|in modern strategic management and planning, swot analysis
is a widely known diagnostic tool. swot analysis refers to
understanding the strength and weakness of the competitors
relative to oneself, and realising the opportunities and
threats that the environment may impact on one's business.
interestingly, swot analysis was already advocated by sun
tzu more than 2,000 years ago when he said :
"know your enemy, know yourself, and your victory will not
know the weather, know the terrain, and your victory will
in fact, "know your enemy, know yourself" is probably the
most well-known phrase in sun tzu's art of war. it is also
the most cited phrase. even mao tse-tung was known to say,
" know your enemy, know yourself; hundred battles, hundred
won". similarly, many japanese samurai warriors in the past
had quoted aspects of this particular famous phrase by sun
tzu. in my lectures to executives around the world, i have
often used this phrase to argue that what we now commonly
called swot analysis is not a modern "invention" from the
western world. rather, it originated in china more than
2,000 years ago. it is a pity that the chinese have not
been able to exploit the wisdom that underlies this saying
by sun tzu. let me explain.
"know your enemy, know yourself" is tantamount to knowing
one's strengths and weaknesses relative to those whom we are
fighting against (e.g. the competitors, in the case of
business). similarly, "know the weather, know the terrain"
is tantamount to knowing the opportunities and threats posed
by the environment. they are the external or uncontrollable
factors. interestingly, in business we also have such
external factors that affect the way we do things. for
example, we often talk about the business climate (the
weather) and the physical or infrastructural factors (the
terrain), and how they can impact on the conduct of
business. thus, while it is very apparent that while the
infrastructural factors are in asia's favour right now (two
new world class international airports have just been opened
in malaysia and hongkong), the business climate has been
dampened by the financial crisis that began in july 1997.
ironically, many of these external factors are beyond the
control of any single country.
besides understanding the direct application to swot
analysis, what is interesting to note is that sun tzu
apparently placed more emphasis on understanding the enemy
and oneself first. this is not only evident in the
quotation cited earlier, but is also supported by another of
sun tzu's saying:
"he who has a thorough knowledge of the enemy and himself
is bound to win in all battles.
he who knows himself but not the enemy has only an even
chance of winning.
he who kno
ws not the enemy and himself is bound to perish
in all battles."
the need to place greater emphasis on understanding the
enemy and oneself may not be very apparent to many readers.
however, on closer reflection and analysis, there is
profound logic in sun tzu's arguments. in war, and business
is no different, the probability of winning or losing
depends a lot on whom you are fighting against. you may be
very strong, but if your competitor is much stronger than
you, you become weaker by comparison. the chances of
winning are then greatly diminished. in other words,
absolute strengths alone do not determine the outcome of a
competition. rather, winning or losing is based more on
relative strengths. what is important to recognise is that
your strengths or your weaknesses do not change overnight.
in other words, they remain relatively constant or static.
in contrast, in any competitive situation, whether you are
weaker or stronger will be determined by your competitors
(or enemies in the case of war). if your competitors are
weaker today, you are stronger. however, you will become
weaker in the face of a stronger competitor! in essence,
competitive forces are dynamic and changing all the time.
by focusing on the competitive forces, you will be "forced"
to be more responsive, adaptive and flexible. in the
process, the management of change and learning how to
overcome changes will become an intrinsic part of your
behaviour and strategy development. this is what generals
in war and senior executives are trained to do!
unfortunately, in actual operations or competitive
situations, many generals and senior executives fall short
of their training!
there are other reasons to focus on the competitors first
rather than oneself. through detailed analysis of the
competitors, it is possible to win even if you are weak!
this can be done by avoiding the strengths of the
competitors. in fact, this was exactly what the japanese
manufacturers did in the 1950s and 1960s.
(part one of two)