SWOT Analysis

A SWOT analysis identifies your businesses internal strengths and weaknesses and external opportunities and threats.  If you are a sole trader, it may also be prudent to incorporate your own personal strengths and weaknesses when developing your SWOT.  As with the key business objectives and strategies section, I like to include strategies here too.  This allows you to identify options to capitalise on your strengths and opportunities and manage risks associated with weaknesses and threats.

This example of a SWOT analysis, below, is taken from a business plan I developed many years ago. It has no relevance to any business now trading under this name. 

 

Business Strengths

Associated Strategies

1. The ability to communicate well with people and provide exceptional customer service

1. Always treat customers with respect and integrity, at the same time being friendly and helpful to meet their requirements and exceed expectations

2. Ensure that customers are satisfied with their products by providing follow up contact where possible

3. Act as a sales representative myself to keep in touch with valued clients at regular intervals

2. The ability to provide a product range of exceptional originality and quality

1. Constantly source new products that meet standards set by the business and those expected by customers

2. Never compromise quality standards for the sake of profit.

3. Owner / operator has completed Diploma in Business Management and conducted in depth market research

1. Ability to utilise knowledge gained throughout the course and over 5 years of business management experience in the retail and sales industry

2. Through the completion of extensive market research, it is possible to identify specific businesses that desire increased contact with suppliers and therefore capitalise on this desire

4. Not necessary to rely on banks for start up finance

1. Low start up costs due to the fact that there is no need to purchase any expensive equipment

2. Operate business from a studio at a low rent, non-commercial premise thus there are no extra rental expenses and minimal overheads

3. Keep up to date with trends in the industry and constantly provide new and exciting products for customers to choose from.

5. Have product range expand to include a variety of handmade homewaremonths by the end of the first twelve months

1. Spend time each week sourcing new product

2. Take short courses to learn how to produce items that interest me

3. Encourage continued feedback from retailers on shelf life of various products and consumer buying patterns

4. Subscribe to home decorator magazines and publications to keep up with new and changing trends.

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Business Weaknesses

Associated Strategies

1. Distance between potential retailers is significant

1. Prepare a detailed roster to visit customers in similar geographic areas on the same day. This will decrease the amount of time needed for sales and promotion thus increasing time available for production and manufacturing.

2. Create a website and sales brochures that display and promote product available for retailers / customers to purchase. Utilise these as marketing tools so that a personal visit is not always necessary upon initial contact.

2. Lack of room available in current premises for production and storage of stock.

1. Move to a residence that has suitable space for production and storage of stock.

2. Investigate possibility of renting cheap factory space to produce and store stock.

3. Lack of practical experience in mass production of stock

1. Undertake business mentoring program with business person experienced in this area

2. Look at courses available that will assist with logistics of mass production of stock.

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Business Opportunities

Associated Strategies

1. Market research has indicated very large numbers of potential customers

1. Contact owners of retail outlets in tourist areas in and around Melbourne

2. Contact owners of houseware, giftware and novelty stores in and around Melbourne

3. Start a weekend market stall to capitalise on current trend for ‘craft’ products

2. Open a market stall to sell products direct to the public and also to see emerging trends first hand

1. Contact councils for information on weekend markets

2. Investigate private organisations that hold weekend markets around Melbourne – eg. Flemington market on first Sunday of every month

3. Immense number of potential raw material suppliers

1. Contact local product suppliers to ascertain service and price specifications

2. Develop relationships with homeware and gift shops to remain up to date with market trends

3. Develop relationships with product suppliers to remain up to date with market trends

4. Market research indicates that there is a trends towards ‘cottage craft’ home decorating as society becomes more environmentally aware

1. Aim to supply larger retail outlets such as IKEA, Freedom and Target Home with a variety of popular products

2. Possible to capitalise on this market trend during the second or third year of business by opening a retail outlet and supplying it with stock from own warehouse

3. Subscribe to ‘home decorator’ and cottage craft publications to monitor trend within the industry

5. There is no other supplier in Melbourne who only sell products handmade by Australian craftspeople

1. Possible to corner the market in this area and solidify business position before competition comes along

2. Invest in marketing campaign to ensure the community is aware of the establishment of my business and the products we supply

6. Due to diversity in the range of products, it will eventually be possible to explore new outlets not previously seen as preferred target market

1. Explore the possibility of exporting a number of products lines that may sell well overseas

2. Look at engaging the services of a consultant who specialises in exportation of products internationally

7. Owners of retail outlets targeted through market research have indicated that it is difficult to find reliable, friendly, cost efficient suppliers

1. Capitalise on this gap in the market by establishing myself as a provider who is reliable, cost efficient and friendly

8. Provide Tailor Made Homewares as a salesperson to the crafts people of Melbourne in order to gain their business

1. Attend networking events relevant to the industry

2. Undertake cold-calling plan to establish contacts with crafts people throughout Melbourne

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Business Threats

Associated Strategies

1. Some crafts people may not want to supply me with stock due to decreased profit margin

1. Promote the fact that they will be selling larger volumes because of my established network of retailers wishing to purchase products

2. Develop a base commission structure but be flexible enough to negotiate commission on an ‘as needs’ basis

2. Across the board, imported home decorator products and giftware are cheaper in general than Australian made products

1. develop and promote an on-going marketing campaign promoting ‘quality’ Australian made products

2. Consistently display the “Australian Made” sticker on all products

3. From market research conducted, it was found that products sold in stores are more expensive than those same products sold at specialist craft markets

1. Keep profit margins at a realistic minimum in order to keep costs down, therefore allowing the retailers to sell products for less and thus increasing volume of sales

4. At present there are no other wholesalers providing this proposed product or service, there is potential for someone to imitate this business idea within a short space of time

1. Build a strong and stable rapport with both suppliers and retailers to ensure Tailor Made Homewares is the preferred supplier. This will create difficulty for a new company attempting to imitate this idea.

2. Implement a marketing campaign promoting all the features that retailers desire – flexibility, reliability, price consistency

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