SWOT analysis in the small business sector of South Africa: Friend or foe?

Abstract

SMEs in South Africa are faced with a number of challenges, particularly poor levels of implementation in terms of accurately monitoring and predicting dynamic change in the macro environment. Following a strategic approach in scanning the external environment for opportunities and threats and identifying an organisation’s strengths and weaknesses using a SWOT analysis has become scarce in most SMEs. This research study aimed to establish if SMEs in South Africa use a SWOT analysis as part of their strategic management plan as well as to investigate if SMEs in South Africa take the time to identify and evaluate their internal and external environments. A questionnaire was administered and judgement sampling was used to gather the responses of 104 SMEs. The research identified that respondents were aware of the factors in specific functional areas that could be helpful to achieve business goals. The research also showed that financial management and marketing management were regarded as the most important drivers for achieving organisational objectives. The challenge now is to improve the use of the SWOT analysis of SMEs as they are the lifeline of the South African economy.