SWOT Analysis – Opportunities and Threats

Last Updated
July 20, 2010

Opportunities

Keeping in mind what you have listed as your Company Strengths, SWOT Analysis can now influence the Opportunities for the business. These can be seen as targets to achieve and exploit in the future for example:

  1. Good financial position creating a good reputation for future bank loans and borrowings
  2. Skilled workforce means that they can be moved and trained into other areas of the business
  3. Competitor going bankrupt (Takeover opportunity?)
  4. Broadband technology has been installed in the area (useful for Internet users)
  5. Increased spending power in the Local/National economy
  6. Moving a product into a new market sector

Threats

The final part of the analysis will also be seen as the most feared- the Threats. It has to be done and therefore taking into account what you have listed as your weaknesses, the threats will now all seem too clear. Examples

  1. Large and increasing competition
  2. Rising cost of Wages (Basic wage, etc)
  3. Possible relocation costs due to poor location currently held
  4. Local authority refusing plans for future building expansion
  5. Increasing interest rates (increases borrowing repayments, etc)
  6. End of season approaching (if you depend on hot weather, etc)
  7. Existing product becoming unfashionable or unpopular

Using the Analysis

Once the SWOT analysis is complete, it will then be time to put it all together and look closely to form a strategy. This will involve how you can exploit the Opp ortunities and how to eliminate or deal with the Threats. This may well depend on your company’s original objectives and goals but the whole process will certainly give an overall look at the current position of your business. You might argue th at you can make a list in your head about the areas that make up your analysis and that no benefit can be derived from a SWOT exercise. Try a quick list with the four areas and identify where one area impacts on ano ther. If you find one instance that is a current issue, you would then have cause to complete the full analysis.

Summary

As previously stated, SWOT analysis is used primarily to evaluate the current position of your business to determine a Management strategy for the future. It should also help you to look at how you may do this by looking closely at your Weaknesses and Threats that you have identified. Great care needs to be taken when planning a strategy not to disturb the balance of your Strengths as you could find that your Strengths suddenly become a Weakness if you don’ t use them. The way that SWOT has been introduced to you is the simplest way that it can be found. It can be used further to analyze your business (depending on its size) on a Local, National and Global level. This is done by splitting up the Strengths, Weaknesses, Opportunities and Threats of your business into the appropriate category (e.g. High Unemployment in the area- Local Threat because of less spending). It cannot be stressed enough that the analysis is carried out fairly and thoroughly. This will then put you in a position to forecast and prepare for the future accurately to give realistic objectives and tasks.

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