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2.3 Introduction to SWOT analysis
SWOT analysis was put forward in the 1980s by Heinz Weihrich (p.117), a famous American scholar. The letters of SWOT respectively stand for strengths, weaknesses, opportunities and threats. SWOT analysis is a scientific analysis, used to evaluate the strengths, weaknesses, opportunities and threats involved in a company, and combines internal resources with external resources of a company. It has been widely used in many fields in a company, such as management, human resources, and product development.
Heinz Weihrich (p.117) put forward three basic steps of SWOT analysis. First, analyze the internal strengths and weaknesses of a company. Second, analyze the external opportunities and threats that may come from the outside environment changes. Third, match the external opportunities and threats with internal strengths and weaknesses to achieve feasible strategies.
2.4 The Matrix of SWOT Analysis
The matrix of SWOT matches the four factors and makes out four feasible strategies --SO strategy, WO strategy, ST strategy and WT strategy. The basic idea is to use strengths to exploit opportunities, to avoid their weaknesses and to defend against any known threats. The matrix (p. 118) is in the following: