SWOT is a planning method performed by enterprises to evaluate their Strengths, Weaknesses, Opportunities, Threats. It’s a form use by consulting, to analyze the competition state of a company within his field. Generally, SWOT is used by the company to position itself before it does his planning development strategies. On doing a SWOT, the company comes to realize his internal state (his strengths, weaknesses) and his external factors(opportunities and threats). Then, the company analyzes all these elements to make reactions and changes in its project. (for exemple a company whiwh wants to develop its business in China). The typical character of SWOT is that it concerns both what companies are able to do (strengths, weaknesses) and what others make them do(opportunities, threats). It combines internal analysis and external analysis to draw up a structured and balanced inquiry system.Thus the company can know itself more exhaustively. After analysis of SWOT, the objectives should be carefully worked out. A campany can ask the help of professionnal, just like for exemple consulting company in China.
Strengths indicate the capacity to compete with others and what they have to improve their competition in a company. For instance, when there’re two companies in the same market which can both provide the same products or services to the same clients, then it’s the one that has higher profits wins in the competetion. Certainly, strengths of a company exist in many aspects. It can be a good producer, a good team, an advertising operator, etc. Weaknesses represent what a company lacks or what is in a unfavorable condition. The following is what leads to a company’s weaknesses: lack of advanced and competitive technologies, huiman resources, tangible and intangible properties. The potential marketing opportunities that a company face up to is a key point in its decision-making. The management ought to recognize each opportunity and analyze it. So it can select those optimizing the internal structure to strengthen its competition. The outer opportunities are presented as the following: a increasing number of potential clients, favorable policies, etc. Outside the company, it exists often the factors that constitute threats to companies. It should take measures to offset or reduce the loss. That’s the reason why the management should carry out regularly marketing researches to follow the changing market. The threats a company may meet with is: new competitors, substitutes of its own products, the transformation of consumers’ demand, etc.
The above-mentioned points make SWOT a typically structured and systematic consulting method, compared with others. In the realistic application, we usually adopt a grouping of two points such as SO(rely on its strengths, make use of outer opportunities)、ST(make use of internal strengths, avoid outer threats)、WO(reduce internal weaknesses, make use of outer opportunities )、WT(reduce internal weaknesses, avoid outer threats) to determine which strategy to make.
Of course, SWOT is not just to make a list of strengths, weaknesses, opportunities and threats, but to make sense of the relevance among these points. The most important is to draw the following conclusions through the evaluation of the four points in SWOT:
- In actual internal and external conditions, how to utilize our existing resources?
- How can we build future resources?