SWOT Analysis – Focus on the Business
A SWOT analysis is a useful tool to account for, not only for your own business but for your competitors’ activities and current industry happenings as well when conducting strategic planning for any company. It provides an insight at a point in time, providing different pictures depending upon what it is focused on. A SWOT analysis allows you to focus one view on the business as a whole; another view of one operating division; yet another view of one sales territory. The term SWOT stands for strengths, weaknesses, opportunities, and threats.
Completing a SWOT analysis helps any business in identifying ways to minimize the affect of weaknesses in your business while maximizing your strengths.
Basic SWOT Analysis Strengths – Think about what your company does well. Some questions to help you get started are: What makes you stand out from your competitors? What advantages do you have over other businesses? It is important not to be modest; one of the strengths you take for granted might be something that your customers do value and that your competition does not have.
Weaknesses – List the areas that are a struggle for your company; things you do not have, things you cannot do, things you do not do well. Some questions to help you get started are: What do your customers complain about? What are the unmet needs of your sales force? This is time for brutal honesty – you cannot fool yourself, it is for your own sake and your business.
Opportunities – Traditionally, a SWOT looks only at the external environment for opportunities. Here one has to look externally for areas your competitors are not fully covering, then go a step further and think how to match these to your internal strengths.
Think in terms of what would benefit your customer – cheaper, easier, more convenient, faster, etc. Try to uncover areas where your strengths are not being fully utilized. Are there emerging trends that fit with your company’s strengths? Is there a product/service area that others have not yet covered?
Threats – As with opportunities, threats in a traditional SWOT analysis are considered an external force. By looking both inside and outside of your company for things that could damage your business, however, you may be better able to see the big picture.
Some questions to get you started: Are your competitors becoming stronger? Are there emerging trends that amplify one of your weaknesses? Do you see other external threats to your company’s success? Internally, do you have financial, development, or other problems? Strengths of family business Individuals set up their own business for the simple reason to make more money. This is because when working within a firm the only return you will get is the pay at the end of the week or month, but when working for your own business the return you will get back depends on how well you are doing in your business.
Therefore the owners of businesses tend to work much harder for the simple reason that success will be at their own benefit, i. e. a higher return. Since the business is your own and you are the boss you will manage the business your way; the way you like and you will be more committed on the place of work since you will have a personal interest in the business since it is your business. One can mention as well the fact that you will be your own boss. Since it is a family business you will be the boss and you will receive orders from nobody, therefore no one will be making pressure on you on how to manage the business.
Another point one can mention in family business and which is a strength to the business is the fact that one will choose an area which satisfy him and therefore he or she will be working in an area he or she enjoys doing. Therefore this helps the business to be more successful since the area chosen is of his or her interest (i. e. the owner). Strength of a small family business which can be an advantage to the country as well is the fact that such business is going to generate jobs for that country where the business is set up.
Therefore these businesses increase the workforce of a certain country and reduce unemployment. Since the business is run by the family, decisions are carried out quickly since in a small business one does not find organizational charts and there would not be so many people involved when they come to decision making. Weaknesses of Family Businesses It is hard for such business to set up because of the capital required to set-up such business. Sometimes these people may find problems when they come to deal a bank loan, because banks’ attitude regarding small businesses considers it to be too risky.
Another weakness small business can face is the lack of cash. This can be due to the late payments by your debtors, where at times they take long to pay you, and you will spend time and money chasing them before receiving the money, and you will end up making a loss instead of the profit you thought you would do when selling them your products. Another issue one has to consider is the fact that one cannot keep family issues out of the business, and this can be a serious threat to such business.
Family issues have to be left outside the company and should be kept within the family in order to leave the least effect on the business. Opportunities of Family Business The external environment may reveal new opportunities. These opportunities may include an unfulfilled customer need, the arrival of new technologies, loosening of regulations, and the removal of some international trade barriers. However, it is up to the business owner to be able to take full advantage of these opportunities.
You should be able to discover what the customer really wants, and be able to satisfy him. Exploit any loosening of government regulations, take advantage of any mergers, partnerships, joint ventures, etc. These can lead to more profits, due to better management, better marketing, etc. Threats of Family Business Here one have to mention that family businesses at times are not appreciated amongst the authorities and the general public of the country where they are situated. One has to say that small businesses help both the country and even the general public.
Also read AT&T SWOT analysis
They help in creating new job opportunities, thus improving the situation in the job market and solving a number of serious social problems. Another threat could be that people would not demand local products, but might prefer to buy foreign products; therefore these businesses can end up with low demands. Conclusion A firm or business, whatever its size, being a large multinational company or just a small family business, needs to adjust to changes in its respective industry or market. If a company does not adjust then it would be risking to loose track and fall.
If a competitor decides to move for something else within the market and takes your customers, then you should follow your competitor’s tracks and try to provide something which could better attract customers. Never lay back, it could result in serious problems – problems which could lead to closing down your doors. You need to be good at recognizing phases of growth and managing your way through these phases. This could only be done by getting a hand at achieving up to date and accurate information about every aspect of business from marketing to human resource management.
The creation of a more enterprise-friendly environment through the removal of excessive bureaucracy and a better use of resources would help to better make your way through. Becoming a better thinker and planner, be able to give an ear to others’ experiences, and be able to reflect on your clients’ needs, are necessary issues to become the entrepreneur you really need to be.
Agius, M. (2001) An analysis of the perceived causes of small business failure in Malta. Unpublished B. Acc. (Honours) dissertation, UOM: http://www.fhrd.org