Using the SWOT analysis tool, we’ve previously highlighted our internal strengths and weaknesses that can provide a competitive advantage in our operations. Today, in our journey for the continuous improvement of our businesses, we focus on identifying the opportunities and threats that can impact our business’ success. This analysis may require a little more effort to research data and regulations for your market.
While opportunities and threats are generally considered external factors that impact your business, keep in mind that your previously identified strengths and weaknesses can also cause internal opportunities and threats that you will need to address. The good news is if they are identified early, strategies can be implemented to mitigate their effects. The following suggested questions can aid as a guide to help you identify the opportunities and threats for your business. Consider these questions from several perspectives: as a business owner, an employee, a customer, a supplier and a competitor.
Opportunities: these are the things that can help you achieve your business goals if you can capitalize on them in a timely manner.
- What are some changes in your industry/market? These can come in several forms:
- Government policy changes (tax laws, neighborhood reclassifications, etc.)
- Market expanding into a foreign country or another city
- New technology
- New product
- What can be done today that isn’t being done?
- What is missing on the market?
- Who can support your business and how?
- What trends appear to be emerging in the market?
- What are your competitors now doing well that you can do well?
- Are there opportunities to foster goodwill with your customers and the community?
- What local events provide a venue to advertise your business?
- Are there underserved areas where you may be able to create a niche market or gain first settler advantages?
- How are customers responding to your branding and messaging campaigns?
Threats: these can adversely affect your organization’s performance
- Are there existing or new regulations that can impact how you do business?
- Who are your competitors? What are they doing better than you?
- Are there new technologies that may make your products or services obsolete?
- Are there any political or legal issues that can affect you?
- Are there any changes to your customer base dynamics or preferences?
- How is the economy performing?
- What would you do if your biggest client/customer base shrunk dramatically?
- Can the weather affect your operations? What is the emergency preparedness plan?
- Are there any negative customer reviews or social media buzz that you need to address?
Sir Winston Churchill stated, “a pessimist sees the difficulty in every opportunity. An optimist sees an opportunity in every difficulty”. Identifying threats does not mean your business is automatically in jeopardy; sometimes with proper planning and ingenuity, you can turn a threat into an opportunity. The primary objective of a SWOT analysis is to help organizations develop a full awareness of all the factors involved in a decision. Even if you were not able to fully answer all of the questions posed or did not like the answers, an honest and objective look at your business, its operations, and the market can provide you with actionable steps to capitalize on opportunities to help increase your competitive advantage.