SWOT analysis and tips
The SWOT analysis is carried out after the target has been defined. It forms the basis for the subsequent choice of strategy.
The SWOT analysis is an extremely important step in the strategic planning process, as errors in this phase can lead to a wrong strategic orientation of the entire company.
The environmental analysis, on the other hand, aims to identify and document all external influences on the company and to forecast changes. A distinction is made between the global environment and the competitive environment, i.e. the company’s immediate environment. The environment analysis tries to find answers to the following questions:
- What are the economic and technological conditions under which the company works now and in the future?
- What competitive situation is the company in and how will it change?
- Which trend developments are emerging on the market and can the company react to them or set trends itself?
- How many main competitors are there, how strong are they and which ones will be added in the future?
Identification of opportunities and threats
In order to identify opportunities and dangers that can be derived from the corporate environment or that affect the company from there, the relevant influencing variables of the global corporate environment must first be determined. The following types of global environmental conditions can be distinguished:
The next step is to identify and evaluate the environmental conditions of the competition. This includes in particular the industry, market and competitive environment.
Methods and techniques of environmental analysis
Various methods and techniques can be used to analyze the corporate environment, for example:
- Environmental scanning and monitoring
- Delphi method
- Scenario technique
Analysis of opportunities and risks
Opportunities and risks arise for the company when the identified environmental conditions, i.e. opportunities and dangers, meet certain strengths or weaknesses in the company. The real challenge of the SWOT analysis is to work out these relationships.
The SWOT analysis is best carried out in a workshop, in which the strengths, weaknesses, opportunities and risks are systematically
worked out , e.g. with the help of catalogs and checklists. Their weighting and evaluation should, if possible, be done by consensus.
Vision (corporate mission statement) and environmental conditions
The starting point of strategic planning is the company’s vision. A vision is a strategic long-term goal with which the direction for the future is determined on the basis of a well-defined task or a clear company goal and a clear value system. In order for a vision to be able to fulfill this function, it must clearly distinguish itself from the statements and goals of competitors. A successful vision is characterized by the following characteristics:
Characteristics of a vision
- is easy to understand and easy to communicate,
- serves as a guideline for the future,
- has a clear focus,
- enables employees to identify emotionally,
- expresses goals that are challenging and desirable,
- allows the contribution of each individual actor to be clearly deduced,
- is valid for a limited time and
- clearly differentiates itself from the visions of competitors.
The most important interest and stakeholder groups are:
- Owner: You provide the company with permanent financial resources and expect an appropriate return on your capital investment.
- Lender: You provide the company with temporary financial resources and expect interest and repayments in return.
- Customers: They expect products and services that meet their requirements and have a certain price-performance ratio, and they pay the purchase price for them.
- Employees: They perform work for the company and expect wages and salaries to be paid in return. They are also the source of ideas who develop the company further. For this, too, you can expect certain considerations, e.g. career opportunities.
- Suppliers: They supply the company with materials and services and expect a corresponding fee and a long-term business relationship.
- State and society: They create the legal and cultural basis for economic activity and expect consideration in the form of taxes and other charges.
Main objective and sub-objectives
The listing of the various interest groups makes it clear that in addition to the main entrepreneurial goal of profit maximization, a number of
other sub -goals are required in order to meet the demands of those interest groups. The currently heated discussion about the pros and cons of the shareholder value concept shows that companies are not to be seen as an end in themselves, but also have to serve other interest and stakeholder groups, in particular the common good, and accordingly in a socio-political one Take responsibility.
Initially, no quantified goals.
When deriving corporate goals, quantified goals should initially be avoided. The reasons for the impossibility of
setting quantified goals at the beginning of the strategic planning and decision-making process lie in particular in the following factors:
- Increasing dynamics and complexity of the environmental conditions: It makes it impossible to record and evaluate the effects of all influencing variables on one or a few target variables.
- Growing competitive pressure: In connection with rapid technological change, it has meant that opportunities for success occur less frequently and are more difficult to find than in earlier times.