All there is to know about SWOT Analysis and how it affects small and medium-scale enterprises (SMEs) in Nigeria
Acronym of SWOT Analysis
The “S” in SWOT Analysis stands for Strengths: these are those exclusive or unique properties of your business that gives it an edge over other businesses in the market at large.
The “W” in SWOT Analysis stands for Weaknesses: these can be seen or described as those properties that put your business in a detrimental position in comparison to others.
The “O” in SWOT Analysis stands for Opportunities: well these are simply favorable situations or conditions to make more profits.
The “T” in SWOT Analysis stands for Threats: these are external elements in the environment that could cause harm or trouble for the business.
FINDINGS OF THE STUDY (SWOT ANALYSIS)
STRENGTHS
- In most cases, funded by a proprietor or a group of people with a familiar mindset, developing mutual trust and executing business activities with total and complete focus on the growth of the business
- Usually have simple organizational structures — allowing management to keep abreast of different departments’ operations.
- Adequate and controlled management of all operational matters.
Must Read: Causes And Consequences Of Excessive Desire For Material Wealth Among Nigerians
WEAKNESSES
- As a result of the limited availability of resources, operators most times focused on minimizing costs and maximizing profits. As a result, proper management is often overlooked and effective risk management is neglected.
- The operational requirement of the vital three factors; speed, efficiency, and convenience might be a weakness Operations usually seek to achieve speed, convenience, and high efficiency.
- Working styles differ from person to person and often change over time and there may be a lack of clear guidelines, standard operating procedures, and control systems, thereby increasing the risk of corruption and bribery.
- Lack of good management and communication skills
THREATS
The top ten issues or threat areas of SMEs in Nigeria in decreasing order of intensity include:
- Management,
- Access to finance,
- Infrastructure,
- Government policy inconsistencies and bureaucracy,
- Environmental factors,
- Multiple taxes and levies,
- Access to modern technology,
- Unfair competition,
- Marketing issues,
- Non-availability of raw materials locally.
As we can see, managerial problems represent the greatest problem facing SMEs in Nigeria while non-availability of raw materials locally is the least problem.
REMEDIES (SWOT ANALYSIS)
The potential and opportunities for SMEs in Nigeria to rebound and play a crucial role in the engine of growth, development, industrialization, wealth creation, poverty reduction, and employment creation in Nigeria are enormous.
While SMEs themselves need to change their attitude and habits relating to entrepreneurship development, the governments (Local, State, and Federal) need to involve the SMEs in policy formulation and execution for maximum effect.
There is also a dire need to introduce entrepreneurial studies in our Universities in addition to emphasizing science, practical and technological studies at all levels of our educational system.
Promoters of SMEs should thus ensure the availability or possession of managerial capacity and acumen before pursuing financial resources for the development of the respective enterprise.
Must Read: Causes And Consequences Of Excessive Desire For Material Wealth Among Nigerians
CONCLUSION OF SWOT ANALYSIS
SWOT analysis helps in assessment of the internal and external factors which is very important for all the organizations both Small Scale businesses and large businesses as well.
But as SMEs are facing many problems due to globalization and are suffering from undue losses as compared to large businesses so SWOT analysis is important to make them understand their weaknesses in a better way and to make them use their “S” (strengths) to succeed in the market.
Hopefully, this study on SWOT Analysis has enlightened SMEs owners about their Strengths, weaknesses, opportunities and threats so that they can use it with greater benefits and can know their environment in better way.
