SWOT analysis

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The SWOT analysis (Engl. Acronym for S trengths (strengths) W eaknesses (weaknesses), O pportunities (opportunities) and T hreats (risks)) is a strategic planning tool.

It is used to determine the position and to develop strategies for companies and other organizations.

Opportunities are opportunities to win existing and / or new customers or to keep regular customers through new and / or improved products and services . These opportunities can be jeopardized by (attractive) offers from competitors or by technological and economic policy changes (risks). As soon as the risks become too great from the point of view of those responsible, suitable measures must be taken. The selection of actions is based on the decision-makers' assessment of their own strengths and weaknesses (compared to the competition).

Origin and application

Create a SWOT analysis: Analysis - Strategy - Success control

The SWOT analysis was developed for use in companies at Harvard Business School in the 1960s . According to Henry Mintzberg , it is the basis of almost all attempts to formalize the process of strategy development (as opposed to strategy as an innovation or creative creation). The principles of SWOT analysis are considerably older than their application in organizations.

The Chinese general, military strategist and philosopher Sunzi (544 - 496 BC) says: “If you know the enemy and yourself, you do not have to fear the outcome of a hundred battles. If you know yourself but not the enemy, you will suffer defeat for every victory you achieve. If you know neither the enemy nor yourself, you will be defeated in every battle. "

If this basic idea is transferred to a company, the recommendation is to carefully analyze the environment for opportunities and risks or dangers and to be aware of your own strengths and weaknesses. The core of the strategy then consists in the decision about which of these strengths the company wants to use to realize which opportunities (possibilities). In addition, there is the definition of the implementation measures, budgeting and the selection of suitable key figures for monitoring progress and success.

This process of using the SWOT analysis according to Henry Mintzberg, Philip Kotler as well as Robert S. Kaplan and David Norton should be summarized in the graphic opposite.

This type of strategy involves so-called matching strategies (exploiting opportunities through matching strengths in the company). Often it is necessary to use transformation and neutralization strategies instead or in addition. It is about converting weaknesses into strengths or from risks into opportunities - or neutralizing risks or weaknesses.

method

The general procedure starts with the environmental and company analysis, which can be represented in a matrix. Various strategic consequences can then be derived from the combination of the analyzes:

Environmental analysis (external analysis)

In the external analysis, the corporate environment is examined, one also speaks of environmental analysis . The opportunities and dangers come from outside and result from changes in the market, in the technological, social or ecological environment. The environmental conditions are given for the company, the forces acting here are largely exogenous . The company observes or anticipates these changes and reacts to them with strategy adjustments.

Company analysis (internal analysis)

Strengths and weaknesses relate to the company itself, i.e. result from the company's self-observation. That is why one speaks of the inworld analysis . The company produces strengths and weaknesses itself, they are characteristics of the company or are created by the company itself, so they are the result of organizational processes.

Combinations

  1. Company analysis : looking for strengths and weaknesses. Use of moderation techniques and formation of group consensus . Grouping, structuring and weighting of these, if necessary use of brainstorming . The strengths and weaknesses are listed in the corresponding matrix fields with the corresponding titles.
  2. Environmental analysis: Search for the strategically relevant opportunities and threats.
  3. An attempt is now made to maximize the benefits from strengths and opportunities and to minimize losses from weaknesses and dangers. For this purpose, the following combinations are searched for, and the question is asked which initiatives and measures can be derived from them:
    1. SO strength-opportunity combination: which strengths match which opportunities? How can strengths be used so that the realization of opportunities increases?
    2. ST Strength-Danger Combination: Which dangers can we counter with which strengths? How can existing strengths be used to avert the occurrence of certain dangers?
    3. WHERE combination of weaknesses and opportunities: Where can opportunities arise from weaknesses? How can weaknesses be developed into strengths?
    4. WT combination of weaknesses and threats: Where are our weaknesses and how can we protect ourselves from harm?

Several strengths can certainly be used to realize an opportunity or avoid a danger. The greatest threats can also be suspected where a combination of weaknesses confronts one or more threats.

Based on these combinations, suitable strategies must then be developed and coordinated. This is certainly the most demanding part of the process.

The core strategies are then entered into the four-field matrix.

Summary: SWOT model in matrix representation

The dimensions of the SWOT analysis model are often represented in a SWOT matrix, which can be structured as follows:

SWOT
analysis 		Internal analysis
Strengths Weaknesses
E
x
t
e
r
n
e

A
n
a
l
y
s
e 		Opportunities
(Opportunities) 		Strategic goal setting for SO:
Pursuing new opportunities that fit well with the company's strengths (matching strategy). 		Strategic objective for WO:
Eliminate weaknesses in order to take advantage of new opportunities, i.e. convert risks into opportunities (conversion strategy ).
Risks
(Threats) 		Strategic goal setting for ST:
Use strengths to ward off risks and dangers (neutralization strategy ). 		Strategic goal setting for WT: Develop
defense strategies in order not to let existing weaknesses become the target of threats.

Common mistakes

The decisive factor for success are always concrete and goal-oriented measures that must be implemented consistently.

The following errors can often be observed in published SWOT analyzes:

  1. Carrying out a SWOT analysis without agreeing on a goal (a target state) beforehand . SWOT analyzes should always be based on a goal and not be abstract. If the desired target status is not agreed, the participants will achieve different target statuses, which leads to poorer results.
  2. External opportunities are confused with internal strengths. They should be kept strictly apart.
  3. SWOT analyzes are confused with possible strategies. SWOT analyzes describe states, while strategies describe actions. In order to avoid this mistake, one should think of “favorable conditions” when it comes to opportunities and “unfavorable conditions” when it comes to risks.
  4. No prioritization is made in the SWOT analysis. No concrete measures can be derived, so measures are neither decided nor implemented.

Alternative view of SWOT analyzes

Like most management models, SWOT analyzes are based on a rational view of the world, in which an analysis identifies strengths, weaknesses, opportunities and threats and then develops rational strategies to use or combat them. For companies, the semblance of rationality is important in order to maintain their access to resources and to maintain the trust of the stakeholders by giving the appearance of "good management".

In modern organizational research this picture is being questioned more and more. The American organizational psychologist William H. Starbuck observed that companies cite SWOTs as a reason for activities after the activity has been carried out. So here the order is reversed and SWOTs are listed as subsequent ( post hoc ) rationalizations for decisions.

literature

  • Gary Hamel : The Why, What and How of Management Innovation. In: Harvard Business Review. February 2006.
  • Richard Hofmaier: Capital goods and high-tech marketing (ITM). VMI, Landsberg 1992, ISBN 3-478-22650-3 .
  • Robert S. Kaplan , David Norton: The Strategy Focused Organization. Harvard Business School Press, Boston 2001.
  • Philip Kotler , Kevin Lane: Marketing Management. 13th edition. Prentice Hall, Upper Saddle River 2009.
  • Philip Kotler, Roland Berger , Nils Bickhoff : The Quintessence of Strategic Management. Springer, Berlin 2010.
  • Henry Mintzberg : The Rise and Fall of Strategic Planning. The Free Press, New York 1994.
  • Kevin Riemer: Communication from Nonprofit Organizations. Basics of communication policy and SWOT analysis of UNICEF Germany. AVM, Munich 2009, ISBN 978-3-89975-931-0 .
  • Hermann Simon , Andreas von der Gathen: The great manual of strategy instruments: All the tools for successful corporate management. Campus, Frankfurt am Main 2002, ISBN 3-593-36993-1 .
  • Martin K. Welge , Andreas Al-Laham : Strategic Management. 5th edition. Gabler, Wiesbaden 2008, ISBN 978-3-8349-0313-6 .

Individual evidence

  1. ^ Heribert Meffert, Christoph Burmann, Manfred Kirchgeorg: Marketing. 10th edition. Gabler, Wiesbaden 2008, p. 236
  2. ^ Philip Kotler, Kevin Armstrong: Marketing Management. 13th edition. Prentice-Hall, Upper Saddle River / New Jersey, 2009, p. 50 f.
  3. ↑ Philip Kotler, Roland Berger and Nils Rickhoff: The Quintessence of Strategic Management. Springer-Verlag: Berlin 2010, p. 30
  4. ^ Henry Mintzberg: The Rise and Fall of Strategic Planning. The Free Press: New York, 1994, p. 36 and on strategy as innovation see: Gary Hamel: The Why, What and How of Management Innovation. In: Harvard Business Review , February 2006
  5. ^ Robert M. Grant: Contemporary Strategy Analysis. 3. Edition. Blackwell Publishers, Malden 2000, ISBN 0-631-20780-5
  6. ↑ James Clavell (ed.): Sunzi, The Art of War. Droemer Knaur, Munich 1988, p. 39
  7. ↑ http://www.wpelz.de/ress/swot.pdf
  8. ^ Philip Kotler, Kevin Lane: Marketing Management. 13th edition. Prentice Hall, Upper Saddle River, 2009, p. 48 f .; Henry Mintzberg: The Rise and Fall of Strategic Planning. The Free Press, New York, 1994, p. 37; Robert Kaplan, David Norton: The Strategy Focused Organization. Harvard Business School Press, Boston 2001, pp. 284 f.
  9. ^ Christian Homburg, Harley Krohmer: Marketingmanagement. 3. Edition. Gabler, Wiesbaden 2009, p. 480.
  10. ↑ Homburg, C., Krohmer, H .: Marketingmanagement, 3rd edition, Wiesbaden 2009, p. 3479 ff.
  11. ^ Edda Weimann, Peter Weimann: High Performance in Hospital Management Springer, Wiesbaden 2012, pp. 26–29, ISBN 978-3-642-25067-5
  12. ↑ Homburg, C., Krohmer, H .: Marketingmanagement, 3rd edition, Wiesbaden 2009, p. 480
  13. ↑ Jeffrey Pfeffer: Power in organizations. Pitman, Marshfield, MA 1981; cited in Karl E. Weick Sources of order in underorganized systems: Themes in recent organizational theory. In: Karl E. Weick (Ed.): Making Sense of the Organization. 2001, pp. 32-57
  14. ^ William H. Starbuck: Organizations as acting generators. In: American Sociological Review. 48, 1983, pp. 91-102; cited in Karl E. Weick Sources of order in underorganized systems: Themes in recent organizational theory. In: Karl E. Weick (Ed.): Making Sense of the Organization. 2001, pp. 32-57