How to do SWOT analysis of an enterprise. SWOT and PEST analysis

To most, the concepts of “SWOT” and “PEST analysis” seem to be something very complicated, from the category of a higher economy. But in fact, any interested person can conduct a small study. All you need is time and a bit of your attention. SWOT analysis is especially relevant for business owners who, with the help of this simple marketing tool, can protect themselves from many risks. You can read more about the SWOT analysis of an enterprise and how to conduct it in your company in this article.

What is a SWOT analysis?

SWOT analysis of a trading company is a method for assessing the current situation and future business prospects. The abbreviation SWOT stands for strength - strengths, weaknesses - vulnerabilities, opportunities - opportunities and threats - threats. It turns out that such an analysis is carried out for a more detailed study of all four parameters in the current and future time. Often, managers vaguely imagine what kind of development their company can expect. For newcomers to the business field, SWOT analysis helps to see the real picture of what is happening, without any embellishment. When conducting a study, four main questions are usually asked:

• What can a company do?
• What would you like to do?
• What is really possible to fulfill from the plan?
• What do consumers and partners expect?

Properly conducted SWOT analysis of the enterprise and LLC allows you to sort through what was not available at first glance and structure your knowledge. It helps to see the strengths and weaknesses of the enterprise. For example, the owner of a retail store thought he was good at selling tomatoes, and was about to open a new outlet for selling fresh vegetables. But the SWOT analysis showed that sweets were the top seller in his shop. If a businessman invested all his money in the purchase and sale of vegetables, then most likely he would go broke. So, with a simple example, you can show the effectiveness of the SWOT method in action. In addition, a competent assessment allows you to see possible risks for the company and prevent them in time. And where there are risks, there are opportunities. Often, employees do not even imagine in what unexpected places you can benefit. This happens due to the fact that when executing the same work day after day, the managers “blur” their eyes. But SWOT analysis helps to look at the matter from a different perspective.

PEST analysis as a marketing tool

PEST or STEP analysis is another powerful tool in business and marketing. Using it, political - political, economic - economic, social - social and technological - technological environmental factors are investigated. That is, when compiling a PEST analysis, you will have to apply your knowledge not to the company that interests you, but to indirect factors. At first glance, they may not affect the business at all, but play a significant role in the further development of the company. The analysis results are drawn up using a matrix in which the main environmental factors are indicated. Where can PEST analysis be applied? First of all, in those enterprises that are focused on consumers and work with sales. Using this marketing tool, you can predict a fall or development of demand and prevent many risks. PEST analysis is also used in government agencies, in which it is important to correctly formulate a budget based on the needs of society. The results of the PEST analysis can be used to determine the list of threats and capabilities of the SWOT analysis.

5 reasons to deal with this if you have your own business

The ability to use marketing tools is an integral part of the financial and economic literacy of the leader. Knowing how and why the SWOT and PEST analysis of the enterprise is applied, many difficulties associated with insufficient planning and business organization can be avoided. Why else do you need to use these tools?

1. Drawing up an effective business strategy that will help the company grow. SWOT gives a complete picture of the strengths and weaknesses, based on which we can conclude on the directions in which it is worth developing.
2. SWOT analysis can help determine the reasons for the effective or ineffective business and correct them in the future.
3. An analysis of environmental factors helps highlight competitors and strengthen the company's market position.
4. SWOT can prevent a business crash: in conjunction with a PEST analysis, it identifies opportunities and threats that can be considered when developing a strategy.
5. SWOT analysis helps to find the very highlight that many startups lack. In the modern world of business, fierce competition reigns, and the same companies multiply like mushrooms after the rain. But thanks to marketing, you can make a difference by arranging everything on the shelves and determining what specifically sets you apart from your competitors. By focusing on this, you can significantly increase the sales of the company.

   

There are several types of SWOT analysis:

• Express analysis is usually used in a limited time environment or for personal assessment. This type is mainly used to identify strengths and when developing a marketing strategy with emphasis on them.
• Consolidated SWOT analysis allows you to visually show the existing picture of the enterprise and future development opportunities. Summary analysis is usually used to achieve strategic goals. Using it, you can quantify the factors identified by other methods (for example, PEST analysis).
• The mixed type is a combination of the two previous types of SWOT analysis. The cross matrix constructed using this method allows a deep analysis of factors and reveals the full picture of events.

How to do a SWOT analysis yourself

When drawing up a marketing plan, many are faced with inconsistencies and inconsistencies in the course of work. For example, a company does not have enough budget for an advertising campaign. The management decides to reduce it and refuse to hold the promotion. But as a result, sales fall even more, and the company goes bankrupt. Yes, this is an exaggerated case, but still, such scenarios also take place in real life. If the director of this company did the SWOT analysis on time, he would have reviewed this strategy and the company would have stayed afloat. In order to make a SWOT analysis, it is not necessary to seek the help of specialists. Anyone can do this, and several questions will help in this:

• What strengths does your company have and how can they be used to increase competitiveness?
• What are the weaknesses of your business? Are they the reason for the decrease in competitiveness and how can they be leveled?
• Which parties should you pay attention to first of all?
• What measures should be taken to protect your company from negative factors in the future? What actions will help reduce risks?
• What external political, economic, climatic, social factors have an impact on your business? Does this influence have a negative or positive connotation?
• How can external factors be used for the benefit of the company?

  

The SWOT analysis matrix on the example of the enterprise should be a table in which all factors in the corresponding columns are painted. In the classic version, in four tablets you indicate the strengths, weaknesses of the business, then the opportunities and threats that may await you.

The procedure for conducting a SWOT analysis

How to do SWOT analysis of an enterprise? For self-analysis, you will need to perform several consecutive steps:

1. Preparation. In this part, you need to conduct a study of the market, product characteristics and customer reviews. Then competitors and their advantages should be analyzed. Strengths and weaknesses of the company should be considered precisely in the light of competition with other firms. So, your advantages can be a significant help in further marketing strategies, and knowledge of the weaknesses will allow you to eliminate or reduce them in time.
2. Next, you will need to identify all the opportunities and threats that may await you in the future. To do this, in the appropriate columns you need to write out all the factors that somehow affect the company's sales.
3. At this step, all collected information needs to be structured. The SWOT analysis matrix on the example of an enterprise should be a table with four sections and factors in the corresponding columns, in which data on the degree of importance are recorded.
4. And finally, based on the study, conclusions can be drawn. To do this, you need to describe how you can improve the competitiveness of the business, relying on the strengths of the product. Vulnerable qualities are worth trying to make strong, and, if this is not possible, to minimize undesirable consequences. To protect against the threat, it is also worth developing a number of strategies that will help to reduce risks for the company as soon as possible.

   

Key factors for SWOT analysis

There is a certain set of factors that are analyzed during the SWOT method:

• Product properties, the ability to satisfy certain customer needs.
• The fame of a product’s brand is how much it is heard by people.
• Product evaluation by consumers, which often differs from the real state of things.
• The price of the goods and the breadth of assortment, market availability.
• The presence of advertising campaigns and established strategies for promotion.
• The effectiveness of technologies that are used in business.
• The ability to enter new markets.
• Attracting new customers, winning the attention of other target groups.
• The ability to reduce production costs thanks to modern technology (not at the expense of quality).
• The economic environment, financial crises, laws and taxation that exist in the field of the company.
• The possibility of expanding the range of products.

When is it worth doing a SWOT analysis of a trading company? It is useful if you need a quick and effective method for forming a picture of the current situation of the business and for modulating the strategy. It is accurate enough, but it only reflects the most crude information. You can compare it with a rear view mirror, which shows only a fragment of the whole picture. SWOT analysis can also be used in conjunction with other methods that can complement and enrich it.

SWOT Analysis Example

Many students write graduation qualification work on the subject of "SWOT analysis of the enterprise." WRC helps to understand and understand in detail this marketing tool. But since we don’t need to get a diploma, we can restrict ourselves to simple examples, on the basis of which it is easy to understand the logic of the SWOT method. The SWOT analysis of the enterprise should be based on exclusively truthful and fresh knowledge. To provide significant assistance in drawing up a marketing strategy can matrix SWOT. By carefully looking at the intersection of the graph, you can get ready-made tactical actions aimed at all areas of the company.

• Columns “S” and “O” are ready-made actions that must be added to the mandatory list for the further development of the company. After all, they are already working, which means that they can be successfully applied in the future.
• The intersection of columns “W” and “O” will help develop a protection strategy. To do this, you need to pay special attention to weaknesses and think about how opportunities can change the current state of things for the better.
• “S” and “T” can help to avoid some threats through the development of the strengths of the company. For example, you know that your product has a wide range and high quality. But on the shelves may appear copies of competitors at a lower price. After conducting a SWOT analysis, it can be assumed that this problem will disappear if you make an additional line that is more economical and affordable for the buyer. Looking through each of the threats, you need to consider the strengths as an opportunity to protect yourself from negative factors and minimize risks.
• Moving to the bottom of the table “W” - “T”, it is worth analyzing which of the weaknesses directly or indirectly affect the growth of threats and which of them should be neutralized in the first place.

SWOT analysis of agricultural company

An example of how to do a SWOT analysis of an enterprise can be found in every area of ​​the economy. Let us analyze an agricultural enterprise that is well-known in the market and has good competitiveness, but profit and technology suffer. It should be noted that when compiling a SWOT analysis of an agricultural enterprise (and any other), do not make too long lists. This will only lead to ambiguity and vagueness and will not improve the situation. In the case of a dairy farm, the SWOT analysis will look like this:

1. The external environment (features):

• International contracts and the prospect of selling goods abroad.
• Entering new markets for goods.
• Increased consumer demand for products due to the fashion for healthy foods.

2. The external environment (threats):

• An increasing number of competitors.
• High level of taxation in the country.
• Economic crisis and declining purchasing power.

3. The internal environment (strengths):

• Great production opportunities.
• Long experience, skills of company executives.

4. The internal environment (weaknesses):

• Distrust of buyers due to an unformed personal brand.
• Lack of effective sales strategies.

5. The internal environment (features):

• The introduction of new technologies in production, reducing costs.
• Own processing of products.
• Establishing contact with new suppliers and contractors.

Internal environment (threats):

• Frequent change of frames.
• Short shelf life of products.
• Lack of advertising.

An example of an analysis of a construction company

Using the example of a construction company, the SWOT analysis also clearly shows the effectiveness and relevance of its timely implementation. Take, for example, StroyDom, a company registered in Moscow. The main of the company's strengths, weaknesses, as well as threats and opportunities that the external environment puts forward, must be entered into the SWOT analysis matrix.

1. The strengths of the enterprise can be considered good recognition and communication in the city government. Thanks to these factors about StroyDom, there are many positive reviews on the Internet, and the scheme for obtaining permission to build a house has been worked out, i.e. does not slow down the deadlines for the completion of the facility.
2. Weaknesses include material savings and systematic non-payment of wages to employees. In the future, this may adversely affect the company's reputation.
3. External factors provide a number of opportunities that can play into the hands of the construction business. The economy class sector in suburban construction is actively developing, but there are few competitors. In addition, the company may enter the market in related fields.
4. Environmental threats consist in foreign currency surges, which can increase the cost of assets. The economic crisis reduces the purchasing power of the population, which is reflected in demand.

What conclusions can be drawn from this table? You can outline an approximate development strategy for the company. The income can be increased through the acquisition of a land plot, on which the company will subsequently be able to build up a sector with private houses of economy class. Since the organization has a cash deficit, the manager can take out a loan to buy land. He will most likely be approved, as the company has a good reputation and there is already existing real estate that can be mortgaged. To maintain high competitiveness, one should abandon saving on materials and look for other methods to reduce costs. Thanks to this simple analysis, this construction company will probably be able to avoid many difficulties and mistakes.