SWOT analysis: what is it?
The concept of swot analysis originated in 1963. For the first time, they talked about him at the Harvard conference on business policy issues. Acronym was introduced by Professor C. Andrews.
In this article we will look at what swot analysis is and what its role is in marketing research.
SWOT from English means “strength”, “weakness”, “opportunities” and “threats” (Strengths, Weaknesses, Opportunities, Threats). These words literally mean the method of swot analysis. Namely, the analysis of the marketing strategy and the company as a whole in terms of assessing its strengths and weaknesses, its capabilities and threats from the external environment. Under the external environment refers to a set of factors that affect the enterprise. This includes competition, demand, consumer interest, and so on.
Thus, a swot analysis is needed to assess the company's activities in order to prevent the impact of threats on it. He also aims to help her in the development and promotion of the market. Each step in the analysis is usually carried out by separate groups of specialists of the company. At the end joint conclusions are made.
Swot analysis rules
This analysis has several rules that help to avoid mistakes and get the most out of it.
- The first rule is to carefully define the scope. That is, the swot analysis must be applied to each specific company. Otherwise, it will be of a general nature, which means it will be useless for managers. It is advisable to concentrate on a specific segment, which ensures the identification of all strengths and weaknesses, as well as opportunities and threats.
- The second rule says that you need to be able to distinguish the concepts of which the swot-analysis consists. Under the strengths and weaknesses in the analysis refers to the features of the company, which it can control. As for opportunities and threats, they are always connected with the market environment.
- The third rule says that relative strengths and weaknesses should always be focused on buyers. It is important to rank the strengths and weaknesses from the point of view of the buyer. After all, if the ranking is done only from the point of view of managers, the analysis will not be effective.
- The fourth rule. In the assessment methodology need to focus on several people. After all, one person will not be able to conduct a deep analysis, and also will not be objective.
- The fifth rule says that the end of the swot analysis should be a clear conclusion.The conclusion should not contain ambiguous statements, should be clear to everyone who is engaged in marketing activities.
Now the technique is used to analyze the factors of competitors, the implementation of strategy, and intelligence of competitors.
It should be noted that the swot analysis takes into account many factors that can affect the company's operations. These are economic factors, political, market and technological, international, legal, social factors. The analysis also includes an assessment of the strengths and weaknesses of competitors, suppliers and even those enterprises, which indirectly affect the company's activities.
Swot analysis has been successfully used by companies around the world since the 1960s. Thanks to him, managers received a strategic planning tool. This tool helps not only to protect the company from a variety of threats, but also to advance in the market in the future.
As additional information, we recommend that you read the following articles on management and analytics.