In this review, SWOT examination is presented with elaborating the steps. Determining and articulating it roles in proper planning and development steps are also covered. Besides, it exemplified regarding organizational performance for small and medium businesses in Egypt.
SWOT which stands for an abbreviation of (strength, weakness, opportunity and menace); is an analysis that defined as method to take a look at organization's internal factors coping with talents and weaknesses, and its own environmental opportunities as well as the threats. SOWT evaluation usually used in the preliminary phase of decision making as an over-all tool which it created for being antecedent to tactical planning in several case and applications. (Johnson et al. , 1989; Bartol et al. , 1991). Predicated on some other definitions like Formisano (2003), SWOT Analysis can be used as a model, process, technique or framework to create information about those factors in firm insurance firms many applications with probability of being used in all the degrees of the organization. So, SWOT can be defined as internal research of organizational Strengths (what an procedure does well) and Weaknesses (what an procedure does not prosper) and the as the external analysis of environmental Opportunities (potential beneficial conditions for an operation) and Dangers (potential unfavorable conditions for an operation); and it is a general tool at the original stages of coverage making and tactical planning and as well, it is a part of the latter levels of analyzing the performance and planning for further development of the business on. SWOT examination is employed as a method in order to develop a planning process and alternatives for the problems that are related with different inside and exterior factors and boost the probable of talents and opportunities as well as minimizing the negations of weakness and dangers (Sharma &Singh, 2010; Schermerhorn, 2006; Bennett, et al. , 2003).
The first step of SWOT examination is a organized evaluation of the organization's resources and capabilities. Durability in SWOT research is connected to competitive advantages and distinguishing competencies of the company in its market environment. But weaknesses can be viewed as as limits that make a difference the progress of the business in a negative way. This analysis includes identifying central competencies by considering special advantages which are superior to the competitors. The key competency is a particular strength gives an organization a competitive edge and it may be within special knowledge or knowledge, superior technologies, productive manufacturing systems, or unique product distribution systems, among a great many other alternatives. Strategy formulation comes with an aim which is to form strategies that leverage central competencies for competitive benefits by making organizational talents and lessening the impact of weaknesses (Houben et al. , 1999; Schermerhorn, 2006).
Figure 1. SWOT Evaluation of Strengths, Weaknesses, Opportunities, and Threats
(Schermerhorn, 2006, p. 88)
Strengths: Strength of your operation is the first inside element of the SWOT analysis. The advantages cover what an operation does well. The talents may be being low-cost maker or high quality product company. It depends upon the perspective (Bennett, et al. , 2003, p. 2).
Weaknesses: The weakness of an operation is another interior element of the SWOT examination. Evaluating weaknesses cover discovering what an operation does not prosper. They need to be reviewed from the inner and external point of view of the operation. Usually all businesses, no matter size or profitability have weaknesses (Bennett, et al. , 2003, p. 2).
Opportunities: Opportunity is the first external component of the SWOT analysis. The opportunities cover any convenient situation in the business's environment that the operation may gain an advantage form. The range can be from diversification and the utilization of new technology to market styles and relationship advancements. And usually all businesses have some opportunities. It is important to analyze them well (Bennett, et al. , 2003, p. 2).
Threats: Another element of the SWOT evaluation is the exterior threats. All procedures can face threats and the threats can range between lower international prices to key connections which have some problems. The operation of the business must take some actions to prevent the external threats (Bennett, et al. , 2003, p. 2). SWOT examination is utilized as inputs to generate possible strategies. And then step is to decide these strategies following the identification and examination of strengths, weaknesses, opportunities and threats (Houben et al. , 1999).
2. 1 SWOT Examination Steps
Based on Houben et al. (1999) as a first step in the development of a proper planning system, business managers therefore commence with the recognition and evaluation of these tactical factors which assist or hinder the company in getting its full potential. Normally every company is confronted with a energetic environment; the comparative need for a tactical factor changes constantly, so the SWOT analysis is correspondingly to be of a everlasting nature. The set of proper factors can be used as a point of departure for the real proper plan within a little or medium sized enterprise. It is a flexible device. The greatest edge is that it can help managers of small and mid-sized enterprises survey the various management areas, gain perception into the relevance within the framework of the business, and accordingly start suitable actions. Bartol et al. (1991) stated that giving an answer to internal talents and weaknesses is therefore an essential component of the strategic management process. But success can only just be achieved in this admiration to the magnitude that one is familiar with the opportunities and dangers caused by the external environment. The acceptance of the internal talents and weaknesses, as well as external opportunities and risks, takes place based on a study, which called SWOT research. Generally no standard set of important factors which make an application for all companies exists due to specificity of this set. Inside the framework of the study, however, we thought we would concentrate only on the internal business environment. This therefore only concerns the identification of advantages and weaknesses.
Strengths thereby relate to the competitive advantages and other distinguishing competencies which may be exploited by the business on the marketplace. A distinguishing competence is something which may be done very capably by a company. Weaknesses, on the other hand, are limits which hinder the progress of your company in a certain way. Weaknesses are those qualities of the organization that impede attaining the objective and limits or deficiency in one or more resources or competencies in accordance with competition that impedes a firm's effective performance. Opportunities are external conditions that help achieve the target major situation in a firm's environment. Key tendencies are one source of opportunities and recognition of a recently overlooked market segment, changes in competitive or regulatory circumstances, scientific changes, and increased buyer or provider relationships could symbolize opportunities for the company. Hazards are also outside conditions that impede attaining the objective and impediments to the firm's current or desired position. The access of new competition, slow market expansion, increased bargaining power of key buyers or suppliers, technical changes, and new or modified regulations could stand for risks to a firm's success (Mintzberg and Quinn, 1991). Matching Johnson et al. (1989) ; Bartol et al. (1991) taking proper actions is preferred for the organizations to maintain or sustain talents, offset weaknesses, avert or mitigate risks, and capitalize on opportunities. Strategies can consider as the balancing act between the exterior environment like opportunities and risks and the inner capabilities of the firm such as strengths and weaknesses. Essentially SWOT analysis can be an extremely useful tool for understanding and decision-making for a variety of situations running a business and organizations.
As an initial step in the introduction of a proper planning system, business managers should therefore commence with the identification and evaluation of these strategic factors which assist or hinder the company in achieving its full probable. Because every company is met with a energetic environment, the comparative importance of a strategic factor changes constantly, so this analysis is consequently to be of a long lasting nature. In determining SWOT a particular factor is pertinent only with regards to a specific target. For example, a large cash balance is power if the objective is growth. If the target is to discourage a hostile take-over, a large cash balance is a weakness. The SWOT examination headings provide a good construction for researching strategy, position and way of any company or business proposition, or any other idea. Doing a SWOT research may also be simple and useful which is often used for business planning, proper planning, competitor analysis, marketing, business and product development and research information (Houben et al. 1999).
The advantages and weaknesses are available in the efficient company areas, or they may be a rsulting consequence abnormal connection between different domains. Furthermore, the strengths and the weaknesses of an element must be measured at different levels of the organization; this is at group level, at individual company level or at product or market level. The evaluation of the performances of days gone by might not be neglected with the measuring of advantages and weaknesses since it provides historic insight into the strategy of the company previously carried out as well as the successes consequently achieved (Glass, 1991). Historic investigations may well not only be limited to the pure research of the pathways followed by the organization in the past and the results achieved, they must also devote focus on the reasons because of this success. Using the lists compiled, sort out and group facts and ideas with regards to the objectives. It might be necessary for the SWOT individuals to select their five most important items from the list in order to gain a wider view. Quality of aims is a key to the process, as analysis and reduction will be necessary to cull the wheat from the chaff. Although some aspects may require more info or research, a definite picture should, at this stage, start to emerge in response to the targets (Johnson et al. , 1989; Bartol et al. , 1991).
3. SWOT Research and Strategic Planning
SWOT analysis is principally area of the strategic planning process buy learning on interior and external makes in the business environment of a company of corporation. As a first step of your proper planning system, the tactical factors that are related with the potential of the company, should be discovered and examined. The id and evaluation of the strategic factors helps to reach an actual proper plan and as a result the managers are able to gain information of internal and external mother nature of the business and establish appropriate actions in order to reach good performance (Houben et al. , 1999, p. 2) To be able to have good performance in proper planning, the near future objectives on the company's power and the weaknesses of the business must be considered by the company. Internal advantages and weaknesses are the main components of the proper management process but it must be strengthened with considering opportunities and dangers from the exterior environment.
According to Hill and Roy (1997, p. 46), SWOT research is one of the most straightforward methods for inspecting the strategy of a business. SWOT as it described before, is the acronym for "strengths, weaknesses, opportunities and risks" which according to Zack (1999, p. 126) SWOT construction is one of the well-known methods to define a technique. Considering Zack, Hill and Roy assertions about SWOT, it can conclude that approach can be used to be able to define and evaluate organization's strategy. This research consists of two parts. First, we have to analyze the inner characteristics and features of the organization, which research helps us to identify the strengths and the weaknesses that the business has. In the second part, we must analyze the external situations in the competitive environment, which this research helps us to recognize the opportunities and the risks that the business may faces. After identification of the four factors, a strategy for the business can be provided. Predicated on Zack assertion (1999, p. 127) strategy is the action of managing between interior and exterior situations of a given company. And a good strategy is the one which ensure a fit between exterior situations of the company using its own internal features (Hill and Westbrook, 1997, p. 47). This evaluation was in electricity for at least 30 years. Zack (1999, p. 128) thinks that companies who've superior knowledge, can preserve their competitive benefit by the use of those knowledge to be able to combine, organize, develop and exploit their resources and capabilities in a fresh way and much better than their competition. Buckman Labs competed using markets predicated on its superior knowledge of how to use its chemicals to solve the process treatment problems of its customers.
After explaining SWOT construction in earlier section, and talking about knowledge as a proper property and the sustainable competitive advantage that could be performed through the application of the data that exists within an organization, the author (Zack, 1999, p. 130) proposes that: "Firms need to perform a knowledge-based SWOT examination, mapping their knowledge resources and capacities against their proper opportunities and dangers to raised understand their things of benefits and weakness". The results of this evaluation could be a map that can help the organization to enhance its knowledge advantages and reduce its knowledge weaknesses. This map discloses the knowledgebase resources and capabilities of one business and the knowledge that this corporation needs to become competitive in the market by providing the merchandise and services. As we mentioned earlier, we can considered this as a knowledge strategy.
Zack (1999, p. 131) mentions three steps that should be taken in order to describe the hyperlink between strategy and knowledge:
"1. Organization must identify its strategic goals.
2. Corporation must evaluate the knowledge that it needs in order to achieve its tactical goals.
3. Comparison between the knowledge that one company has and the data that one organization needs uncovers the strategic knowledge gaps of this organization. "
A firm, according using its current knowledge, must identify the best product and market opportunities for exploiting that knowledge. For example, Most of all, it acknowledged the difference and been able and developed its strategic knowledge accordingly (Zack, 1999, p. 131).
Therefore, we can consider the data as an important tactical resource for sustaining the competitive advantage. You can find 3 reasons why knowledge makes the advantage sustainable, as first that knowledge which is gained from organizational methods through experience is unique and cannot easily be reproduced. Because acquiring this knowledge require rivals to engage in similar experiences which need time and money. Second is the fact that, those firms which learn can learn more compared to their competitors who've just started to collect knowledge. Third reason is the fact that, the integration between newly gained knowledge and the knowledge that the firm already has can create unique insights and more valuable knowledge that is difficult for the competitors to get. These reasons all lead to a sustainable competitive advantage.
Strategic management is a collection of decisions and activities that are taken by the business management to determine the long-term activities of the company. Basically proper management has three elements (Houben et al. , 1999, p. 126), "the formulation of a strategy; the execution of a technique; the control and analysis of the strategy. Internal and external environment analysis must be achieved before making use of these levels. While analyzing of the internal and exterior environment will cause an overview of most opportunities and hazards and also weaknesses and talents will be researched and these are SWOT analysis results. If you want to define the inner and external conditions, the exterior environment include the variables existing beyond your company, they are really in the short-term and not under the control of the business and they are from the context in which company is accessible and functions. The external factors are divided as; immediate and indirect environment. The elements or groupings are directly inspired by the activities of the company are believed as the direct environment (industry environment), such as; the shareholders, the government, the suppliers, the neighborhood authorities, the competition, the customers, the lenders and the employee's organizations. The overall forces that have a direct effect on the long term decisions of the business are believed as indirect environment (macroenvironment) such as; economic, socio-cultural, technological, political and juridical influences (Houben et al. , 1999, p. 126; Schermerhorn, 2006, pp. 87-88).
The parameters of the inner environment within the company belong to the business enterprise management of the business that will not have an effect in the short-term. These factors include the company structure, the company culture and the sources of the company. One of the three components of strategic management was the formulation of a technique which is a process for the development of long-term ideas, to respond to environmental opportunities and hazards effectively by taking into consideration the talents and weaknesses of the company (Houben et al. , 1999, p. 126). Physique. 3. 1. 1 illustrates the SWOT research of talents, weaknesses, opportunities and hazards.
Companies need to take some specific actions to recognize and understand their competitive strengths and weaknesses; and the introduction of the competitive strategy depends on building a global overview that considers the advantages and weaknesses. The advantages and weaknesses can place in the practical company domains, or can be considered a consequence of unconventional connections between different domains. Furthermore, the strengths and the weaknesses must be analyzed at the different levels of the business such as; group, group, individual, company, product or market level (Houben et al. , 1999).
The current strategic position forms a very important point of departure for the introduction of a future strategy. It is very difficult to understand the existing strategy when a formal planning system was previously absent. The mastering of your competition, the current strategic prospects, performances from the past, the market prospects and the marketplace environment provide us with perception concerning information necessary for the sign of talents and weaknesses. Where possible these strengths and weaknesses are to be represented in objective conditions. It must be commented that most talents concern the capacities of certain workers people or the resources at hand. A distinction can accordingly be made according to the present product/market combinations. It is therefore sensible to make a distinction in line with the amount to which these strengths and weaknesses are of a critical nature. In regards to the critical factors, an attempt must be made to sort out them on the basis of talents (Johnson et al. , 1989; Bartol et al. , 1991).
Good performances within the company are the results of accurate interaction of the business enterprise management with its internal and/or exterior environment. To operate successfully in this value, the company must focus its future targets on its talents, while averting tendencies related to the companies weaknesses. Responding to internal talents and weaknesses is therefore an important element of the strategic management process. But success can only just be performed in this respect to the magnitude that one is familiar with the opportunities and hazards caused by the external environment. Mintzberg and Quinn (1991) explained the acceptance of the internal advantages and weaknesses, as well as external opportunities and threats, takes place on the basis of a SWOT-analysis. In the framework of the review, however, we chose to concentrate exclusively on the inner business environment. This therefore only concerns the recognition of talents and weaknesses. Companies must take on specific actions in order to tell apart their competitive talents and weaknesses. The strengths and weaknesses are located in the functional company fields, or they may be a rsulting consequence abnormal conversation between different areas. Furthermore, the strengths and the weaknesses of an aspect are measured at different degrees of the organization; this is at group level, at individual business level or at product or market level.
4. SWOT Examination in Practice
In this section we can overview the SWOT research of organizational performance of small and medium corporations in Egypt through promoting the human factors in quality management systems. This research has been done by the survey results (the answers in the analyzed questionnaire) were examined by the SWOT method in order to recognize the Egyptian making SMEs' Talents, Weaknesses, Opportunities, and Threats, in order to create information about their results on organizational performance and determine when there is a need to aid systems for the organization's development or a need for system improvement (Shobery et al. 2010).
This analysis the research team used as a guide for growing the QMS model with focus on human being factors. Egyptian manufacturing SMEs (Small-Medium Businesses) have much power and weaknesses, and many opportunities and risks which are generated from the business enterprise environment and also have effects overall organization. Talents of SMEs were verified by the results of the questionnaire and also have recognized, developed and marketed as part of the essential infrastructure needed to achieve the requirements of the business enterprise excellence practices. Weaknesses indicated the issues and ineffective work systems which need to be solved and improved upon gradually to get a new and better infrastructure (Shobery et al. 2010).
In their research they figured it out that opportunities mainly increase the range of international markets open to Egyptian developing SMEs. Risks are mainly produced through competitive situations from the international trading competition and free trade areas (FTAs). There can be an increase in the amount of overseas competitors the majority of which have a higher potential for international trade than Egyptian firms. Generally, strengths and opportunities influence the organization's performance in positive ways and also support the introduction of a QMS. On the other hand, the weaknesses and risks have unwanted effects on the organizational performance, which hamper an effective implementation of an QMS. Effects of advantages, weaknesses, opportunities, and dangers on the organizational performance in Egyptian developing SMEs are shown in Stand 1 and Amount 2.
Based on their findings, a systematic timetable for the evaluation of talents and weaknesses is something constantly gathering popularity. Companies must undertake specific actions in order to distinguish their competitive strengths and weaknesses. History shows this to be not specifically simple. Many companies have only vague ideas of the source of certain competencies and the level to that they have got them. The lack of a worldwide company overview helps prevent a definite picture being obtained. Despite these problems the development of a competitive strategy depends on having a global overview as regards talents and weaknesses.
By doing the SWOT analysis usually there are some ready expected advantages such as, an impetus to analyze a situation and develop appropriate strategies and techniques, a basis for examining core capabilities and competences, the data for, and ethnic key to, change, a stimulus to involvement in an organization experience.
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