5. SWOTs - Keys to Business Strategies

Having built up a picture of the company's past aims and achievements, the all-important SWOT (strengths, weaknesses, opportunities and threats) analysis can commence.

Strengths & Weaknesses

Strengths and weaknesses are essentially internal to the organization and relate to matters concerning resources, programs and organization in key areas. These include:

• Sales - marketing - distribution - promotion - support;
• Management - systems - expertise - resources;
• Operations - efficiency - capacity - processes;
• Products - services - quality - pricing - features - range - competitiveness;
• Finances - resources - performance;
• R&D - effort - direction - resources;
• Costs - productivity - purchasing;
• Systems - organization - structures.

• If a startup is being planned, the strengths and weaknesses are related mainly to the promoter(s) - their experience, expertise and management abilities - rather than to the project.

The objective is to build up a picture of the outstanding good and bad points, achievements and failures and other critical features within the company.

Threats & Opportunities

The external threats and opportunities confronting a company, can exist or develop in the following areas:

• The company's own industry where structural changes may be occurring (Size and segmentation; growth patterns and maturity; established patterns and relationships, emergence/contraction of niches; international dimensions; relative attractiveness of segments)

• The marketplace which may be altering due to economic or social factors (Customers; distribution channels; economic factors, social/demographic issues; political & environmental factors)

• Competition which may be creating new threats or opportunities (Identities, performances, market shares, likely plans, aggressiveness, strengths & weaknesses)

• New technologies which may be causing fundamental changes in products, processes, etc. (Substitute products, alternative solutions, shifting channels, cost savings etc.)

• Against an uncertain and shifting background, the objective must be to identify and prioritize the key SWOTs in a one-handed manner (Don't say "on the one hand ...........but on the other hand.........").
  Develop Business Strategies
  Once the SWOT review is complete, the future strategy may be readily apparent or, as is more likely the case, a series of strategies or combinations of tactics will suggest themselves. Use the SWOTs to help identify possible strategies as follows:
  Build on strengths
  Resolve weaknesses
  Exploit opportunities
  Avoid threats
• 
  The resulting strategies can then be filtered and moulded to form the basis of a realistic strategic plan - see also Devising Business Strategies for further insights into the development of strategies.