Performing a SWOT (strengths, weaknesses,
opportunities, and threats) analysis of your business
will help you put your business into perspective. An
effective SWOT analysis represents the first step in
any planning process, by providing a framework for you
to use to look objectively at both the internal
and external factors that affect your business.
Identifying the relevant factors for your business is key
to developing your marketing and business
strategies.
Strengths and Weaknesses
Strengths and weaknesses are internal factors. Your
company's strengths reflect your
resources and capabilities and can be used to develop
your company's competitive advantage. Some
examples of strengths:
Patents
Skills and expertise of
employees/management
Low overhead
Strong customer base
Exclusive rights to a product or
resource
Weaknesses are often revealed as gaps
in certain strength areas. In addition, a weakness may
be the flip side of a strength. Some examples of
weaknesses:
Limited brand recognition
Lack of financial capital needed to invest in new
equipment
High cost structure
Small customer base or reliance on a few
large customers
Opportunities and Threats
Opportunities and threats are external factors and
require an external environmental analysis.
Opportunities represent changes or
developments in the world around you that may present
new growth opportunities. Some examples of
opportunities:
A change or loosening of regulation
Introduction of new technology
Changes in the economy that could
stimulate demand for your products/services
Local development that offers
opportunities to expand your customer base
Because threats come from the external
environment, they have the potential to blindside your
business. You need to be on the lookout for changes
and developments in the external environment so that
you aren't caught unprepared. Some examples of
threats:
Changes in regulation that could
negatively impact your business
The arrival of a major competitor in your
city
Emergence of new products that could
replace your product/service
Changes in consumer buying behavior or
changes in demographics that drives demand away from
your product/service
So what's next?
Evaluate your own internal strengths and
weaknesses. Determine what threats face your
business from external sources. List your opportunities
to build your business. Plan how to turn your internal
weaknesses and external threats into additional
opportunities.
Be objective! There's a risk that subjectivity will blind
you to aspects of your business or environment that
may be crucial to your success. Consider working with
a professional to perform an objective assessment of
your business.
Need some help performing a SWOT for your business?
