Advances in Social Science, Education and Humanities Research (ASSEHR), volume 199

2018 International Conference on Sports, Arts, Education and Management Engineering (SAEME 2018)

Enterprise Strategy Analysis Based on SWOT Analysis

Jiaxing Weng a and Tingze Liu b
School of Management, China University of Mining and Technology (Beijing), Beijing 100083,
China.
[email protected], [email protected]

Keywords: SWOT Analysis, Strategic Management, Internal Environment.

Abstract. With the rapid development of the economy and the continuous deepening of social
reforms, enterprises have unprecedented opportunities for development. However, due to the
increasing frequency of international exchanges, the competitiveness of the current social market
economy is becoming increasingly fierce. If the enterprises want to have an advantage in the market
competition, they must constantly increase their core competitiveness, establish a market strategy and
achieve their own in-depth reforms in marketing. SWOT analysis can help companies, organizations
or certain system to see their strengths, weaknesses, opportunities and threats, and provide reference
for their own effective adjustment of resources and positioning, so as to scientifically and reasonably
derive the development strategies that are suitable for itself in the current environment. This paper
uses the SWOT model to analyze the advantages and disadvantages of the research objective as well
as external opportunities and threats. Through the analysis results, we derive the development strategy
that is suitable for the research objective, and then integrate advantages and avoid disadvantages to
achieve mutual understanding and self-development.

1. Introduction
The development and expansion of a company and the enduring success of the company are the
result of the company's ability to keep pace with the times in its development. In the history of the
world, it is very rare to maintain a competitive advantage and become a long-lived company. Statistics
indicate that the average life expectancy of multinational corporations is 40 to 50 years, and that of
private enterprises in China is generally 5 to 10 years.[1] Facing with today’s increasingly dynamic
and competitive situation, it is significant for modern organizations to make long-term strategies.[2]If
an enterprise wants to maintain its competitive advantage in the flood of the market economy and
quickly adapt to environmental changes, it must adjust its own development strategy in a timely and
effective manner according to the environment. The correct corporate development strategy plays a
decisive role in the development of a company. The strategic management of enterprises is mainly to
put the interests in the future development stage. This is the most scientific development measure. In
the process of management, enterprises should attach importance to the development of the real
society, optimize the strategic management model, and pay attention to the combination of internal
and external environment in order to seek survival and development.

2. Strategic Management
Enterprise strategy refers to the long-term and overall plan and scheme for the survival and
development of enterprises in the context of intense market competition environment, on the basis of
summing up historical experiences, investigating the status quo, and predicting the future. [3]
Professor Michael Porter of Harvard University is a typical representative of the traditional definition
of enterprise strategy. He argues that "Strategy is the combination of some of the endpoints that
companies struggle for and the way companies seek to achieve them." [4] Strategy can be defined as
establishing the fundamental long-term goals and taking necessary action sequences and resource
allocations to achieve the goals. Strategy is a general direction, a master plan for where the
organization is going and how it will develop. When developing the strategy of management science

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 Advances in Social Science, Education and Humanities Research (ASSEHR), volume 199

and seeking competitive advantage, enterprises often need to understand and grasp the competitive
characteristics of external market economy.
Professor Mintzberg, managing professor at McGill University in Canada, analyzed the definition
of corporate strategy from five perspectives: plan, ploy, pattern, position, perspective, which
constitutes the 5P definition of company strategy. Corporate strategy is the planning and design of
the company's future business direction and objectives. It is a universal, comprehensive and
authoritative management decision. Market research has found that enterprises have accurate
forecasts of industry development trends and appropriate allocation of resources such as people,
finances, and materials at various strategic stages. The formulated strategy can guide the healthy and
rapid development of the company. Strategic management has played a significant role in improving
the company's overall performance. In industries where competition is fiercer, the number of
companies that use strategic management is also increasing. The larger the company is, the more
importance it is on strategic management. When the company is experiencing rapid changes in the
external environment or facing a major turnaround, companies are likely to restructure their strategies.

3. SWOT Analysis
SWOT is a classical method adopted by the Harvard Business School in the United States. It is a
kind of comprehensive evaluation of internal factors and external factors of the enterprise to evaluate
the system and select the best business strategy. SWOT is composed of the first letter abbreviation of
Strength, Weakness, Opportunity, Threat. It is a commonly used analysis method for enterprises to
formulate development strategies, goals and directions. This theory can effectively analyze its
advantages and disadvantages and define its own opportunities and challenges. Using SWOT analysis
can help to centralize advantageous resources and capabilities and make them more competitive.
"S" refers to Strength, which refers to an enterprise's own advantages, its own foundation, and its
advantages and strengths compared with other industries in the same industry. Only by understanding
the capabilities and advantages of the company itself, can we use its own advantages to develop and
receive good results. For example, the time-honored name of a century-old company is an advantage
compared to emerging companies. Or the geographical location of the company is convenient for
transportation and it is also its own advantage. As enterprises expand their development and formulate
further development goals and strategies, the "S" is also the first self-examination that must be carried
out.
"W" is Weakness. A company's own development must not only understand its own advantages,
but also define its own deficiencies. To make up for their own shortcomings and avoid weaknesses is
the premise to use their own advantages. For example, the company's weak production capacity, the
company's funds are not strong enough, the company's market is not wide enough, etc. are their own
deficiencies. When formulating strategies and goals, enterprises should consider the idea of seeking
truth from facts, think about ways to improve themselves, and develop steadily.
"O" is the abbreviation for Opportunity. The development of enterprises requires opportunities. It
is necessary to look for opportunities, grasp the pulse of the market, changes in people's lifestyles,
changes in social needs, and so on. Only by grasping market changes and conforming to the trend of
the times can we make breakthroughs and achieve better development.
"T" is the abbreviation for Threat, referring to the challenges and external unfavorable factors.
Enterprises must grasp the opportunities in order to better develop and avoid risks.
The SWOT analysis method uses the "S" and "W" to examine the interior of the company itself.
"O" and "T" belong to the company's external environment and are an analysis of the company's
external environment. If an enterprise wants to achieve rapid and stable long-term development, it
must be integrated internally and externally. Companies need to understand all internal and external
factors. Only in this way can the corporate strategy not fail and the development of the company can
be stable.

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 Advances in Social Science, Education and Humanities Research (ASSEHR), volume 199

4. Strategic Analysis of Laundry Retail Stores

The dry-cleaning industry in China is an imported product. As of December 31, 2016, the number
of physical stores in the national dry-cleaning industry is about 1 million. The total volume of the two
cities in Shanghai and Beijing is far higher than that of other cities and even some provinces. The
situation is obviously non-uniform, but it is undeniable that the dry-cleaning market in Beijing and
Shanghai has become saturated. With the increasing demand from the public for the laundry, a large
number of private dry-cleaners are transferring. Although the dry-cleaning industry is hot and a large
number of investors are eager to get a share, the business level of the dry-cleaning industry is actually
mixed. With the huge number of dry-cleaners, the actual dry-cleaning physical stores that can provide
professional technology account for only 20% of the total. The low threshold for investment dry
cleaners has attracted many investors who do not have experience in technology to join in, but the
level of service they provide cannot meet the growing demand for care of customers, and it eventually
becomes the result of the transfer.
For the special group of teachers and students in colleges and universities, in addition to the basic
laundry needs, there are some new requirements unique to this group. For example, due to academic
time schedules, students will have some problems with time coordination. Or some expensive special
fabrics can't be washed by themselves. This group presents new opportunities for college laundry
because of its special environment, and it also creates new challenges.
Through SWOT analysis to analyze the internal environment of university laundry, the following
table is obtained:
Table 1. SWOT Analysis of the Laundry in Colleges and Universities
Weakness:
Strength:
Internal managers are inexperienced.
Comprehensive online and offline marketing by using
Network marketing also needs to perfect
the Internet.
the space.
Collaborate with college students' entrepreneurial
The scope and scale of business are
projects to promote closeness.
limited.
Threat:
Opportunity:
Competition from existing laundries is
The market demand is big in the campus intensive area.
intense.
The state and schools offer preferential policies for
The depreciation cost of rent and fixed
college students.
assets is high.
According to the above analysis of all aspects of the laundry, in the selection strategy, the relevant
diversification strategy and non-related diversification strategy can be selected.
With the development of enterprises and the accumulation of capital, relevant businesses, such as
suit rental, are gradually carried out, and the business scope of enterprises is exaggerated to diversify
business risks, which is a related diversification strategy.
When the laundry industry market is saturated, it can gradually develop into other industries,
diversify business risks and improve corporate profitability. This is a non-related diversification
strategy.

5. Summary
As the Internet changes economic environment and changes human civilization, the competition
rules of enterprises have been changing. The theory of corporate strategic management needs to be
constantly improved and enriched in the new era. [5] Any enterprise is a very complex integrated
entity. The environment and its own conditions that it faces are constantly changing. Therefore, it
must be advancing with the times and seeking truth from facts when formulating corporate strategies.
The SWOT analysis method is effective for the analysis of enterprises and the formulation of goals,
and specific applications need to be flexible and changeable. Of course, the SWOT analysis method
alone is only the first step toward advancing with the times. It is also difficult to make the company's
development lasting. It also requires companies to position their strategic goals for development,
analyze and construct their own strategic space.
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