In the modern world, a person constantly makes decisions in any situation. Before making a choice, you need to carefully weigh the pros and cons. In business, situation analysis is even more important because the success of the company is at stake. That is why even at the stage of developing your business plan, you need to conduct a so-called SWOT analysis, which will reveal new facts about your company and its capabilities. So let's go!
SWOT analysis: what is it
This method of analysis is aimed at a primary assessment of the current situation in order to identify the company's strengths and weaknesses, as well as threats to it from the outside and opening opportunities.
The abbreviation SWOT stands for: S - Strengths, W - Weaknesses, O - Opportunities, T - Threats. The first two concepts of SWOT analysis mean strengths and weaknesses, respectively. The third is the company's opportunities, and the fourth is the threats.
Usually, swot analysis is presented as a square matrix or table consisting of two columns and two rows.
When should it be done?
Swot-analysisshould be done if:
- need to identify the effectiveness of the future business, product;
- need to analyze existing business;
- investment benefits and risks need to be assessed;
- required to rethink the policy and mission of their organization;
- need to find a way out when a major competitor appears.
In these and other situations, analysis will help determine how competitive a company or product is, what weaknesses should be addressed in order to eradicate them, what risks exist and how to cover them with new opportunities.
What is needed for analysis
First of all, you must have a perfect knowledge of all information about the company (from the name to the sale to the client). SWOT analysis does not like vagueness and subjectivity.
Secondly, there is no need to feel sorry for yourself and your company in terms of criticism, you should not mention what is not there. Otherwise, the result will be an invalid picture. If the initiator of the study doubts his knowledge in any area, then the involvement of personnel is allowed. After all, he, like no one else, knows the organization from the inside.
Third, research will take some time. The terms are completely different, but it is better not to rush and fill each quadrant of the matrix with feeling, really, with the arrangement.
Types of analysis
Express analysis allows you to find out what advantages, together with opportunities, will prevent threats and what disadvantages will thisinterfere.
Summary: there is a use of numerical indicators of the organization's activities. Also, this view contributes to instant strategy development. The downside is the complexity and time consuming.
Mixed. As the name implies, it contains elements of the first two types. It is deeper. At the very beginning, a strategic analysis is carried out.
Sections of the SWOT-analysis matrix and their characteristics
Now let's take a closer look at the quadrants of the matrix and look at the basics of SWOT analysis.
- Benefits. When we have chosen the object of research, for example, whether to launch a new type of product on the market, we need to collect in the upper left field all the advantages of the company (enhanced advertising, long life cycle, USP (unique selling proposition), quality equipment, qualified personnel, location, low cost, cooperation with intermediaries, etc.).
- Flaws. This should include the remaining aspects that were not included in the first group. That is, if you did not indicate in the merits information about the high quality of the product, then most likely this is a minus for the company. You will have to work on this in the future. Other examples: the high cost of delivery to the shelves, the presence of many intermediaries in the distribution channels, the low return on advertising campaigns. It is in this column that you should not embellish and wave your hand at the weaknesses of the company. Every little thing is important, as, in principle, in the whole analysis.
- Opportunities. In fact, these are promising directions for the development of the enterprise. Here again, compare yourself to your competitors. Why they can offer the client an installment plan, for example, but you can't. Here is an opportunity for development. Other examples: organize door-to-door delivery, online ordering, opening another outlet, and so on. The technical equipment of the company plays an important role. What do you have that your competitor doesn't have that could benefit you in the future? It all depends on the specifics of your company.
- Threats. Risks should always be considered in great detail and down to the smallest particles. It is important to know if a new competitor is going to enter the market, if the current ones also want to introduce a new product. Perhaps they have advantages in poaching your specialists. There is always a risk, but as they say, he who is warned is armed. Therefore, you need to know exactly what to do if your competitor decides to make a similar product.
Example: hotel restaurant
Let's turn to the practical application of the restaurant SWOT analysis, an example of which we will now analyze.
Let's say that in the city of N. with a population of 400 thousand people in 2014, the Welcome Hotel opened. After 4 years, the founders decided to open a restaurant on the first floor of the hotel. The period of business planning for a restaurant at the hotel has begun. The financial document starts with market research and analysis. After getting acquainted with competitors (isolated restaurants and analogues at hotels) and their features, our owners approached the cherished moment - a SWOT analysis of a restaurant at a hotel. Let's help them in this difficult matter and analyze all the nuances bit by bit.
Strengths and weaknesses
Let's start the restaurant's SWOT analysis properly - from strengths. The advantages of the institution in this case will be:
- high demand for hotel services;
- favorable location of the object - the city center and close to the train station, near an amusement park and a pond with birds;
- prices for hotel accommodation are not higher than the average market;
- high market share due to the lack of similar facilities with restaurants in this area of the city;
- good transport interchange;
- active advertising campaign and high returns;
- convenient working hours of the future restaurant for customers;
- discounts and promotions for guests and regular customers.
This is a list of advantages over other restaurants at hotels in the city. They are the highlight.
Next, let's pay attention to the weaknesses of the hotel and the future restaurant:
- wages of restaurant workers are lower than in separate establishments;
- inconvenient work schedule for restaurant staff (from early morning to late evening);
- restrictions on the menu due to lack of some equipment;
- restaurant unknown;
- prices in the restaurant at the hotel are higher than in its separate counterparts.
Cons can soon turn into pluses if you work on them correctly. Do not immediately rush into all serious trouble to correct shortcomings,just choose 1-3 weighty points to start, fix them, and then the rest.
Opportunities and Threats
Now let's think about the opportunities that hotel and restaurant owners have to improve their business and reach a new level:
- install a convenient payment system (all forms of payment);
- make it possible for guests to order food from the restaurant to the room;
- food privileges for hotel staff;
- expanding the range of menus when purchasing the necessary equipment.
These opportunities can be realized if you try. And they will become the advantages of the restaurant and hotel. Of course, it will not be possible to do everything at once if there is not the required rather large amount in the bank cell. Here again, you need to select the items that are most affordable in terms of cost and significance and optimize them.
In the future, the company will have "trump cards" in stock to maintain competitiveness, as manufacturers of famous brands of smartphones do. After all, they did not immediately release a version of the phone with all the new products, but do it gradually in order to maintain intrigue and retain the consumer audience.
Completing the SWOT analysis of the restaurant, let's talk about logical threats to a new line of business. These will be:
- appearance of a competitive restaurant next to the object;
- decrease in demand for hotel services;
- staff turnover due to low wages;
- lack of demand due to poor menu andhigh prices;
- legislative changes;
- fluctuations in fuel or utility prices;
- increase in purchase prices for semi-finished products and products for the restaurant.
Assuming risks, our heroes will know how to act when a given situation occurs. For example, in the "Risk Assessment" section of the business plan, owners will calculate the break-even point, which will allow them to survive temporary price fluctuations without going negative.
This completes the SWOT analysis of the restaurant, all that remains is to take measures to further develop the company.
Conclusions and generalizations
Undoubtedly, further actions after obtaining a complete picture from the analysis depend entirely on the characteristics of the company. Nevertheless, there are general rules of action that will direct the enterprise in the right direction and help achieve success:
- use your advantage;
- try to eradicate weaknesses;
- invest in opportunities;
- anticipate risks - think one step or even two ahead.
Returning to the example, we can suggest the following course of action:
- make an emphasis in hotel advertising on the opening of a restaurant;
- due to extra. funds to purchase equipment and expand the range of menus;
- to fully exploit your potential;
- create a "hold" offer for staff to avoid turnover;
- reduce the purchase cost of raw materials through agreements with suppliers andmost increase the margin of financial strength.
Thus, we helped hotel owners to see through the SWOT analysis the opportunities, threats, advantages and disadvantages that will later play a decisive role in the restaurant business.
