STRATEGIC THEORIES UNDER INTERNAL ANALYSIS
There are basically 3 sphere of analysis in Business Strategy, viz Internal analysis, external analysis and competitive force analysis. For detail reading on internal, external and competitive force analysis.
As promised in the last publication I will be concentrating on Strategic theories under internal analysis and how far has MSMEs in Nigeria implemented this theories for their growth or otherwise in this publication.
Some notable terms:
Critical Success Factor
The specific theories under internal analysis to review for this publication are:
- SWOT Analysis
- Porter’s Generic Value Chain
But will only review the SWOT Analysis in this publication.
Read up the explanations of the theories in the book.
But before that you can get a FREE INTRO COPY on https://www.rops.com.ng/SRGE/Freebees
Now, lets do an appraisal of the SWOT Analysis and the MSMEs.
SWOT Analysis and MSMEs in Nigeria
The SWOT Analysis is the simplest and most popular strategic theory not only in Nigeria but also globally. It was actually created by Albert Humphrey of Standford University, California, United State of America in the 1960s.
It is made up of the four simple acronym of S – Strengths, W – Weaknesses, O – Opportunities and T- Threats. It is also known in reciprocal as TOWS. Whether as SWOT or TOWS, it is an old theory but still very relevant to MSMEs and any level of business enterprise because of its simplicity of implementation.
But the challenges really lies in the Proprietor of the MSMEs concerned. Some of the factors that shapes the personality of Proprietor of SMEs, the understanding and implementation of the SWOT Analysis:
- Literacy and level of academic/professional knowledge
- Place of Business activity
- Government regulations and policies
- Family/tribal and religious background
- Level of Capitalization at the point of commencement of business
- The specific business sector or line of business
- No or level of previous business experience at the point of business initiation.
- Gender peculiarities and age brackets
Considering the Nigerian business environment, we can group MSMEs into 5:
- MSMEs Proprietor who has no western education at all. They are predominantly farmers, herders, petty traders and artisans.
- MSMEs Proprietor who has the old Modern 3 or SL75, School Certificate and NABTEB.
- MSMEs Proprietor who has National Diploma (ND)/National Certificate of Education (NCE) or equivalents. These are semi graduates.
- MSMEs Proprietor who has Higher National Diploma (HND), Bachelor of Science and above without business experience.
- MSMEs Proprietor with any level of education but with cognate business experience.
The SWOT Analysis can be done at different times in the life of a business which may include the following:
- Towards the commencement of a new business
- When seeking loan or equity for a new business
- When seeking loan or equity to finance specific growth level of the business.
- When seeking partnership with another professional in the same business sector.
- When a business is seeking merger with another business
- When a business is being bided for acquisition by another business.
To appreciate the SWOT Analysis. Please get your COPY of the book. See https://www.amazon.com/dp/B07Z6PQBMF .
The SWOT or TOWS Review
Each of the acronym does and cannot have a specific definition and interpretation across the peculiarities of all types of proprietors of MSMEs. This has to do with the law of relativity and human differences. For example an illiterate or semi-literate trader or business person does not take the registration of his or her business as strength because we met an order where our fathers are and were traders and farmers, and some even became big time businessmen and women without business name registration, rather they see it as a weakness as it exposes the business to the government unduly for tax and other regulatory purposes which they are not ready to comply with. This is accentuated by their lack of trust in the government and its past years of irresponsibility.
Also because they are not aware of the principle of separation of entity that, ‘’the entrepreneur or owner of a business is not the same as the business’’ as such opening of bank account(s) for the business in their personal name(s) is improper.
For the literate or elite business owners, the registration of the business is seen as a good strength as the registration will assist opening of bank account which puts the business on a pedestral for any opportunity at home or abroad. There is also the instinct that there may be need for finance at any point in the life of the business and the bank can be there for the business. Though they are aware that it exposes the business to government taxations and regulations but very convinced that they will manage through to still be able to derive the greater benefits accruable with business registration.
The SWOT Analysis remains the most popular and used strategic theory because of its simplicity, flexibility and relativity. Almost, if not all MSMEs uses SWOT Analysis, with the difference in implementation affected by the peculiarity of the Proprietor or management.
The more literate or educated an MSME Proprietor is, the more formal and articulated he/she implements SWOT Analysis, otherwise it is implemented informally.
Contemporally, it is now always part of simple business plan or feasibility studies done for MSMEs in the quest for financing from f Why not order for your copy for more reading.
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Olaoye Rafiu A
CEO, ROPS GLOBAL