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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 be threatened.
Know the weather, know the terrain, and your victory will be complete.
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.
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