Entrepreneurship I: 3.05 Conducting a SWOT Analysis

Strengths

-Any resource/capability that a business has that helps gain competitive advantage -Ex: what you do well, talented staff, location, product that no one else has, and resources you have

When Should a SWOT be Conducted

-As a part of an overall corporation planning process -when a company wants to get a picture of how they should position against the competition -When seeking out a new opportunity and forecasting longer term opportunities -To help a company be better prepared for changes in the external environment -Annually

S-T

-Business strengths to overcome threats -Ex: fast food is a big threat to diner, have a good reputation for friendly staff and the best pancakes, market diner as welcoming and wholesome alternative to fast food

Internal Factors

-Changes in spending on company marketing and promotion mix -Changes in different territories and markets -Change in sales management practices -Changes in the number of sales people supervised by one person

Benefits of a SWOT

-Cheap -Anyone who understand it -Business can do it -Don't have a lot time to address a complex situation

W-T

-Ensuring business weaknesses don't make you vulnerable to threats -Ex: Starbucks and other coffee chains threat to the diner, have limited beverage menu, consider explaning beverage menu to complete with competition

Opportunity

-Favorable situation -Ex: major competition goes out, favorable economic trends, new technology, and new product competition doesn't have

S-O

-Focus on opportunities that are a good match with business strengths -Ex: own a diner with a good reputation, restaurant down the street closed, use reputation to attract those customers

External Factors

-Intensity of competition -Total market potential -Concentration of potential high volume buyers -Geographic distribution of customers

Weaknesses

-Limitations/short comings that keeps you from achieving your objectives -Ex: lack of resources, losing money, lack of experience, bad reputation, bad customer service, and competition is doing better

Step 2: What Might Be

-List opportunities in future -Opportunities potential future strengths and vice versa with threats

Step 1: Info. Collection, Here, and Now

-List strength and weaknesses that exist now -One-on-one interview or group brainstorm -Prepare questions related to specific company/product -Search for insight

W-O

-Overcoming business weaknesses so a business can pursue opportunities -Ex: diner has poor advertising strategy, want to take advantage of gaining customers from surrounding town, plan - improve ads

SWOT Strategies

-S-O -S-T -W-O -W-T

Long Wait Time can be Both Strength and Weakness

-Shows demand -Some may be turned off by a long wait

Steps for SWOT

-Step 1: Info. Collection, Here, and Now -Step 2: What Might Be -Step 3: Plan of Action

Who to Involve in SWOT

-Those who want to improve competitiveness of their company, region, or county -People directly involved in various hierarchical levels of decision making in an organization -Should be wider sample if SWOT analyzes concerns whole region/nation -Reps from a variety of stakeholder groups

By Using a SWOT You Can:

-Understand your business better -Address weaknesses -Deter threats -Capitalize on opportunities -Take advantage of strengths -Develop business goals and strategies for achieving them

Threats

-Unfavorable situation in a business environment -Ex: unfavorable economic trends, better features/benefit from competition, and new technology makes product obsolete

Step 3: Plan of Action

Review SWOT with the view of creating action plan to address the 4 areas

SWOT Analysis

Strategic planning technique that analyzes a company's internal strengths and weaknesses and studies the opportunities and threats in the external environment