The SWOT Analysis. An Instrument of Strategic Corporate Management?


Term Paper, 2014

18 Pages, Grade: 1,0


Excerpt


Table of contents

List of figures

1. Introduction
1.1Problem statement

2. Basics
2.1 Definition SWOT Analysis
2.2 Company Analysis: Strengths and Weaknesses
2.3 Environmental Analysis: Opportunities and Risks

3. SWOT Application
3.1 SWOT Concentration
3.2 SWOT strategies
3.3 SWOT Analysis: Instrument of Strategic Corporate Management
3.4 Criticism

4. Conclusion

Bibliography

List of figures

Fig. 1: SWOT Strategies

Fig. 2: Areas Strengths-Weaknesses Profile

Fig. 3: Strengths-Weaknesses Profile

Fig. 4: Example Environmental Analysis

Fig. 5: SWOT Quadrants

Fig. 6: Result SWOT Analysis

1. Introduction

1.1 Problem statement

Constant change is the norm. This is accompanied by an influence on well-known considerations, methods and strategic thrusts. Around the world, business leaders are thinking about where opportunities are or where high-risk risks can arise.1 The current conditions are complicated by a high level of dynamism within the corporate environment, which means that persistently resilient conditions and the associated security within corporate planning are no longer guaranteed.2. It is therefore not surprising that the global economy has plunged into a long-unthreaty crisis. As a result, in addition to internationally operating corporations, even entire countries have been hit hard. Almost every day, these companies therefore report effects on their company figures or announce existentially threatening conditions. Nevertheless, there is hope: There are companies that are using this situation as an opportunity and, through improved positioning, will even come out of this crisis situation better than they came in.3

However, since market opportunities must be identified in order to be able to use them successfully, it is necessary to have indicators that show these opportunities and, in this context, also express how the respective opportunity can be used. However, risks should also be uncovered and the personal strengths and weaknesses of the company taken into account. because: Only those who have a sophisticated strategy can confidently look forward to market events and be successful in the long term. The SWOT analysis is to be described as such an indicator and is therefore the subject of this work.

1.2 Objectives and structure of the work

The aim of this work is to provide a conceptual definition of swot analysis and to describe what the actual use of this method is. There is also an explanation of why the SWOT analysis is an instrument of strategic corporate management. To this end, the work is divided into a total of four chapters. The first chapter is the introduction to this work. The second chapter defines the basics of corporate and environmental analysis. Chapter three then shows how and for what purpose the information obtained from the upstream analyses can be used and places the method in the context of strategic corporate management. Finally, the conclusion with a critical appraisal of the SWOT analysis forms the end of this work.

2. Basics

2.1 Definition SWOT Analysis

The SWOT analysis represents the origin in the long-term planning process and analyzes in this context the current strengths and weaknesses of the company as well as the opportunities and risks (= threats) of the market. These influencing factors are determined on the basis of the company analysis (internal) and the environmental analysis (external).4

Following these analyses, a consolidation of the important factors is carried out in order to be able to present the essential points clearly in a matrix.5 From this, a derivation of the long-term development of the company can now take place and thus a strategy development can take place. The SWOT analysis thus serves the actual analysis of the company with subsequent support for strategy development and the resulting long-term corporate management.6

The actual result of the SWOT analysis is to assess whether and to what extent the information obtained will have an influence on the company's development and how this can be counteracted. These findings are presented in the following way:7

Abbildung in dieser Leseprobe nicht enthalten

Fig. 1: SWOT Strategies

Source: Own presentation based on Horvath (2011), p. 333.

The derivation of these SWOT strategies and all upstream steps are now described in the following chapters. For a better understanding, each chapter contains a practical example, some of which build on each other.

2.2 Company Analysis: Strengths and Weaknesses

The company analysis pursues the goal of presenting the current strengths and weaknesses as neutrally as possible. This goal can be achieved through various tools. The analysis of the strengths and weaknesses, among many other methods, is a possible traditional means of business analysis. The strengths weakness analysis aims at the "identification and evaluation of the internal resources and capabilities of a company or a strategic business unit"8 Off.9 For this purpose, the most important areas of investigation must be identified at the beginning, which often extend to the following:

Abbildung in dieser Leseprobe nicht enthalten

Fig. 2: Areas Strengths-Weaknesses Profile

Source: Own presentation based on Stephan (2010), p. 90.

The knowledge gained regarding the strengths and weaknesses in these areas will now be compared with the competition in order to determine which strengths exist and which weaknesses should be reduced.10 These findings are then weighted.11

Strengths can be, for example, a broad range of products, an excellent qualification level of the employees, a good reputation or a large regular clientele that has gradually been built up. Weaknesses, on the other hand, are a non-existent financial cushion to meet a permanently low price level, product production from raw materials with a considerable fluctuation range in terms of purchase price and exchange rate, too long a time between customer order and delivery or a lack of motivation among employees.12

[...]


1 cf. . KPMG AG (2014): Märkte ohne Grenzen.

2 cf. PricewaterhouseCoopers AG (2011): 3 Minuten für Ihr Unternehmen.

3 cf. Ernst & Young GmbH (2014): Schwierige Märkte - neue Chancen.

4 cf. Horvath (2011), p. 329.

5 cf. Stephan (2010), p. 83.

6 cf. Scheld (2012), p. 242.

7 cf. Horvath (2011), p. 332.

8 Camphausen (2013), p. 53.

9 cf. Camphausen (2013), p. 53.

10 cf. Kreikebaum (1997), p. 139.

11 cf. Stephan (2010), p. 90.

12 cf. Scheld (2012), p. 68.

Excerpt out of 18 pages

Details

Title
The SWOT Analysis. An Instrument of Strategic Corporate Management?
College
University of applied sciences, Marl
Grade
1,0
Author
Year
2014
Pages
18
Catalog Number
V1181913
ISBN (eBook)
9783346595164
Language
English
Keywords
swot, analysis, instrument, strategic, corporate, management
Quote paper
Roman Wächter (Author), 2014, The SWOT Analysis. An Instrument of Strategic Corporate Management?, Munich, GRIN Verlag, https://www.grin.com/document/1181913

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