THE UNIVERSITY OF DANANG

UNIVERSITY OF ECONOMICS
FACULTY OF INTERNATIONAL BUSINESS
--------

INFORMATION AND DIGITAL LITERACY FOR

UNIVERSITY SUCCESS
TOPIC: SWOT analysis for Small and Medium Enterprises

Full name: Phan Hoài Khánh Tiên

Class: 48K01.1-E
Student ID: 221121699120
Lecturer: Hà Phước Vũ

Da Nang, 10th February, 2023

Table of Contents
Abstract.........................................................................................................................3
1. Introduction.............................................................................................................3
2. Method....................................................................................................................3
3. Findings................................................................................................................... 4
3.1 History.................................................................................................................. 4
3.2 Definition.............................................................................................................. 4
3.3 The way to conduct a SWOT analysis effectively................................................5
3.4 The advantages and disadvantages of a SWOT analysis for SMEs.......................6
3.4.1 Advantages........................................................................................................................6
3.4.2 Disadvantages.................................................................................................6
3.5 The importance of SWOT analysis for SMEs.......................................................7
4 Conclusion............................................................................................................... 7
References..................................................................................................................... 8

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 Abstract
Many small and medium enterprises have had to "stop the game" due to the widespread
Covid-19 outbreak, but many other firms now have the chance to grow and prosper as a
result. Businesses that are able to survive this pandemic have one thing in common:
they understand how to apply SWOT analysis, a tried-and-true marketing technique, to
quickly strengthen their points of weakness and market the areas of their strengths. This
report aims to investigate the SWOT analysis for helping SMEs develop their business
strategy. To answer the questions, I collect data from previous studies and reports. My
report shows all the information to answer the question relating to my topic “SWOT
analysis for SMEs”. I bring knowledge about SWOT from its history to its importance,
and how effective and helpful it is. To be specific, I not only introduce the history and
definition of SWOT but also the way to conduct an effective analysis for SMEs to
develop their enterprises. Last but not least, I indicate the advantages and disadvantages
when using this model so that small and medium firms can manipulate it thoroughly.
Thus, its application aims to intensify marketing campaigns, keep up a high standard for
goods and services, preserve and boost consumer confidence, and interact with
consumers. SWOT analysis is important for the improvement of SMEs.

1. Introduction

Small and medium-sized businesses (SMEs) are companies that maintain revenue and
profit, resources, or a particular number of employees below a certain level. SMEs are
productive and dynamic contributors to the national economy and play an essential role
in stimulating economic progress.

SWOT analysis is a helpful planning and analysis method for small businesses that
enables owners to concentrate on their strengths, lessen their limitations, and take full
advantage of new opportunities. A SWOT analysis includes both internal and external
factors. Internal factors are Strengths and Weaknesses, whereas Opportunities and
Threats are external factors.

This report is intended to indicate the importance of SWOT analysis for SMEs to
recognize the dangers and vulnerabilities present and form reasonable expectations.
Additionally, depending on their strengths and external opportunities, it assists them in
learning about fresh opportunities that they are well-positioned to take advantage of. By
applying SWOT analysis, it helps SMEs be able to adapt to changes happening in the
challenging business environment (Rangkuti, 2014; Rangkuti, 2015). Businesses can
build their future planning strategies around these four fundamental elements. To do
this, they can fend off dangers from without by utilizing their powers.

This report is structured as follows. The method is discussed in section 2. Section 3

introduces all the findings including the definition of SWOT, its factors, the way to
conduct it, its advantages and disadvantages, and the importance of SWOT for SMEs.
The report comes to an end in Section 4.

2. Method
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I mostly use methods of data analysis along with information gathering and synthesis
from previous studies and reports. An in-depth survey gives a comprehensive and multi-
dimensional view of SWOT analysis.

3. Findings
3.1 History

SWOT is a system of strategic analysis used to evaluate a company's strengths and

weaknesses, opportunities for growth, and threats to the company. The use of SWOT
analysis can be advantageous at both the business and personal levels. SWOT analysis
was developed by Albert Humphrey in the 1960s and 1970s. This is the result of
research carried out by Stanford University in the United States. This analytical
framework was originally called SOFT, which stands for Satisfactory, Opportunity,
Fault or bad thing in the current, and Threat or risk in the Future. However, Albert and
his colleagues changed F to W (Weakness) once this analysis was submitted to Urick
and Orr in Zurich, Switzerland, in 1964. From then, SWOT was created. SWOT had
been completed and used at numerous businesses by early 2004 because it frees
managers from relying on consulting or other expensive resources to create and
synchronize company goals.
3.2 Definition

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. A SWOT

evaluation consists of each internal and external factor. Accordingly, internal
(manageable) factors known as Strengths and Weaknesses help or hinder organizations
in fulfilling their missions. Opportunities and Threats, on the other hand, are the
external (unmanageable) elements that either assist or prevent enterprises from
achieving their objectives (Dyson, 2004). By identifying the elements in these four
categories, the company can determine its core competences for making decisions,
planning, and building strategies. (Phadermrod et al., 2019).

According to Salesforce EMEA, How to Perform a SWOT Analysis for Your Small
Business was written on August 23, 2021, in more depth, below is a more thorough
explanation of each of the four components of a SWOT analysis:

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Strengths: The core strategic advantages of a company can be identified by looking at
its strengths. Unique products or superior customer service and aftercare are examples
of strengths. These firm advantages maintain client loyalty.

Weaknesses: These are the elements of a business that aren't running as efficiently as
they could. Internal factors can prevent them from contending effectively. They might
be employing outdated methods that do not converse with each another or they might
need design experience. A business’s sins are a sign of what it needs to do better to
operate at peak effectiveness. For illustration, a company might be failing to induce
reprise purchases due to poor after- deals communication and a sub-optimal client trip.
Ameliorate this by adding staff training, or by automating certain processes.
Opportunities: Opportunities can appear at any time and occasionally appear out of the
blue. Small firms may make sure they're prepared to seize opportunities whenever they
present themselves. Businesses that have conducted a SWOT analysis and recognized
their strengths and weaknesses can better understand how to take opportunities and
where it is necessary to make adjustments.
Threats: Threats can occur at any time since the world is so erratic. Resulting from
shifting laws, increasing material costs, and changes in customer preferences. Threats
are considered external elements since they are things that enterprises cannot control.
But companies can attempt to future-proof themselves in important areas. Process
automation can facilitate climate change adaptation. Utilizing digital technology to
create back-up plans can enable business activities to continue without interruption
during a crisis.
The majority of SME owners and managers might not, however, have a solid
understanding of the theory needed to effectively use SWOT analysis (Thamrin, et al.,
2017). SMEs need to analyze their enterprise posture and gain a general suggestion on
their business strategy.
3.3 The way to conduct a SWOT analysis effectively

A SWOT analysis is a highly flexible device that can be acclimatized to meet the
needs of SMEs that uses it. Here are some crucial points to take into account while
conducting an effective SWOT analysis (How to Perform a SWOT Analysis for Your
Small Business):
Put together a broad team: It is essential to gather a variety of perspectives from
throughout the firm for a SWOT analysis to be effective. A biased perspective will
only be provided by speaking with the customer service or business analytics teams.

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 Ensure that each significant department is represented, from those in charge of on-the-
ground daily operations to those responsible for long-term planning.
Listen to ideas: Your team will be special, with a special blend of viewpoints and
abilities. Encouragement of everyone to share their initial views, perspectives, and
ideas is a fantastic first step. Perform this in person, with a group, anonymously online,
or a combination of all three. The most crucial thing is to give people a safe space to
express their opinions in an environment free of prejudice.
Plans: It's now time to make some decisions once everyone has had a chance to voice
their opinions. Those in charge of the SWOT analysis should decide on a
methodology, a schedule, and major areas of concentration.
Present the findings: An excellent way to visualize the results of a SWOT analysis is
using a basic grid that includes a quadrant for each of the four categories of strengths,
weaknesses, opportunities, and threats. The insights can be simply distributed around
the enterprise in this format.
3.4 The advantages and disadvantages of a SWOT analysis for SMEs
For SMEs, the SWOT analysis model helps managers comprehend the company's
current resource position, key success factors, and areas where it needs to grow. In
addition, the model supports analyzing potential external threats to the business as well
as opportunities that might be present now or in the future. With such a broad
perspective, managers may create a strategic plan that will be successful and reduce
risk in the future.
3.4.1 Advantages
 Do not have to pay for: You don't need to spend any money; you simply need to use
your brain. This is a great benefit of the SWOT model since you may still learn and
obtain data for analysis without spending money on consulting professionals, such as
through acquaintances, the Internet, and corporate reports. It is reasonable for
everyone working in the business to do this analysis, thus specialists or consultants are
not needed. It works well for examining initiatives and offers within a SME for any
application or sector.
 Important results: The outcomes of the SWOT analysis are important, and they can
help SMEs gain a general awareness of the advantages, disadvantages, chances, and
risks that they, their company, or their organization may face. That outcome serves as
the foundation for future successful programs. A corporation should aim to strengthen
its areas of strength and reduce those of weakness in order to take advantage of
opportunities and defeat dangers that have been recognized.
 Breakthrough in new ideas: Swot analysis also helps with the creation of fresh
SMEs’ strategies. You can more readily come up with original and new ideas when
you take a quick look at all the components. Not only does it raise consciousness of
the possible benefits (or drawbacks) and hazards, but it can also assist us in responding
more successfully in the future by making plans to be ready when risks occur.
3.4.2 Disadvantages:
 The results of the analysis are not in-depth: The SWOT analysis's contributing
factors are frequently extremely straightforward and do not offer justifications. It is not
sufficient for the company to evaluate and orient the goals if it only concentrates on
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 project preparation based on SWOT analysis. As a result, the analysis is frequently in-
depth and does not adequately highlight the elements that occasionally render the
method proposal inefficient.
 Subjective analysis: The SWOT model has the relatively significant drawback of
frequently favoring the modeler's subjective view while ignoring many other important
practical considerations. Because the modeler is not sure if the components he
provides are accurate representations of reality or not, the modeler will occasionally be
confused and uncertain about them.
 Do not give specific actions: The SWOT analysis has not been deeply exploited, and
it only provides an overview of the situation of people and organizations. Therefore,
rather than being multi-tool, the strategies and activities suggested are general.
 Do additional research: One thing is certain: if you want to create a comprehensive
plan, you should conduct further research in addition to using the SWOT system. An
illustration would be the use of qualitative and quantitative surveys to examine
customer behavior and demands. You may plan wisely and with knowledge thanks to
these recent surveys. More than a simple list of opportunities, risks, chances, and
vulnerabilities is required for an effective SWOT analysis. A complete Swot analysis
should consider the scale of the opportunity or risk about the company's strengths and
weaknesses.
3.5 The importance of SWOT analysis for SMEs
SWOT analysis is a simple tool that can benefit SMEs in a variety of ways. SWOT
helps small businesses avoid dangers, reduce weaknesses, and make better decisions.
Small business owners are compelled to take into account all internal and external
aspects that affect reaching goals while using SWOT analysis. Additionally, it
identifies obstacles that will prevent the achievement of goals and objectives as well as
issues, and it investigates fresh approaches to address or avoid them. Moreover,
SWOT aids in determining how to maintain your competitive advantage and expand
your small firm. It assists in identifying opportunities and taking advantage of growth-
promoting opportunities. SMEs will gain competitive advantages by matching their
capabilities to opportunities. Last but not least, SWOT analysis assists small business
owners in staying knowledgeable about how modifying market conditions and rivals
effect the small organization's sales or processes as well as enhancing productivity
improvements to reduce costs and increase competitiveness.
4 Conclusion
It is emphasized how important SWOT analysis is in many small and medium business
settings. SMEs today require a specific tool, such as a SWOT analysis. SWOT analysis
is used to evaluate a company's strengths, weaknesses, and competitive advantages.
SWOT analyses contrast internal strengths and weaknesses with external opportunities
and threats. The SWOT method's implementation might offer several suggestions for
making decisions. To effectively orient and create plans for the future, SMEs apply the
SWOT model to both their businesses and their situations. The definition and the way to
conduct it are simple and specific. The SWOT analysis contains drawbacks in addition
to its benefits, if we study it thoroughly and deeply, we will master it. Since then, SMEs

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improve their business strategy as well as the way to manage their firms more
effectively and logically.

References
1. Thamrin, H., Herlambang, R., Brylian, B., Gumawang, A. K., & Makmum, A.
(2017). A SWOT analysis tool for Indonesian small and medium enterprise. ARPN
Journal of Engineering and Applied Sciences, 12(2), 620-625.
2. SWOT Analysis – A Useful Small Business Analysis and Planning Tool
https://small-business-success-wnc.com/swot-analysis-a-useful-small-business-
analysis-and-planning-tool#:~:text=SWOT%20analysis%20helps%20small
%20business,their%20strengths%20and%20external%20opportunities.
3. Swot analysis
https://research-methodology.net/theory/strategy/swot-analysis/
4. SWOT là gì? Phân tích và xây dựng mô hình SWOT hiệu quả
https://vieclam.thegioididong.com/tin-tuc/swot-la-gi-phan-tich-va-xay-dung-mo-
hinh-swot-hieu-qua-340#:~:text=M%C3%B4%20h%C3%ACnh%20n%C3%A0y
%20bao%20g%E1%BB%93m,doanh%20nghi%E1%BB%87p%20tr%C3%AAn
%20th%E1%BB%8B%20tr%C6%B0%E1%BB%9Dng.
5. Dyson, R. G. (2004). Strategic development and SWOT analysis at the University of
Warwick. European journal of operational research, 152 , 631–640.
6. Phadermrod, B., Crowder, R. M., & Wills, G. B. (2019). Importance-Performance
Analysis based SWOT analysis. International Journal of Information Management,
44, 194–203. https://doi.org/10.1016/j.ijinfomgt.2016.03.009
7. How to Perform a SWOT Analysis for Your Small Business. (n.d.). Salesforce
EMEA Blog. https://www.salesforce.com/eu/blog/2021/07/swot-analysis-small-
business.html
8. SWOT là gì?
https://lafactoriaweb.com/swot-la-gi