SNW analysis

Contents

• What is SNW analysis?
• Goals and objectives of SNW analysis
• How to conduct SNW analysis?
• Working with the SNW analysis table

What is SNW analysis?

SNW analysis is a methodological assessment of the internal environment factors of a company that determine its competitiveness. Such factors include organizational structure, marketing, production processes, and logistics. Each of these aspects affects how the enterprise is perceived in the market and how effectively it can compete with other players in its industry.

Within the framework of SNW analysis, factors are assessed according to three main categories:

• S — Strength — strengths;
• N — Neutral — neutral aspects;
• W — Weakness — weaknesses.

The main difference between SNW analysis and SWOT analysis is that in the SNW methodology, the average market condition is determined for each element or resource, i.e., a neutral value (N). This allows for a more accurate assessment of the specific enterprise's position compared to the average industry indicators.

Goals and objectives of SNW analysis

SNW analysis serves as a tool for a deep analysis of the internal environment of the organization, which, in turn, can lead to an increase in its competitiveness. This method provides an assessment of various company systems: management, production, and marketing, which forms the basis for strategic planning.

The main goal of SNW analysis is to identify both positive and negative resources, as well as to determine growth points for the enterprise. Positive resources include strengths and neutral aspects that should be preserved and developed, while negative resources are weaknesses that need to be identified and transformed into neutral or strong.

To achieve a competitive advantage, it is sufficient to bring key indicators to a neutral value (N). Strengths (S) can be represented by 1-2 parameters, which allows managers to manage them more effectively. Advantages and disadvantages can serve as criteria for positioning the firm or new product in the market, which is why SNW analysis is actively used in the development of business plans.

How to conduct SNW analysis?

Conducting SNW analysis is based on a qualitative assessment of the elements of the internal environment of the organization, rather than a quantitative one. For example, the salary level of employees is not specified in rubles but is determined according to the following categories: "above market" (S), "average" (N), "below market" (W).

To successfully conduct SNW analysis, follow this four-step algorithm:

1. Identify assessment factors. Select parameters that affect the revenue, competitiveness, and efficiency of your enterprise. Pay attention to factors that require significant resources and may cause errors in operations.
2. Calculate average market indicators. Compare your company with competitors in the industry and collect data to determine neutral values for each factor.
3. Assess the company for each factor. Determine the status of each factor at the time of analysis and assign each one of three values: weak (W), neutral (N), or strong (S).
4. Draw conclusions and create a list of recommendations. Summarize the analysis and formulate recommendations for improving the status of the factors.

Working with the SNW analysis table

Let’s consider one way to work with the SNW analysis table using a specific example. In the table, next to each assessment parameter, a mark "x" is placed, reflecting the status of the indicator compared to the average market value. The marks "←" or "→" indicate the direction in which the factor needs to be adjusted. A date is also specified by which the desired level is planned to be achieved.

An example of an SNW analysis table may look as follows:

This table contains the SNW analysis data of a hypothetical firm based on two main factors: marketing and production. Factors with low assessment, such as the marketing system and assortment, require improvement to reach a neutral level within the specified timeframes. Neutral factors, such as the sales system and sales volume, have potential for growth and increased efficiency.

Based on the analysis, the following list of recommendations can be drawn up:

• Create an effective marketing system and optimize advertising costs.
• Expand the assortment to increase market share.
• Improve the sales system, increase sales volume, and load production capacities to 100%.