In SWOT, strengths and weaknesses are internal factors.

For example:

A strength could be:

y y y y y

Your specialist marketing expertise. A new, innovative product or service. Location of your business. Quality processes and procedures. Any other aspect of your business that adds value to your product or service.

A weakness could be:

y y y y y

Lack of marketing expertise. Undifferentiated products or services (i.e. in relation to your competitors). Location of your business. Poor quality goods or services. Damaged reputation.

In SWOT, opportunities and threats are external factors.

For example:

An opportunity could be:

y y y y y

A developing market such as the Internet. Mergers, joint ventures or strategic alliances. Moving into new market segments that offer improved profits. A new international market. A market vacated by an ineffective competitor.

A threat could be:

y y y y y

A new competitor in your home market. Price wars with competitors. A competitor has a new, innovative product or service. Competitors have superior access to channels of distribution. Taxation is introduced on your product or service.

Simple rules for successful SWOT analysis.

y y y y y y

Be realistic about the strengths and weaknesses of your organization when conducting SWOT analysis. SWOT analysis should distinguish between where your organization is today, and where it could be in the future. SWOT should always be specific. Avoid grey areas. Always apply SWOT in relation to your competition i.e. better than or worse than your competition. Keep your SWOT short and simple. Avoid complexity and over analysis SWOT is subjective.

SWOT Analysis Examples: Strengths Possible Strengths Tangible Strengths Consider your assets including plant and equipment Response Is it a strength?

Assets are really only No shop fittings and stock with two computers and software. Do you have long-term rental contracts for 3 + 3 + 3 year lease in No, same as your business locations? major shopping center, our location within the shop competitors is at the will of the center, poor sales will result in a shift to a low foot traffic location. Are your products unique or market leading? No, stock is the same as No our competitors. We can pick and choose what styles to stock. Have you got sufficient financial resources to No, we do trade No fund any changes you would like to make? profitably, but are not able to fund an expansion to a larger footprint store. Do you have any cost advantages over your No, rents are all pretty No competitors? standard, you can save on rent but loose the foot traffic, so it is all relative. Do you use superior technology in your No No business? Is your business high volume? No. We do sell a lot, but No

Can your scale up your volume if you need to? Intangible Strengths Do you have or stock strong recognizable brands

not as much as some of the larger retail stores. Our product is high quality, high margin and low volume in comparison Not really, orders are placed in advance, shop size is restrictive. Yes, though the brand space is becoming cluttered with more and more recognizable brands. Depleting the value of any one brand. No.

No

Yes

Your reputation - are you considered a market leader? or an expert in your filed? Do you have good relationship with your customers? (Goodwill)

No

Yes, we have a good Yes connection with our customers, our email list grows and many customers advise they were referred to us by their mates. We get a lot of repeat customers. Do you have strong relationships with your Yes, though we are just Yes suppliers another supplier to them. We are able to differentiate from our competitors. We have long term agreements in place with some suppliers to be their sole representative in this region. Do you have a positive relationship with Yes, though we only No, our your employees have a few employees competitors also have good employee relations Do you have any unique alliances with other No, maybe our territory No businesses? agreements with some

Do you own any patents or proprietary technology? Do you have a proven advertising process that works well?

suppliers. No

No Yes

Email news letter with specials and new stock, seems to work for retaining customers. Most new customers were attracted to the shopping complex. Do you have more experience in your field? No Are you managers highly experienced? No Do you have superior industry knowledge? No, though we do have a good set of sales skills, particularly up selling and forming relationships. People feel good coming by and seeing us. Are you involved with industry associations? No Is your business Innovative? No, only in sales and relationship building. Other Strengths Current location Current location in the center has high traffic, in an area with several other shops targeting the same market which draws people to the area Our innovation is in our sales technique and point of sale displays

No No No

No No

No

Yes

Summary The key strengths for the business are 1. Unique brands protected by sole supply agreements 2. Successful relationship marketing, and 3. Innovative sales techniques

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SWOT Analysis Examples: Weaknesses Possible Weaknesses Response

Is it a Weakness?

Tangible Weaknesses Is your plant and equipment N/A N/A old or outdated? Is your product line too Maybe, we only sell a few of brands Maybe narrow? of men clothing, we could stock more accessories, but we dont want to confuse the customer about what line of business we are in. Have you got insufficient Yes, we often think about opening a Yes financial resources to fund bigger store, but the rent would be an any changes you would like issue if we did not get immediate sales to make? Do you have a high overall No No unit cost relative to your competitors? Do you use inferior No No technology in your business? Do you have low volume Yes, it may take a few weeks to No, all retailers and are restricted in your replenish stock, less early in the are in the same ability to scale up? season. But late in the season our situation suppliers are often out of stock of the quick moving products Intangible Weaknesses Do you have a weak or Yes, maybe our shop name is not a Yes unrecognizable brand? public recognizable brand but our stock is. Some of our competitors are franchise and everyone knows them Do you have a weak or No, our shop frontage tends to draw No unrecognizable image? people in Do you have a poor or No, we have great relationships with No impersonal relationship with our customers your customers? Do you have a poor No No relationship with your suppliers? Do you have a poor No No relationship with your employees? Is your marketing failing to No No

meet objectives? Are your managers inexperienced? Do you have low R&D? Do you lack industry knowledge? Do you lack innovative skills? Other Weaknesses Specify

Yes, I have less than 2 years in Retail n/a Yes, maybe No

Yes N/A Yes No

None

Summary The key weaknesses for the business are 1. Small store size and inability to find an expansion, resulting in stocking a limited product range 2. Shop name is not well known 3. Manager has limited industry experience and industry knowledge

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SWOT Analysis Examples: Opportunities Possible Opportunities Industry Opportunities Can you expand your product range? Can you diversify your business interests? Can you expand into your customer's field? Can you expand into your supplier's field? Can you expand your customer base? Response Is it an Opportunity? Yes

Yes, there are no contractual restrictions to us adding products to the store, store size is an issue Maybe, if we had the funds No, the customer is the consumer Yes, I dont have the skills to establish an import business Maybe, through internet sales and mail order, maybe open another location

No No Yes Yes

(Geographically or through new products) Do you have placid Yes, there is not a lot of competitive competitors? advertising in our niche, and price is not so much of an issue to our customers Do you have any export No, we import opportunities? Will the total market for Yes, but not significantly your products grow? Macro Opportunities Are there any favorable No changes to legislation pending Will there be any changes to No, almost all clothing is imported any import/export there is little domestic production and a constraints that will be lack of ability for domestic producers favorable for your business? to scale up. Any changes will impact all retail outlets equally. Is the economic outlook No, however this may play favorably favorable? to our business as our target market might postpone larger expenses as a result a greater share of purse may be allocated to clothing this is yet to be proven. Are there any favorable Due to increases in housing prices our cultural shifts that will target customer has opted to postpone benefit you? taking on longer term debit. Instead to remain in the nest for longer. This trend increases their customer life for our products. Are there any changes in the Use of internet to increase marketing use of technology that your and online sales. business can utilize such as Ecommerce or Internet sales? Other Opportunities Summary The key opportunities for the business are 1. 2. 3. 4.

Yes

No No

No

No

No

Yes

Yes

Backward integration in the supply chain to include importing directly Increased geographic coverage Leverage the growth of the internet to enhance business Increase life of customer was 18 24 year old males, now 18 29 year old

males

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SWOT Analysis Examples: Threats Possible Threats Response Is it a threat? Industry Threats Will low cost imports No, our shop appeals to the middle No impact your business? income bracket who are not interested in low cost alternatives. Though high quality low cost imports will increase our margin. Do consumers have a Yes, many other products in the No choice to use a substitute category product? Are substitute product sales No more than ours, the market share is No increasing? reasonably consistent Is your market in slow No, our market is relatively stable, No growth or in decline? maybe slight growth Is the power of your No, maybe one supplier is trying to No customers or suppliers increase prices above CPI, but we can growing, can they dictate stop selling their stock and shift to price? another supplier of a similar quality product Are the needs of your Yes, every season fashion changes, Yes buyers changing? however the need for medium quality products remains unchanged. Macro Threats Will foreign exchange rate Yes, declining dollar will impact us, and Yes changes affect your imports all others in our industry, may also or exports? reduce sales if we pass price on to customer Are there any changes in Maybe an increase in awareness about No demographics that will the behavior of governments of low cost impact your business producing nations may eventually impact our supply chain. Is regulation in your No No industry increasing? Other Threats

Rent Location

Rent can go up reducing our margins Our rental contract allows the center to move our business location, if they believe another business will make them more profits.

Yes Yes

Summary The key threats for the business are 1. 2. 3. 4. Changing fashion trends may shift consumer interest in our product range Exchange rate variation may impact costs Rents increasing above CPI putting pressure on our margins Center owner shifting us within the center

Improve your understanding of SWOT by looking at at all of our SWOT analysis examples SWOT Analysis Examples Summary Retail Clothing Business Internal Strengths Weaknesses 1. Unique brands protected by sole 1. Small store size and inability to supply agreements find an expansion, resulting in 2. Successful relationship stocking a limited product range marketing, and 2. Manager has limited industry 3. Innovative sales techniques experience and industry knowledge

External 1. Opportunities Backward integration in the supply chain to include importing directly Increased geographic coverage Leverage the growth of the internet to enhance business Increase life of customer was 18 Threats 1. Changing fashion trends may shift consumer interest in our product range 2. Exchange rate variation may impact costs 3. Rents increasing above CPI putting pressure on our margins

2. 3. 4.

 24 year old males, now 18 29 year old males

4. Center owner shifting us within the center

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