N.
3. Portland cement clinker.
All cement grades produced at the plant are certified in the voluntary certification system GOST R. Two grades are certified by the testing laboratory of the Quality Control Organization of the Union of German Cement Plants (Dusseldorf, Germany) according to EN-197-1: 2000 for compliance with CEM I 42.5 N and CEM II / AS 32.5 N. In addition, these cement brands are certified in Ukraine, Hungary, Poland, Slovakia, Estonia.
The plant's products have been repeatedly noted by various international organizations, and two types of cement PC 500-DO and PC 400-D 20 in 2004 were awarded the Diploma "100 best goods of Russia".
The main economic and financial indicators of the enterprise are shown in table. 1.and tab. 2
Table 1
Shipment of products (tons)
The share of export products in shipments in 2004 was 17%.
table 2
Dynamics of the most important economic and financial indicators of the enterprise (thousand rubles)
The authorized capital of the enterprise is RUB 168,920. The placed ordinary registered shares with a par value of 5 rubles in the amount of 39425 rubles and preferred registered shares with a par value of 5 rubles in the amount of 3359 rubles.
When setting the price, the company uses the "Average cost plus profit" pricing method. It seeks to set a price for cement so that it fully covers all costs of its production, distribution and marketing, including a fair rate of return for the effort and risk (Table 3).
Table 3
Sales prices and cost of cement (domestic market) (in Russian rubles and US dollars per tonne)
As can be seen from this table, the selling prices for the products of Belgorodsky Cement CJSC are significantly lower than the national average.
The average number of employees at the enterprise in 2004 was 1337 people. The payroll fund for employees on payroll is 267,615.1 thousand rubles, of which the average monthly social payments per employee amounted to 162 rubles. The average monthly income per employee in 2004 was 20,447 rubles.
2.2. Analysis of the strengths and weaknesses of CJSC "Belgorodsky cement"
2.2.1. Competition analysis
The main competitors of JSC "Belgorodsky cement" in the cement market of the country are presented in table. 4.
Table 4
Shares and capacity of enterprises in the cement market in Russia
For a visual representation, according to the data in the table, we will build a diagram.
Figure 2. Shares of enterprises in the cement market in Russia
One of the main competitors in the market of the European part of Russia and the main competitor in the market of Belgorod and the region is Oskolcement OJSC. The advantage of the Oskol plant is that it is newer, and, therefore, more modern, which means that the equipment has less wear and tear and the production technology is more modern (dry method). A Finnish packaging line is installed at the plant, which makes it possible to eliminate losses during tare. The quality of cement produced in Stary Oskol is not higher than Belgorod, but loses in price. The Starooskolsk plant is 1.5 times more powerful than the Belgorod plant.
Thus, Belgorodsky Cement CJSC is a fairly strong competitor to Oskolcement OJSC and Lipetskcement OJSC, this is largely due to the export of cement, which, nevertheless, does not refute the company's strong position.
2.2.2. Marketing and sales system
The aggravation of competition in the cement industry market objectively increases the demand for marketing as the main tool for market research.
Marketing activity in an enterprise is a set of activities aimed at researching issues such as:
Consumer research;
Research of the motives of his behavior in the market;
Analysis of the actual market of the enterprise;
Product research;
Analysis of forms and distribution channels;
Analysis of the volume of the company's turnover;
Study of competitors, determination of the forms and level of competition;
Determination of the most effective ways to promote products on the market.
CJSC Belgorodsky Cement has a marketing department that studies the market, its problems and prospects; conducts sales promotion activities (all kinds of advertisements, exhibitions).
Marketers make sure that the product meets Russian and European standards, is competitive and meets the needs of consumers. Studying the supply and demand in the cement market, the marketing department specialists conduct research in order to study the capacity and nature of the market, the price level and price elasticity of supply and demand, the degree and conditions of market competition, and makes appropriate decisions.
However, the marketing department at the company is not involved in the development of assortment and product policies. For this, ZAO Belgorodsky Cement has a sales department. In the sales department there is a sales manager who deals with the functioning of the demand for the product and develops a set of measures to stimulate sales. This department also has an assortment manager who studies the factors influencing the formation of the company's assortment and implements the assortment policy pursued by the enterprise.
Since the company ZAO “Belgorodsky Cement” uses a strategy of limited growth, then with this strategy the development goals are set “from what has been achieved” and are adjusted to changing conditions.
The main distribution channels of the plant's products are: retail; wholesale enterprises; directly the sales department at the enterprise.
The favorable geographic location of the enterprise (42 km from the Russian-Ukrainian border) makes it possible to successfully carry out export-import operations. The shortest route to the ports of the Azov and Black Seas, to Europe in transit through Ukraine makes it possible to export products from least cost for delivery to partners. Established production links with forwarding companies and ports enable the plant to deliver products at the request of partners around the world.
The largest consumers of ZAO Belgorodsky Cement cement are Belgorod enterprises that produce construction materials based on it. More than 16% of cement is supplied to JSC "BelATSi" every year. Also, cement is sold to the Moscow region, Smolensk, Kursk and other regions (Table 5).
Table 5
The largest cement consumers CJSC Belgorodsky Cement
| Enterprises | Consumption | share,% |
| JSC "BelATSi", Belgorod, st. Michurina | 300000 | 16,5 |
| JSC "Belgorod Zavod ZhBK-1", st. Communal 5 | 20000 | 1,1 |
| JSC "Belgorodstroydetal", st. Michurina | 15000 | 0,8 |
| Mostotryad - 18, Moscow st. Earthworks | 10000 | 0,55 |
| Mostotryad - 90, Moscow region, Dmitrov | 8000 | 0,45 |
| Dmitrovsky ZhBK, Moscow region, Dmitrov | 9000 | 0,5 |
| CJSC "Smolensk plant of concrete goods-2", Smolensk | 19000 | 1,04 |
| OJSC "Kursk plant KPD", Kursk | 8000 | 0,45 |
| Shop of CJSC "Belgorodsky cement" | 36000 | 2 |
| Other | 1399 800 | 76,6 |
| Total | 1824 800 | 100 |
Thus, the main consumers of cement are enterprises producing prefabricated reinforced concrete structures and products, ready-mixed concrete, mortar, asbestos-cement products, as well as house-building factories, construction organizations engaged in both housing, civil and industrial construction. In addition, there is a rather promising group of cement consumers - the population using cement for individual, garden and civil construction.
The main forms of sales promotion at the enterprise are the mass media (newspapers, local television), visual campaigning (billboards) and participation in international exhibitions.
The company has its own website on the Internet (www. Eurocem.ru), which contains a lot of advertising information (information about the company, partners, industry reviews, etc.) (see Appendix 2).
The plant participates in exhibitions of building materials held both in Russia and abroad (Ukraine, Bulgaria, Yugoslavia, etc.).
2.2.3. Financial analysis
Loans and credits at the beginning of 2004 amounted to 163,000 thousand rubles, at the end of the reporting period 287,170 thousand rubles. Credit history on loans and borrowings received from other organizations is attached (Table 6).
Table 6
Expenses for ordinary activities
The investment activity of the enterprise - investments in non-current assets amounted to:
As of 01.01.2004. 70 300 thousand rubles As of 01.12.2004. 103 063 thousand rubles
Research, development and technological work made up:
As of 01.01.2004. 150 thousand rubles As of 01.12.2004. 123 thousand rubles
Expenditures for the development of natural resources were:
As of 01.01.2004 801 thousand rubles. As of 01.12.2004. 768 thousand rubles
Accounting and depreciation of fixed assets are presented in table. 7
Table 7
Fixed assets (thousand rubles)
Name |
Received |
||||||
For the beginning of the year |
At the end of the year |
||||||
Constructions |
|||||||
Machines and equipped. |
|||||||
Vehicles |
|||||||
Prod. and households. inv-r |
|||||||
Perennial plantings. |
|||||||
Land |
|||||||
| Depreciation of fixed assets | |||||||
Name |
For the beginning of the year |
At the end of the year |
|||||
Buildings and constructions |
|||||||
Machines, equipment, vehicles |
|||||||
OS objects transferred |
|||||||
For conservation |
|||||||
The organization uses a straight-line method of writing off R&D expenses, the accepted term of use for development is set at 3 years.
In connection with the efficient use of production capacities, the indicators of all production activities of the enterprise have increased. In 2004, its capacity was used for clinker by 86.8%, for cement by -64.4%, which influenced the results of work over the past period.
The value of the property for the past period is provided in table. eight
Table 8
Property value at the end of 2004
The value of the property and the sources of its acquisition has increased over the past period. In general, the property increased by 130,583 thousand rubles. The increase in the property of the enterprise was mainly due to the purchase of equipment and indicates the preservation of property potential. [8]
2.2.4. Summary analysis of strengths and weaknesses
To assess the strengths and weaknesses of the enterprise, we will use table 9.
Table 9
Strengths and weaknesses of the enterprise
| Environment aspect | Strengths | Weaknesses |
| 1. Manufacturing. | 1. High competitiveness of products. 2. The ability to manufacture products at the level of world quality standards. 3. Relatively high product quality, constant improvement. 4. We have our own raw material base. |
1. High energy intensity of production. 2. High prices. 3. The negative impact of production on the ecology of the region. 4. Products are manufactured using an outdated "wet method". |
| 2. Personnel. | 1. Training and advanced training of production and scientific personnel. 2. Workers with experience. 3. Workers with higher technical education. |
1. Lack of incentives to improve productivity. 2. Staff turnover. 3. Not a very high level of labor motivation. |
| 3. Marketing. | 1. An efficient system sales of finished products. 2. Gathering information about sales markets. 3. Ample opportunities to market your products |
1. Insufficient marketing research. 2. Insufficiently qualified marketing policy. |
| 4. Organization. | 1. Well-established partnership with suppliers. 2. Effective interaction of various structural divisions. 3. A clear division of labor, professional specialization. |
1. Dependence on suppliers. 2. Lack of departments dealing with innovation. |
| 5. Finance. | 1. The company remains financially independent. 2. Fairly fast turnover of funds. 3. Sufficient amount of own circulating assets. |
1. Large volume of receivables. 2. Lack of long-term sources of funding. |
This analysis shows that the weaknesses of the enterprise are the high energy intensity of production, rather high prices for manufactured products, the negative impact of production on the ecology of the region, etc. But all this can be avoided by using the capabilities of the enterprise.
The main directions of the plant's development are:
· Meeting the requirements of the construction industry in the range and construction and technical properties of cement;
· technical re-equipment and reconstruction of the plant in order to update fixed assets, introduce highly efficient energy-saving technologies and bring the share of dry cement production to 40-50%;
· Organization of production of new types of cement, taking into account the modern requirements of the building complex of Russia;
· Strengthening export potential;
· Improvement of production technologies and equipment for the production of cement;
· Reduction of harmful emissions into the atmosphere and improvement of working conditions;
Development and implementation of a new standard for cement, harmonized in part technical requirements to cements for general construction purposes with the European standard EN 197-1 and other industry standards;
· Widespread introduction of an automated system for accounting for fuel and electricity consumption throughout the technological cycle of cement enterprises;
· Training and professional development of production and scientific personnel.
In order to fully satisfy the market with high-quality cement, the construction of a new cement grinding shop with three cement mills with a capacity of 1 million tons was completed in 2004, which will bring the total cement grinding capacity to 3.6 million tons of cement per year.
Have you ever wondered what a good military leader does before a fight? He studies the battlefield, looking for all the winning hills and dangerous wetlands, 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 don’t assess the strengths and weaknesses of your venture before the battle, and don’t identify the market opportunities and threats (those very uneven terrain that become of great importance in the midst of a battle), your chances of success will diminish dramatically.
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 (S trengths) - the benefits of your organization;
- Weaknesses (W eaknesses) - the flaws of your organization;
- Opportunities (O pportunities) - environmental factors, the use of which will create advantages for your organization in the market;
- Threats (T hreats) - factors that can potentially worsen your organization's position in the market.
The use of SWOT analysis will allow you to organize all available information and, seeing a clear picture of the "battlefield", make informed decisions regarding the development of your business.
SWOT analysis in the marketing plan of your company
SWOT analysis is an intermediate link between the formulation of the mission of your company and the definition of its goals and objectives. Everything happens in the following sequence (see Figure 1):
- You have determined the main direction of development of your enterprise (its mission)
- Then you weigh your strengths and assess the market situation in order to understand whether you can move in the indicated direction and how it is better to do it (SWOT analysis);
- After that, you set goals for your company, taking into account its real capabilities (defining the strategic goals of your company, which will be devoted to one of the following articles).
So, after conducting a SWOT analysis, you will more clearly understand the advantages and disadvantages of your company, as well as the market situation. This will allow you to choose the best path of development, avoid dangers and make the most of the resources at your disposal, while taking advantage of the opportunities provided by the market.
Even if you are sure that you are already well aware of everything, we still advise you to conduct a SWOT analysis, as in this case it will help structure the existing information about the company and the market and take a fresh look at the current situation and the prospects that open up.
How to conduct a SWOT analysis
In general, the SWOT analysis is reduced to filling in the matrix shown in Figure 2, the so-called. "SWOT analysis matrices". In the appropriate cells of the matrix, you must enter the strengths and weaknesses of your enterprise, as well as market opportunities and threats.
Strengths your business - what it excels at or some feature that gives you additional opportunities. Strength may lie in the experience you have, access to unique resources, the availability of advanced technology and modern equipment, highly qualified personnel, the high quality of your products, your brand awareness, etc.
The weaknesses of your enterprise are the absence of something important for the functioning of the enterprise, or something that you still fail in comparison with other companies and puts you in disadvantage... As an example of weaknesses, one can cite too narrow a range of manufactured goods, a bad reputation of the company in the market, lack of funding, low level of service, etc.
Market opportunities are favorable circumstances that your business can use to gain an advantage. As an example of market opportunities, one can cite the deterioration of the positions of your competitors, a sharp increase in demand, the emergence of new technologies for the production of your products, an increase in the level of income of the population, etc. It should be noted that opportunities from the point of view of SWOT analysis are not all opportunities that exist in the market, but only those that can be used by your company.
Market threats are events that could adversely affect your business. Examples of market threats: new competitors entering the market, tax increases, changing consumer tastes, declining birth rates, etc.
Note: the same factor can be both a threat and an opportunity for different enterprises. For example, for a store that sells expensive products, increasing incomes of the population may be an opportunity, as it will lead to an increase in the number of customers. At the same time, for a discounter store, the same factor can become a threat, since its customers with higher salaries can move to competitors offering a higher level of service.
So, we have defined what the result of the SWOT analysis should be. Now let's talk about how to arrive at this result.
From words to deeds
Step 1. Determining the strengths and weaknesses of your company
The first step in a SWOT analysis is to assess your own forces... The first step will allow you to determine what the strengths and weaknesses of your business are.
In order to identify the strengths and weaknesses of your business, you need to:
- Make a list of parameters by which you will evaluate your enterprise;
- For each parameter, determine what is the strength of your enterprise and what is its weakness;
- From the entire list, select the most important strengths and weaknesses of your enterprise and enter them into the SWOT analysis matrix (Figure 2).
Let us illustrate this technique with an example.
So, you have already done a significant part of the work on the SWOT analysis of your enterprise. Let's move on to the second step - identifying opportunities and threats.
Step 2. Identify market opportunities and threats
The second step of the SWOT analysis is a kind of "local exploration" - market assessment. This stage will allow you to assess the situation outside your enterprise and understand what opportunities you have, as well as what threats to fear (and, accordingly, prepare for them in advance).
The methodology for identifying market opportunities and threats is almost identical to the method for determining the strengths and weaknesses of your enterprise:
Let's move on to an example.
You can take the following list of parameters as a basis for assessing market opportunities and threats:
- Demand factors (here it is advisable to take into account the size of the market, the rate of its growth or decline, the structure of demand for your company's products, etc.)
- Competition factors (you should take into account the number of your main competitors, the availability of substitute products on the market, the height of the barriers to entry and exit from the market, the distribution of market shares among the main market participants, etc.)
- Sales factors (it is necessary to pay attention to the number of intermediaries, the presence of distribution networks, the conditions for the supply of materials and components, etc.)
- Economic factors (taking into account the exchange rate of the ruble (dollar, euro), inflation rate, change in the level of income of the population, tax policy of the state, etc.)
- Political and legal factors (the level of political stability in the country, the level of legal literacy of the population, the level of law-abidingness, the level of government corruption, etc.)
- Scientific and technical factors (usually taken into account the level of development of science, the degree of implementation of innovations (new goods, technologies) in industrial production, the level of state support for the development of science, etc.)
- Socio-demographic factors (you should take into account the size and age and sex structure of the population of the region in which your enterprise operates, the birth rate and mortality rate, the employment rate, etc.)
- Socio-cultural factors (usually the traditions and value system of society, the existing culture of consumption of goods and services, existing stereotypes of people's behavior, etc.)
- Natural and environmental factors (taken into account climatic zone where your company operates, the state of the environment, public attitudes towards environmental protection, etc.)
- And finally international factors(among them the level of stability in the world, the presence of local conflicts, etc.)
Then, as in the first case, you fill in the table (Table 2): in the first column you write down the assessment parameter, and in the second and third columns - the existing opportunities and threats associated with this parameter. The examples in the table will help you understand how to list the opportunities and threats for your enterprise.
Table 2. Definition of Market Opportunities and Threats
| Evaluation parameters | Opportunities | Threats |
| 1. Competition | Barriers to entry to the market have increased: from this year it is necessary to obtain a license to engage in this type of activity | A large foreign competitor is expected to enter the market this year |
| 2. Sales | A new retail chain has appeared on the market, which is currently choosing suppliers | Starting this year, our largest wholesale buyer determines suppliers based on the results of a tender. |
| 3.etc. | ||
After filling in table 2, as in the first case, you need to select the most important from the entire list of opportunities and threats. To do this, you need to evaluate each opportunity (or threat) by two parameters, asking yourself two questions: "How likely is it that this will happen?" and “How much will this affect my business?” Choose those events that are likely to occur and have a significant impact on your business. Enter these 5-10 opportunities and about the same number of threats into the corresponding cells of the SWOT analysis matrix (Figure 2).
So, SWOT matrix-analysis is complete, and you see a complete list of the main strengths and weaknesses of your enterprise, as well as the prospects opening up for your business and the dangers that threaten it. However, this is not all. Now you need to take the final step and align your business's strengths and weaknesses with market opportunities and threats.
Step 3. Comparison of the strengths and weaknesses of your enterprise with the opportunities and threats of the market
Matching your strengths and weaknesses with market opportunities and threats will enable you to answer the following questions regarding the future development of your business:
- How can I take advantage of these opportunities by leveraging the strengths of the enterprise?
- What weaknesses of the enterprise can prevent me from doing this?
- What are the strengths that can be used to neutralize existing threats?
- What threats, compounded by enterprise weaknesses, do I need to be most wary of?
To compare the capabilities of your enterprise to the market conditions, a slightly modified SWOT analysis matrix is used (Table 3).
Table 3. Matrix of SWOT analysis
OPPORTUNITIES 1. The emergence of a new retail network |
THREATS 1. The emergence of a major competitor |
|
STRENGTHS 1. High quality products |
1. How to take advantage of opportunities Try to become one of the suppliers of the new network, focusing on the quality of our products |
2. How can you reduce threats To keep our buyers from going to a competitor by informing them about the high quality of our products |
WEAKNESSES 1.High production cost |
3. What can prevent you from taking advantage of opportunities The new chain may refuse to purchase our products, as our wholesale prices are higher than those of competitors |
4. The biggest risks to the firm An emerging competitor can offer the market products similar to ours at lower prices |
By filling out this matrix (which we hope the examples we have suggested will help you), you will find that:
- identified the main directions of development of your enterprise(cell 1, showing how you can take advantage of the opening opportunities);
- have formulated the main problems of your enterprise, subject to an early decision for the successful development of your business (the rest of the cells in Table 3).
You are now ready to set goals and objectives for your business. However, we will talk about this in one of the following articles, and now we will dwell on the question that interests you for sure:
Where to get information for SWOT analysis?
In fact, most of the information you need to conduct a SWOT analysis is already at your disposal. Basically, this is, of course, data about the strengths and weaknesses of your enterprise. All you have to do is collect all these disparate facts (taking reports from the accounting department, production and sales departments, talking with your employees who have the necessary information) and organize them. It will be better if you can involve several key people in your enterprise in the collection and analysis of this information, since it is easy to miss an important detail on your own.
Of course, information about the market (opportunities and threats) is somewhat more difficult to obtain. But even here the situation is not hopeless. Here are some sources you can find useful information:
- marketing research results, reviews of your market, which are sometimes published in some newspapers (for example, "Delovoy Peterburg", "Vedomosti", etc.) and magazines (for example, "Practical Marketing", "Exclusive Marketing", etc.);
- reports and collections of Goskomstat and Petersburgkomstat (information on population size, mortality and fertility rates, age and sex structure of the population and other useful data);
- finally, you can get all the necessary information by ordering a marketing research from a specialized company.
We will tell you more about the sources and methods of collecting information that you may need to conduct a SWOT analysis in the following articles. And now - let's summarize all of the above.
Summary
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).
A SWOT analysis will allow you to choose the best path for your business development, avoid dangers and make the most of the resources at your disposal.
The procedure for conducting a SWOT analysis is generally reduced to filling out a matrix, which reflects and then compares the strengths and weaknesses of your company and the opportunities and threats of the market. This mapping allows you to determine what steps can be taken to grow your business, as well as what problems you need to urgently address.
In preparing the article, the following materials were used:
ANALYSIS OF STRENGTHS AND WEAKNESSES OF THE COMPANY
Assessment of strengths and weaknesses. Strengths are the experience and resources that the company owns, as well as strategically important areas activities that allow you to win the competition. Weaknesses are weaknesses and limitations that hinder success.
There are many sources of strengths and weaknesses of the enterprise, some of which are considered in the analysis of the industry. Thus, the strengths include serious and explicit consumer preferences, the possibility of economies of scale. Weak side enterprises are severely dependent on the domestic market for the volume of direct sales, inability to meet the needs of new market segments, etc.
Determination of strengths and weaknesses should be carried out in all areas of the enterprise:
Organization and general management;
Production;
Marketing;
Finance and accounting;
HR management, etc.
Below is a set of factors, and key questions for their analysis in the field of production (Table 5).
Table 5
Analysis of the strengths and weaknesses of the enterprise in the field of production
| Factors | Questions for analysis | |
| 1. | The cost of raw materials and their availability, relationships with suppliers | Does the production capacity meet modern requirements? |
| 2. | Inventory control system, inventory turnover | How effectively are used |
| 3. | Production location | are there possible |
| 4. | Economies of scale | to expand the production base? What is the return on research and development? Do research and development work |
| 5. | Efficiency of capacity utilization, progressiveness of equipment | |
| 6. | Vertical integration, net output, profit | |
| 7. | Control over the preparation process | to create fundamentally new products? |
| 8. | Purchase | |
| 9. | Research and development, innovation | |
| 10. | Patents, Trademarks and Similar Forms of Product Protection | |
| 11. | The amount of costs |
The assessment of the factors of the strengths and weaknesses of the enterprise is given in comparison with the market leader on an interval scale by assigning a certain weight to each factor, for example, from 1 (insignificant) to 5 (outstanding).
Strengths and weaknesses of the enterprise
Determination of the main advantages. Enterprise strategy should take into account the strengths, weaknesses of the business and rely on its main strengths.
The main advantages characterize the exceptional competence (unique advantages) of the enterprise in solving the assigned tasks.
Unique benefits are based on a particularly efficient combination of resources, which are divided into tangible and intangible.
Tangible resources- these are the physical and financial assets of the enterprise, reflected in the balance sheet (fixed assets, inventories, cash etc.). They define the technical competence of the enterprise. Intangible resources- these are, as a rule, the qualitative characteristics of the business. This includes:
Intangible assets not related to people - trade mark, advantageous location, prestige, company image;
Intangible human resources - special knowledge: personnel, experience, fame of the management team.
Unlike strengths and weaknesses, for which an internal assessment is possible, the unique advantages of the enterprise must be perceived by consumers as such, i.e. be of known value to them.
The popularity of the brand (the confectionery factory "Red October"), the favorable location (the Voronezh department store "Russia"), the opening hours (round-the-clock pharmacies), highly qualified personnel (the service sector), etc. are of great importance for consumers.
In a competitive environment, the unique advantages of an enterprise are “eroded”, and over time they lose their strength. From the point of view of significance for business, three categories can be distinguished key competencies:
1. "Spent", which have already been adopted by the main competitors and have become a kind of industry standards. They do not give the company a competitive advantage and are a prerequisite for survival in the market.
2. "Unpromising", which at the moment remain in force, but in the near future may become widely available. In the short and medium term, the enterprise must protect these benefits and make the most of them. They cannot serve as the basis for a long-term strategy.
3. "Sustainable" competencies that the company can defend over a long period of time.
When developing a strategy, a reasonable assessment of the resources available and the unique benefits must be made. Below is a list of key questions to analyze:
What unique strengths does the organization currently have, how long will they last, and when will they become industry “standards”?
How can these benefits be “protected”, developed and used within the framework of the strategy?
Is the enterprise capable of creating new, original combinations of resources on the basis of existing resources, which in the future can be transformed into its main advantages?
Are the unique advantages of the enterprise taken into account in its production, sales, scientific and technical policy?
3. STRATEGIC COST ANALYSIS AND VALUE CHAIN
Strategic cost analysis based on the "value chain" aims to identify the strengths and weaknesses of the enterprise, as well as its competitive advantages. The value chain of an individual enterprise is shown in Fig. 10. The analysis of the "value chain" is based on the assumption that the main economic goal of the enterprise is the creation of value in excess of the real costs of production.
Sh M. Porter introduced the concepts of "product value" and "value chain". The value of a product in Porter's understanding is the amount that consumers agree to pay for the product or services provided by the manufacturer. The traditional concept of value as socially necessary expenditure of labor for the production of a unit of output does not apply in this case.
The value chain provides an insight into the strategically related species activity of the enterprise and allows you to trace the process of value creation. In the “value chain”, the activities of an enterprise are divided into two types:
the main- associated with the production of goods, their sale and after-sales service; auxiliary- providing basic processes. Each of the activities can help reduce costs and create a basis for product and service differentiation. To achieve competitive advantages, the “value chain” should be viewed as a system of activities with characteristic connections. Connections within the chain determine the ways in which certain types of activity interact with each other and significantly affect their effectiveness. Therefore, they can serve as an additional source of enterprise benefits.
Effective linking of sales, product manufacturing and purchasing processes allows you to reduce the amount of stocks of both raw materials and finished goods. The purchase of expensive, but more advanced equipment ultimately leads to lower production costs and improved product quality.
It is possible to increase the competitiveness of an enterprise by reducing costs, improving or excluding individual elements and links from the “value chain”.
Questions for self-control
1. What is SWOT analysis and what is it for?
A) SWOT - analysis is an analysis of the external and internal environment. It establishes the influence of environments on the enterprise and the team,
B) SWOT - analysis is the study of the environment of the enterprise and the team and their impact on the process enterprise development,
C) SWOT - analysis is a broadly accepted approach that allows for the joint study of external and internal environment. It establishes connections between strength and weakness, which are the organization's supply, external hazards and opportunities.
Answer: "B"
2. What threats may arise for Russian enterprises in various industries?
3. What is industry analysis? Discuss the main areas of industry analysis.
4. What is the competitiveness of a product, technology, production, firm, industry, country?
5. What is the principle of the law of competition?
6. Justify why you need to study competitors. Should you always study your competitors?
7. Justify why you need to study consumers. Is it always necessary?
8. Review the methods used in management analysis. If possible, provide examples from Russian practice.
9. What, in your opinion, hinders or hinders the conduct of a comprehensive analysis of the activities of Russian enterprises?
10. What are the main strategies for achieving competitive advantage. What are the associated risks associated with each of them?
Questions for control
1. Implementation of the strategy provides for:
A) activation of managers of all levels;
B) allocation of funds for the implementation of the strategy;
C) the introduction of advanced experience and scientific achievements in the process of implementing the strategy;
D) stimulating the implementation of a strategic plan;
E) the formation of corporate culture;
E) periodic reporting on the implementation of the strategy.
Answer: "A", "B", "D"
2. The main purpose of the strategic analysis of the external environment of the organization is:
A) information that must be taken into account when formulating the mission of the organization;
B) information about threats that must be considered when developing a specific strategy for the organization;
C) studying the specifics of a competitor's product.
Answer: "B"
3. The factors that determine the competitive strength of an organization's supplier are:
A) the level of specialization of the supplier;
B) the concentration of the supplier on working with specific customers;
C) inflation rates and taxation rates.
Answer: "B"
4. What is the essence of SWOT analysis?
5. What are the competitive advantages and disadvantages of the Russian economy?
6. Diagnostics of an enterprise is:
A) analysis of financial and performance indicators;
B) quantitative and qualitative assessment of the enterprise in relation to the external environment, as well as analysis of organizational, financial, production, managerial, personnel aspects of activities;
C) analysis of the place of the enterprise in the competitive environment.
Answer: "B"
7.Evaluation of a business and a company is:
A) assessment of the efficiency of the enterprise;
B) assessment of the effectiveness of management activities at the enterprise;
C) assessment of the market value of the company and business.
Answer: "B"
8.Situational analysis is:
A) analysis of the situation within the organization;
B) analysis of influencing factors and the place of the enterprise in the surrounding business space;
C) analysis of activities, carried out depending on the current situation.
Answer: "B"
9.Analysis of market segments is:
A) analysis of the breakdown of the sales market by type of product;
B) analysis of the consumer market served by the enterprise;
C) analysis of competing products in the market.
Answer: "A"
10. Segmentation of strategic economic zones is:
A) selection of promising markets for the organization;
B) dividing the scope of the organization into large blocks corresponding to separate, important and profitable directions for the organization;
C) the division of markets for products for the enterprise.
Analysis of the strengths and weaknesses of the enterprise is a very important direction in the activities of the enterprise. The SWOT analysis method can effectively help in this and is widely used by enterprises around the world. The modern manager must be fluent in this method.
SWOT is an acronym for Strengths, Weaknesses, Opportunities, Threats. A qualitative analysis of the company's prospects is carried out in order to clarify the above-mentioned aspects of its activities, the opportunities that open up to it and the impending threats. The strength and weakness of an enterprise must be assessed in the context of its competitiveness. A SWOT analysis helps to develop an understanding of the circumstances in which an enterprise operates. This method helps to balance your internal strengths and weaknesses with the opportunities and threats that the enterprise will have to face. This analysis helps to determine not only the capabilities of the enterprise, but also all the available advantages over competitors. Below are sample groups of questions for conducting a SWOT analysis. The first two groups deal with internal factors. Strengths and weaknesses are analyzed. The second group of questions concerns external factors and includes opportunities and threats.
When compiling questionnaires, it should be borne in mind that too long lists lead to ambiguity or vague and make it difficult to identify what is really important. Strengths should be based on facts only. Thus, this method helps to identify the key success factors (KFU), i.e. the strengths and weaknesses of the enterprise that have the greatest impact on the success of its activities.
Internal factors. Strengths:
■ competence;
■ sufficient financial resources;
■ having good competitive skills;
■ good reputation with consumers;
■ recognized leadership of the company in the market;
■ the company has well thought out strategies in this area of activity;
■ availability of our own technologies High Quality;
■ the presence of advantages in the cost of products and services;
■ the presence of advantages over competitors;
■ ability to innovate, etc.
Weaknesses:
■ absence strategic direction;
■ marginal position in the market;
■ availability of outdated equipment;
■ low level of profitability;
■ unsatisfactory level of management;
■ poor control;
■ weakness compared to competitors;
■ backwardness in innovation processes;
■ a narrow range of products;
■ unsatisfactory image in the market;
■ low marketing skills among staff;
■ lack of sufficient funding for projects, etc.
External factors. Opportunities:
■ work with additional groups of consumers;
■ introduction to new markets or market segments;
■ expanding the range of products to satisfy a wider range of consumers;
■ product differentiation;
■ the ability of the enterprise to quickly move to more profitable strategic groups;
■ confidence in rival firms;
■ rapid market growth, etc.
Threat factors:
■ the arrival of new competitors;
■ increasing sales of similar products;
■ slow market growth;
■ unfavorable tax policy of the state;
■ changing needs and tastes of customers, etc.
Summarizing the above, a manager must be able to determine what strengths his company has, not only to see, but also to admit its weaknesses. He must be aware of the business opportunity and take into account those threats that might prevent it from capitalizing on the opportunity.
Based on the analysis carried out at the second stage, the SWOT matrix is drawn up, shown in Fig. 4.2.
To deal with threats and take advantage of existing opportunities, it is not enough just to know about them. If a business is aware of a threat, but does not confront it, it can fail in the market. On the other hand, an enterprise may have information about new opportunities, but not have the resources to implement them.
SWOT analysis involves the interactive use of a matrix. On the left, there are two sections (strengths, weaknesses), in which, respectively, all the characteristics of the enterprise identified at the first stage of the analysis are introduced.
At the top of the matrix, two sections (opportunities and threats) are highlighted, and at the intersection of these sections, four fields are formed for further research:
1) "SIV" (strength and capabilities);
2) "SIU" (strength and threats);
3) "SLV" (weakness and opportunities);
4) "SLU" (weakness and threats).
All relevant entries are entered into these fields as suggestions as a result of the analysis of the interaction of the above characteristics.
It can be seen from the matrix that the most favorable opportunities for the existence of an enterprise are opened by the field "SIV". This field allows you to leverage the strengths of the enterprise in order to capitalize on the opportunities that arise. The "SLV" field allows, due to the emerging opportunities, to try to overcome the company's weaknesses. The field "IMS" presupposes the availability of opportunities to use the forces of the enterprise to eliminate threats. The "SLU" field is the most dangerous for the enterprise. It is characterized by the weakness of the position of the enterprise and the danger of an impending threat.
The manager should also be aware that opportunities and threats can shift into their opposite. For example, untapped capabilities of an enterprise can become a threat if a competitor uses them in time. On the other hand, a successfully avoided threat can provide an enterprise with a strong position if competitors have not eliminated the same threat.
Fragment from the book Simkin L., Dibb S.
"A Practical Guide to Market Segmenting"
A3.1. Introduction
Any segmentation begins with a comprehensive study of the market situation in which the company operates and an assessment of the types of opportunities and threats that it may face. The starting point for such an overview is SWOT analysis, one of the most common types of analysis in marketing. Simply put, a SWOT analysis allows you to identify and structure the strengths and weaknesses of the firm, as well as the potential opportunities and threats. This is achieved due to the fact that managers must compare the internal strengths and weaknesses of their company with the opportunities that the market gives them. Based on the quality of compliance, a conclusion is made about in which direction the organization should develop its business and, ultimately, the distribution of resources by segment is determined.
This chapter will look at the strengths, weaknesses, opportunities and threats in relation to the segments or markets of interest. Determining the relative importance of each of the listed components of a SWOT requires a wide range of inputs. After completing this chapter, you will build a SWOT analysis for each of your segments.
Objects within each element (for example, strengths) will be ranked in order of importance: the most important power will go first, then the second, and so on.
A3.2. SWOT Analysis Rules
The simplest form of presenting the results of a SWOT analysis is shown in Fig. A3.1: Lists strengths, weaknesses, opportunities and threats. Because of its conceptual simplicity, SWOT has become easily applicable to managers and just as susceptible to misapplication. It does not require extensive databases or formal training. Anyone who is even a little familiar with the company and has an understanding of the market can draw up a simple SWOT. On the other hand, the inherent simplicity of the analysis can lead to hasty and meaningless conclusions, full of such vague and ambiguous concepts as - performance characteristic product ?,? modern equipment ?,? prices ?. In addition, users sometimes forget about objectivity and rely on outdated or unreliable information.
Rice. A3.1. SWOT analysis
To avoid these mistakes and get the most out of your SWOT analysis, follow these simple rules.
Rule 1. Carefully define the scope of each SWOT analysis. Companies often conduct general analysis covering their entire business. Most likely, it will be too general and useless for managers who are interested in opportunities in specific markets or segments. Focusing a SWOT analysis, for example, on a specific segment, ensures that the most important strengths, weaknesses, opportunities and threats are identified for it.
Rule 2. Understand the differences between the elements of SWOT: strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are internal features of the company, therefore, under its control. Opportunities and threats are related to the characteristics of the market environment and are not influenced by the organization.
Rule 3. Strengths and weaknesses can only be considered as such if buyers perceive them so. Only the most relevant strengths and weaknesses should be included in the analysis. Remember, they must be defined in the light of the competitors' offerings. A strong side will only be strong when the market sees it as such. For example, the quality of a product will only be strong if it performs better than competitors' products. And finally, there can be a lot of such strengths and weaknesses, so you don't understand which of them are the main ones. To avoid this, advantages and weaknesses should be ranked according to their importance in the eyes of buyers.
Rule 4. Be objective and use versatile input information... Of course, it is not always possible to carry out an analysis based on the results of extensive marketing research, but, on the other hand, you cannot entrust it to one person, since it will not be as accurate and deep as an analysis carried out in the form of group discussion and exchange of ideas. It is important to understand that a SWOT analysis is not just a listing of managers' suspicions. It should be based as much as possible on objective facts and research data.
Rule 5. Avoid lengthy and ambiguous statements. Too often, SWOT analysis is weakened precisely because it includes statements like these, which most likely mean nothing to most buyers. The more precise the wording, the more useful the analysis will be. This is confirmed by Fig. A3.2. Buyers' notice will be perceived as a poorly defined, meaningless statement. This element needs to be broken down into several components that are more significant from the buyer's point of view: modern equipment?
Other statements from Fig. 2 can be analyzed in a similar way. A3.2. Some of the components received will be relevant to the customer, some will not. The bottom line is that you need to include only those of them that are perceived by the market and buyers as important.
Rice. A3.2. An example of bad SWOT analysis
A3.3. Elements of the internal environment: strengths and weaknesses
Strengths and weaknesses can cover a wide variety of aspects of a company's operations. Below are the categories most frequently included in the analysis. Each SWOT is unique and may include one or two of them, or even all at once. Each element, depending on the perception of buyers, can be both a strength and a weakness.
- Marketing.
Product
Pricing
Promotion
Marketing information / intelligence
Service / staff
Distribution / distributors
Branding and positioning - Engineering and new product development. The closer the link between marketing and technical department becomes, the more important these elements will be. For example, the strong relationship between the new product development team and the marketing department allows for direct use of customer feedback in the design of new products.
- Operational activities.
Manufacturing / Engineering
Sales and marketing
Processing orders / transactions - Staff.
Research and development
Distributors
Marketing
Sales
After-sales service / service
Customer service / service
This includes skills, wages and bonuses, training and development, motivation, working conditions for people, and staff turnover. All of these elements are central to the successful implementation of a customer-centric marketing philosophy and marketing strategy.
- Management. Sensitive and often controversial, but sometimes requiring changes in the management structure, directly determine the success of a marketing strategy implementation. These aspects should be reflected in the analysis.
- Company resources. Resources determine the availability of people and finances, and thus affect the company's ability to capitalize on specific opportunities.
A3.4. Elements of the external environment: opportunities and threats
Opportunities and threats are outside the control of the organization. Thus, they can be viewed as external, related to elements of the market environment. Analysis of the environment that this moment should already be done (see Analysis 2), can serve as an excellent starting point for this part of the SWOT analysis. Key elements to consider include:
- legislative / regulatory / political forces. The actions of the authorities in the form of policy enforcement, as well as the legislative and regulatory requirements to which companies must comply;
- social forces (culture). Directly affecting the company when dissatisfied customers pressurize organizations whose activities are perceived as unacceptable;
- technological forces. The technological ability that helps a company achieve its goals affects the products offered to customers and their responses;
- economic situation. The influence of the general state of the economy, under the influence of which consumer demand and manners of spending money are formed;
- competition. The nature and scale of the competitive threat. Special attention deserve the following points:
Intensity of competition
The threat of the emergence of new competitors
The needs of buyers in the market
Bargaining Power of Buyers, Distributors, Suppliers
Competitiveness
Pressure from substitute products
A3.5. Data logging for SWOT analysis
For each market or segment under consideration, the most important (most relevant / business influencing) elements should be listed across all four categories: strengths, weaknesses, opportunities and threats (see Table A3.1). In each of them, the wording should be ordered by importance: first comes threat number one, and so on. The SWOT should be as focused as possible: for example, if necessary, build a separate table for each new market or group of buyers. It makes no sense to list everything possible and impossible: limit yourself to those elements that have the greatest impact on your company. Be objective. Can you back up your claims with evidence (quotes, letters, industry statistics, press reports, government publications, dealer reports, customer comments)? Remember that the analysis should be customer-focused and not internally oriented. As you review your next statement, it is helpful to ask yourself the following questions.
- Are we sure that this is actually the case?
- How confident are we?
- How do we know?
- Is it possible that this will change soon?
- Does this statement have an attitude / meaning / meaning to our customers?
- Have we considered this position in relation to competitors?
In practice, a SWOT analysis is often prepared for each leading competitor and for specific markets. It reveals the relative strengths and weaknesses of the company, its ability to deal with threats and seize opportunities. This exercise is useful in determining the attractiveness of the available opportunities and assessing the firm's ability to pursue them.
Table A3.1 SWOT Analysis
What should be done:
- Rank statements as possible.
- Include basic statements / aspects only.
- Have evidence to support them.
- Strengths and weaknesses must be considered in relation to competitors.
- Strengths and weaknesses are internal aspects.
- Opportunities and threats are external aspects of the market environment.
What are the main conclusions that can be drawn from this?
A3.6. Summary
In this chapter, we have covered how to conduct a SWOT analysis for each market or segment under consideration. This approach is simple, yet it allows a company to explore opportunities in the marketplace and weigh its ability to pursue them. It also examines threats that could undermine the firm's position. Strengths and weaknesses are viewed from the buyer's perspective, which provides a realistic basis for resource allocation decisions and helps the company get the most from the opportunities it has.
Checklist: Strengths, Weaknesses, Opportunities and Threats
We recommend that you read and complete the following checklist.
1. What you should learn
Before moving on to the next chapter, you must complete a SWOT analysis for each market. To do this, it is necessary to study the internal strengths and weaknesses of the company and identify the opportunities and threats that exist in its external market environment. Items in each of the four categories must be ranked. The analysis should result in conclusions for the company. If you serve more than one market, you must fill out the appropriate forms for each of them.
If you have not yet gathered the information you need to do this, we strongly advise you to return to this chapter as soon as possible, and certainly before choosing target segments and formulating positioning strategies.
2. The table must be filled
Check your progress: have you completed the spreadsheet?
A 3.1: SWOT analysis
Be prepared to return to the table if / when additional information becomes available.
3. Collected information
This chapter requires the following types of information. Indicate where you are in collecting the relevant information.
| Information |
| Collected | Going to | Not collected |
ELEMENTS OF THE INTERNAL ENVIRONMENT
Marketing
Engineering and product development
Operational activities
Staff
Management
Company resources
Other
ENVIRONMENTAL ELEMENTS
Legislative Forces
Regulatory forces
Political forces
Social (cultural) forces
Economic forces
Technological forces
Competition Supplier influence and power
Consumer purchasing power
Other