SWOT Analysis and Your Business

The other day I was walking by a bank and saw a driver exiting a drive through at the bank and he turned too early and scrubbed his tires. Just while the car was scrubbing their tires I was thinking, “what could they have done to prevent that?” Maybe the only damage might be the rubber being rubbed on the curb, but the possibility could’ve been worse. He could have damaged a rim. He could have knocked the bead off the rim and cause all the air to pop out. When I was thinking about that, I thought what the root cause for that to happen?

Obviously, they did not consider the obstacles that were near them or they misjudged the distance of the curb. If they thought to look around and observe the obstacles near them, how close, what location, how to avoid these obstacles?

Which made me think that this would be a good example of how businesses do not look ahead and/or plan and consider their long-term strategy. In business, there are tools to use that can help break things down to help see obstacles or possible obstacles and start making plans to be able to not only avoid them, but pull away and prevent possible damage and be able to successfully pull ahead of obstacles and the competition.

One of the tools that could be used is call SWOT analysis. SWOT analysis is a tool we learned in business school. Interesting that I have not really heard anyone talk about it since. I feel it is very necessary tool to look at and work on when reviewing your company’s strategy. SWOT analysis stands for Strengths, Weaknesses, Opportunities, and Threats. Small businesses tend to get into the problem of busy-ness and do not get around to looking at their long term strategies.

What to watch for:
Planning your strategy is not only for when starting your company, but is very important to review and re-plan your strategy often, at the minimum once a year. You could make it a fun event, like a getaway for your top executives or just yourself. Getting out of the normal culture can sometimes help with focus on forward thinking that you need to be doing. What is Important to remember, the old adage, if you fail to plan, you plan to fail.

Strengths:
You should be reviewing what your company does best. What ways can you capitalize on them? What and how to do more of what you do best? Are you the top company out there that is doing what you do best? Make sure to honestly evaluate can you stay on top, and how to improve in order to fend off other competitors. I like to think about when I was a kid and playing king of the mountain.

Weaknesses:
What is your company weak at? How can you get better? How bad are these weaknesses? Do you need to hire someone to compensate for these weaknesses? Depending on the situation, you may need to make an honest assessment: are these weaknesses going to drive the business down.

Opportunities:
What are some ways you can capitalize on your strengths? What can you do to try to improve upon your weaknesses? Are there actions that could increase sales? Or profit margin?

Threats:
Are competitors knocking at your door? Are they pulling far ahead? What are their strengths? What are their weaknesses? Can you exploit their weaknesses? (Legally and ethically). Is there some area or market they are not serving well? Are you vulnerable to theft: physical and intellectual.

Who moved my cheese:
There is a book written by Spencer Johnson call “Who Moved My Cheese”? The Premise is that the world is constantly changing. You need to be paying attention to details of your business environment, making sure to be able to look ahead and make educated anticipation about where the market is heading and what you need to do to get out ahead and stay ahead of the pack.

Strategic planning is your organization’s process of defining its strategy, or direction and making decisions on allocating its resources to pursue the strategy. Minimizing obstacles and threats to adjust and plan around those obstacles for safe navigating. As the Leader of your organization, you need to be leading your team in a path chosen and in the direction of growth to ensure success.