Strategy analysis and optimization of SWOT matrix model in science and technology development

Strategy is divided into four constituent elements: market opportunities, company strengths, personal values and aspirations, and social responsibility.

Strategic behavior is the process of adapting to the environment and the resulting internal structure of the firm. Taking the management of long-term industry goals as the strategic focus of the enterprise, strategic management is a future-oriented, dynamic, and continuous process from decision-making to realization.

Strategic management is a dynamic management process. The formulation and implementation of strategies need to take into account the environment and the impact of competitive forces. This paper comprehensively analyzes the internal and external environments of SMEs based on strategic management, and derives external opportunities and adjustments, as well as internal strengths and weaknesses of the company’s development.

Core competitiveness, also known as “core (competitive) ability” and “core competitive advantage”, refers to the collection of abilities that an organization has to cope with changes and fierce external competition and win over competitors, and it is the most basic competitiveness that can make the whole enterprise maintain a long-term stable competitive advantage and obtain stable and excessive profits. It is the most basic competitiveness of an enterprise that can enable the whole enterprise to maintain long-term and stable competitive advantages and obtain stable and excessive profits, and it is the enterprise’s own organizational ability that organically integrates the skill assets and operation mechanism, and it is the result of the enterprise’s implementation of internal management strategy and external transaction strategy.

Core competencies should, first of all, help the company to enter different markets and will serve as the cornerstone of the company’s ability to expand its operations. Secondly, core competencies contribute significantly to the creation of market value for the company’s final products and services, and they contribute to the realization of the core, fundamental benefits that consumers are most concerned about, rather than just some ordinary, short-term benefits. It is the ability of a company to gain competitive advantage in the long run. It is the technology or capability that is unique to an enterprise, can stand the test of time, is malleable, and is difficult to be imitated by competitors. For modern enterprises, the core competitiveness of an enterprise is a combination of certain key resources or key capabilities of an enterprise with knowledge and innovation as the basic kernel, and it is a dynamic equilibrium system that enables the enterprise, the industry and the country to maintain a real or potential competitive advantage within a certain period of time.

S is strengths, W is weaknesses, O is opportunities, T is threats, SWOT analysis is to reach the enterprise goal, through the advantages, disadvantages, opportunities and threats to the four aspects of the comprehensive assessment and analysis to reach a reasonable conclusion for the development of business strategy services.

With the development of China’s commodity economy, more and more scholars use SWOT analysis to study enterprises. How to use the SWOT matrix model to analyze the changes in the external environment and the transformation of the enterprise, so as to discover new opportunities and difficulties, and estimate the strengths and weaknesses of the enterprise in order to seek new solutions, goals and strategies has become a hot topic.

The SWOT matrix model was initially used to understand the competitive strengths, weaknesses, opportunities, and threats of the enterprise, so as to combine the enterprise’s goals with its resources and environment organically using a scientific analysis method.

SWOT matrix model is a kind of analysis method [26], mainly used to determine the enterprise’s own competitive advantages and disadvantages and external opportunities and threats, so as to combine the enterprise’s strategic objectives with the enterprise’s internal resources as well as the external environment to comprehensively analyze and thus formulate strategic decisions conducive to the long-term development of the enterprise. SWOT matrix model is one of the most widely used strategic analysis tools by enterprises and researchers, the purpose of this method is to achieve the enterprise’s goals, through the strengths, weaknesses, opportunities and threats to the four aspects of a comprehensive assessment and analysis in order to reach a reasonable conclusion for the formulation of corporate strategy.

The SWOT matrix model combines the external environment of enterprise competition with internal conditions to build a structured and systematic analysis framework for itself. Before the SWOT matrix model was proposed, there were scholars who used the analysis of internal advantages and disadvantages, as well as external opportunities and threats, but they only analyzed them independently. The biggest contribution of the SWOT method is to analyze these factors with structured and overall systematic thinking, which makes the enterprise more comprehensive and reliable in formulating strategic opportunities.

The SWOT matrix model is widely used in enterprise strategy research and competition analysis due to its intuitive analysis and ease of use. However, SWOT matrix model also has its shortcomings, for example, SWOT matrix model adopts a qualitative method to form a fuzzy description by arranging and combining the strengths and weaknesses, opportunities and threats, which is subjective to a certain extent. Therefore, the facts listed should be as objective as possible and provide certain data to analyze the problem and formulate strategies more objectively.

The SWOT matrix model has a wide range of applications, but it is often used to develop business development strategies and analyze industry competitors. As we all know, SWOT the four English capitalized combination of strengths, weaknesses, opportunities and threats to the four English words composed of the first letter, in the SWOT analysis, each is an important part of the following I will mainly introduce the SWOT matrix model includes the main content:

At this stage, the most important competition between countries is the competition of science and technology. Science and technology innovation play a very important role in improving the country’s overall national power, and enterprise advantage is especially important in strategy analysis. [27]. A country’s scientific and technological innovation can not only rely on the national science and technology innovation center, but also on the scientific and technological innovation of small and medium-sized enterprises. SMEs’ science and technology innovation is capable of providing diverse innovations for national science and technology innovation and forming a science and technology innovation team from top to bottom. SMEs’ scientific and technological innovation is an important force of national scientific and technological innovation, and an important push to change the country’s current technological innovation capability. Therefore, SMEs’ science and technology innovations can not only enhance the core competitiveness of enterprises themselves, but also play a key factor in strengthening national power and improving competitiveness overall.

Small and medium-sized enterprises, because of the specificity of their own nature, small scale, more opportunities for direct contact with the market, a high degree of sensitivity and familiarity with the vagaries of the market, can understand the diversified market demand in the fastest time. Can focus more on market changes to make a rapid response, seize the favorable opportunity to develop new technologies or new products to adapt to market demand. To meet the market needs, solve the problem of not being able to meet the needs of the public in a period of time due to market supply vacancies, and promote the harmonious development of the economic market.

At present, there are still shortcomings in China’s SMEs’ science and technology innovation, which are not conducive to the development of SMEs’ science and technology innovation. The disadvantages of SMEs’ scientific and technological innovations mainly focus on several aspects, such as funding, talent, and limitations in managers’ thinking.

Insufficient funds for SMEs’ science and technology innovation. Enterprises establish a large number of funds to maintain the overall basic operation of their enterprise, including renting space, hiring employees, purchasing equipment, and purchasing raw materials. The nature of SMEs determines that they cannot have enough funds to ensure the successful completion of their science and technology innovation, unlike large enterprises. Lack of capital has always been a major obstacle to the development of SMEs, and is also a significant obstacle to technological innovation.

The rigidity of thinking of some SMEs. Part of the SMEs lack of enterprise strategy and tactical planning of space stereo thinking, do not pay attention to the national market to grasp the macro, the market information is not enough to grasp in place, can not make a rapid response to market demand, which did not seize the best time for scientific and technological innovation.

Small and medium-sized enterprises of science and technology innovation talent is relatively lack of. Small and medium-sized enterprises because of its small size, imperfect system, immature development and stability and other reasons, its welfare benefits and social security for employees is far less than large enterprises, excellent scientific and technological innovation talent is not willing to go to small and medium-sized enterprises to carry out technological or product research and development work. The lack of scientific and technological innovation talents is one of the most important factors hindering the scientific and technological innovation of small and medium-sized enterprises.

Innovation is the soul of a nation’s progress and the inexhaustible driving force of a country’s eternal vitality, and in 1995, the State defined the strategy of “developing the country through science and education”, which comprehensively implements the idea that science and technology are the first productive forces, as one of the important guidelines for the construction of China’s socialist modernization. The goal of China’s scientific and technological development in the next 15 years is to build an innovative country by 2020, so that scientific and technological development will become a powerful support for economic and social development. Scientific and technological innovation is a strategic support for improving social productivity and comprehensive national strength, and must be placed at the center of overall national development.

From the development history of recent decades, China’s innovation in science and technology has deepened the importance of research and development of new technologies. The state’s emphasis on scientific and technological innovation has created favorable conditions for SMEs’ scientific and technological innovation. SMEs must seize and make good use of the favorable opportunity to enhance their scientific and technological innovation capability, create new technologies or products that meet the needs of the country, society and individuals, and contribute to the realization of China’s strategy of developing the country through science and education and the construction of an innovative country.

At present, the development of SMEs has made greater progress than the initial start-up stage, but they still face challenges and risks. The following factors seriously hinder SMEs’ scientific and technological innovation.

The legal and regulatory system is not strong enough to protect intellectual property rights. The legal rights and interests of SMEs’ scientific and technological innovation-related achievements cannot be effectively protected. Meanwhile, the existing laws and regulations are not strong enough in terms of enforcement. Knowledge and innovation achievements are misappropriated by others to the SMEs’ own interests, the legitimate rights and interests are not effectively protected, which seriously frustrates the enthusiasm of SMEs’ scientific and technological innovation, and hinders the sustained and healthy development of SMEs’ scientific and technological innovation.

The problem of financing scientific and technological innovation in SMEs is difficult, given that scientific and technological innovation is a long-term task that requires a large amount of funds. The lack of funds for small and medium-sized enterprises has always been a major obstacle to the development and progress of the enterprise itself, especially in science and technology innovation, which requires more funds.

SMEs’ scientific and technological innovation faces greater market risks. As the cycle of SMEs’ scientific and technological innovation is relatively long, and market regulation has spontaneity and lag, market defects will bring false information to entrepreneurs. If entrepreneurs judge inaccurately, it will bring risks to SMEs’ scientific and technological innovation achievements when they are put into the market. If the enterprise’s scientific and technological innovation achievements are not suitable or cannot meet social needs, cannot be accepted by consumers, and there is no market, the enterprise will have to bear considerable market risk. Enterprises may face difficulties or even close down due to this series of risks.

Actively participate in key national science and technology projects, make full use of innovation support policies, systematically build a framework for the development of industrial science and technology on this basis, formulate forward-looking strategic planning and gradually implement it. According to the top-level design and overall deployment, set up implementation standards with strong guidance and operability.

Combining the advantages of strong domestic demand and a large market size, formulate marketing strategies to continuously expand market share. At the same time, locate the international target market, understand the demand, competition and relevant regulations of this market, etc., make localized adjustments to the innovation results in terms of language, function and shape design according to the target’s demand and preference, and set up a special international team in charge of the promotion of the products.

Integrate internal and external resources of the enterprise and increase capital investment in science and technology research and development. Utilizing advanced digital technology, strengthen the enterprise’s informatization construction, enhance the level of informatization management and the ability to apply science and technology, further promote the enterprise’s digital transformation, and strengthen product innovation and technology accumulation. Promote the application of 5G technology and artificial intelligence in all aspects of the enterprise to improve production efficiency and the intelligent level of the enterprise [28]. With the construction of the free trade port, establish more exchange and cooperation with outstanding enterprises in the domestic and international markets, make full use of the industrial resource agglomeration effect, carry out technology transfer, market expansion and other cooperation projects, and deeply realize resource sharing and technological complementation, so as to enhance the international competitiveness of enterprises.

Keep abreast of current trends, ensure that the enterprise’s technological development is in line with the direction of government support, and establish good cooperative relationships with government departments. Deploy more resources to market research, stay up-to-date with market trends and changes in consumer demand, make technological improvements that match market needs, and launch products and solutions that meet the needs of the market.

Improve the process and treatment of talent introduction, and establish an innovative organizational culture and mechanism to cultivate an efficient R&D team with a sense of innovation. Establish an innovation incentive mechanism to encourage employees to continuously innovate and improve, support employees to actively participate in various innovation and exchange activities, improve employees’ enthusiasm and initiative in science and technology development, and integrate the strategy of science and technology development into the enterprise’s cultural construction.

Define the total amount of funds needed for science and technology innovation and its uses, and actively seek diversified financial support, including equity financing, debt financing, venture capital, and innovation funds. Consider working together on R&D with other enterprises to share R&D expenses and technical achievements, and speed up the process of technology application and transformation.

Strengthen cooperative research with universities and research institutes on basic projects to enhance the level of basic research and seek appropriate theoretical guidance. Strengthen cooperation with upstream and downstream enterprises to build a complete technology industry chain, form synergy, and achieve synergistic development of the industry. For successful projects, utilize channels such as seminars, exhibitions, conferences, interviews, etc., and make use of social media platforms such as Jitterbug, Weibo and Shutterbug for diversified promotion. At the same time, enterprises should pay more attention to the protection of intellectual property rights to ensure that the achievements of scientific and technological innovation are legally protected.

In the case of their own disadvantages and risks, enterprises must clarify their own positioning and carry out precise innovation. Analyze the internal and external environments of the enterprise, including market channels, competitors, technological strength, core resources, etc., to determine the enterprise’s unique value and differentiating advantages. Based on the market demand and its own core competitiveness, define the enterprise’s goal orientation, including whether to face the broad market or focus on specific market segments, and whether to focus on customer demand or technology leadership. Then determine the key areas of scientific and technological innovation, ensure that scientific and technological developments are consistent with the overall strategy of the enterprise, and connect them to long-term planning.

In the process of scientific and technological development, we give full consideration to ethics and social responsibility to ensure that scientific and technological innovation is in line with ethical and legal norms, to avoid ethical conflicts and negative social impacts, and to enhance the enterprise’s sustainable development capability. For the innovation results, outside experts are invited to cooperate with the internal personnel of the enterprise to carry out detailed analysis and verification in terms of its own advancement, feasibility, the process of innovation, the experience and economic benefits after completion.

The extracted cash flow values of AB’s operating, financing and investing activities for the period from 2015 to 2023 are included in AB’s cash flow profile as shown in Table 1.

Since 2015, AB’s continuously increasing cash flow from operating activities can show that the company’s production is expanding and sales continue to increase, and its cash flow from operating activities reached 11,598,300 dollars in 2023. And the cash flow from investing activities in the same period is also increasing year by year, which shows that AB’s investment used to improve production and technology inputs is also increasing to maintain AB’s competitive advantage, and AB’s cash flow from financing activities has been positive, which shows that AB has been operating healthily with the implementation of technology development strategy.

The founders of AB are predominantly technicians and have focused on improving the standards and treatment of talent acquisition. Technical personnel typically have working experience as core technology developers and project managers in SOEs or foreign companies before starting their business. The distribution of personnel ratio and educational structure are shown in Figure 2 and Figure 3 respectively. The proportion of technical personnel in AB to the total number of people in the company has gradually increased since 2015, with technical personnel accounting for 45% of the total number of people in the company in 2023. The technical staff basically have bachelor’s degree or above, and more than half of them have postgraduate degree, which leads to a gradual increase in the proportion of employees with postgraduate degree and bachelor’s degree among the staff, and a gradual decrease in the proportion of employees with less than bachelor’s degree, and the number of employees with bachelor’s degree and above reaches 94% in 2023. It establishes the foundation for the development of an efficient R&D team with a sense of innovation, and accumulates excellent and highly educated human resources for the development of the enterprise’s scientific and technological innovations.

Figure 2.

Technical personnel account for change

Figure 3.

Educational structure change

According to the science and technology development strategy of AB formulated earlier, combined with the current situation and historical data of AB, the statistics of the effect of the implementation of the development strategy of AB are as follows: after the reform and development of AB, it basically establishes the leading advantage of the total cost of the products, and by optimizing the customer management and service, shortening the billing period, and lowering the production cycle of the products, it has made the company’s strength and market competitiveness greatly enhanced. In this paper, we have selected the main products produced by the company in three types of fields, and the average cost change of the products and the production cycle of the company’s products are shown in Fig. 4 and Fig. 5, respectively. As can be seen from the figure, the production cost and production cycle of the products produced by the enterprise are decreasing year by year, and the average cost of the product numbered 1 is as low as 652 yuan in 2023, and the production cycle is also as low as 25 days. It shows that the proposed science and technology development strategy enhances the innovation ability of the enterprise, thus increasing the rate and efficiency of its production products. It contributes to the further expansion of the enterprise.

Figure 4.

Product development cost change

Figure 5.

Product development cycle

It is expected that the company will have a substantial increase in the development rate in the next five years under the application of the scientific and technological development strategy proposed based on the SWOT matrix model, bringing considerable cash flow and profits to the company, and the cash flow and profit statistical results of the five years under the application of the scientific and technological development strategy are shown in Table 2, from the table, the company’s annual sales scale has increased by more than 20% compared with the previous year, indicating that under the scientific and technological development strategy proposed based on the SWOT matrix model, the company can operate smoothly and grow rapidly.