1.Overview of SWOT analysis
SWOT analysis, namely Dawes matrix, is the basic work of strategic management scheme design and one of the commonly used means of strategic management. SWOT analysis is an analysis of strengths, weaknesses, opportunities and threats (Figure 3-4[53]).
There are two main purposes of SWOT analysis: one is to help find the most important factors affecting the organization and the market from the inside and outside of the organization, and quickly summarize the key issues for decision makers to make decisions. The second is to help form the organization's strategy by examining the internal strengths and weaknesses of the organization and linking them with opportunities and threats outside the organization [53]. Using advantages can form offensive strategy and defensive strategy; The purpose of judging disadvantages is to help understand where the organization is vulnerable to market changes or competitors' attacks, so as to design corresponding strategies to resist or avoid them.
Figure 3-4 SWOT Analysis Diagram
2.SWOT analysis steps
The analysis steps include five parts:
The first step is to analyze and study the current strategic situation of the enterprise in order to obtain detailed information about its advantages and disadvantages.
The second step is to study the external environment of the enterprise, including macro environment and market environment. You can use Mike Porter's five-force model (the competition between new entrants, substitutes, buyers' bargaining power, sellers' bargaining power and existing competitors will determine the profitability of the organization and also affect the industrial attractiveness) or PEST model.
The third step is to confirm the key capabilities of the enterprise and the key factors restricting the enterprise.
Figure 3-5 Map of Boston
The fourth step is to analyze and study the relationship between the strengths and weaknesses of the enterprise and the opportunities and threats, and fill in Figure 3-5 or Figure 3-6[53]. The analysis in Figure 3-6 is more detailed than that in Figure 3-5, but the analysis idea is the same. The situation in Figure 3-5 should be handled separately. Make full use of the conditions falling in the 1 area; Conditional improvement belonging to zone 2; Those who fall in zone 3 should be eliminated as much as possible; Those belonging to Zone 4 should be monitored to prevent them from becoming unfavorable factors or favorable factors and being used.
Figure 3-6 GE matrix
The fifth step is to evaluate the selection strategy. Figure 3-7[53] shows that S O District has great opportunities and many advantages. We should go all out to seize the opportunity quickly and bring more benefits to the organization. There are many opportunities and disadvantages in Woqu, so we should try our best to avoid or improve the disadvantages and create more conditions to seize the opportunities. ST area has many advantages and great threats, so we should use advantages to reduce or avoid threats, which will help to seize opportunities or turn threats into opportunities. WT is a big threat and has many disadvantages, so we should carefully consider whether to carry out this business or enter this market.
Figure 3-7 Distribution of Strategic Models