In this post, I’ll discuss the last element of SWOT: Threats
Threats
Finally, you need to look at the threats to your business. Although we don’t like to think of them, we all face threats in our business. Many times, threats are out of our control. These can be a downturn in the economy (such as we have recently experienced), a shift in market demographics, or perhaps a new super store opening in your local area. It is vital to think about and be prepared for such events.
- What obstacles does your company face?
- What does your competition offer that could take business away from you or stunt your company’s growth?
- Are the required specifications or regulations for your products or services changing?
- Is your position in the market threatened by changing technology?
- Do you have cash flow problems that could keep your company from acquiring necessary or new technology, staff or equipment?
In answering these questions and the questions in the previous two posts, you must be brutally honest about your business. Not doing so will significantly affect the accuracy of this competitive analysis. The answers to these questions will give you priceless insight into your business, your market, and your competitors. Completing your SWOT analysis will put you in a better position to develop a strategic plan that considers your competition, market trends, customers’ needs and your company’s ability to compete in the marketplace. It is important that your strategic plan be aimed at allowing all members of your organization and/or investors understand your market position and how your company plans to compete.
Recommended Book
Here is another book that provides excellent guidance and a step-by-step process on conducting analysis of your competition, as well as tips and tools to find the answers you need.
Competitive Strategy: Techniques for Analyzing Industries and Competitors
This is a more advanced book that provides a solid outline of subjects and questions to improve your thinking and help your company get to be a step ahead of the competition.
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