SWOT Analysis

As the precursor to developing a strategic plan, it is desirable to clearly identify the current status, objectives and strategies of an existing business or the latest thinking with respect to a new venture. Correctly defined, these can be used as the basis for a critical examination to probe existing or perceived Strengths, Weaknesses, Threats and Opportunities (SWOT). This then leads to strategy development covering the following issues, which are discussed in more detail below.

SWOT Sample

Strengths

  • R & D almost complete
  • Basis for strong management team
  • Key first major customer acquired
  • Initial product can evolve into range of offerings
  • Located near a major center of excellence
  • Very focused management/staff
  • Well-rounded and managed business
Weaknesses

  • Over dependent on borrowing – Insufficient cash resources
  • Board of Directors is too narrow
  • Lack of awareness amongst prospective customers
  • Need to relocate to larger premises
  • Absence of strong sales/marketing expertise
  • Over dependence on few key staff
  • Emerging new technologies may move market in new directions
  • Computer equipment needs to be updated, and staff training needs to happen.
Threats

  • Major player may enter targeted market segment
  • New technology may make products obsolescent
  • Economic slowdown could reduce demand
  • Euro/Yen may move against $
  • Market may become price sensitive
  • Market segment’s growth could attract major competition
Opportunities

  • Market segment is poised for rapid growth
  • Export markets offer great potential
  • Distribution channels seeking new products
  • Scope to diversify into related market segments

The next step is to reorganize SWOT analysis into administrative categories:

Financial

  • Economic slowdown could reduce demand
  • Euro/Yen may move against $
  • Market may become price sensitive
  • Over dependent on borrowing –
  • Insufficient cash resources
  • Market segment is poised for rapid growth
Human Relations

  • Basis for strong management team
  • Very focused management/staff
  • Board of Directors is too narrow
  • Over dependence on few key staff
  • Staff training needs to happen
Operations

  • R & D almost complete
  • Initial product can evolve into range of offerings
  • New technology may make products obsolescent
  • Economic slowdown could reduce demand
  • Need to relocate to larger premises
  • Emerging new technologies may move market in new directions
  • Scope to diversify into related market segments
  • Computer equipment needs to be updatedWell-rounded and managed business
Marketing/Sales

  • Key first major customer acquired
  • Initial product can evolve into range of offerings
  • Located near a major center of excellence
  • Major player may enter targeted market segment
  • Economic slowdown could reduce demand
  • Market may become price sensitive
  • Market segment’s growth could attract major competition
  • Lack of awareness amongst prospective customers
  • Absence of strong sales/marketing expertise
Communications/IT

  • Computer equipment needs to be updated, and staff training needs to happen.
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