Strengths and weaknesses, opportunities and threats

An evening at the dojo

For those who haven’t bought Marketing White Belt or haven’t gotten a business degree, the SWOT analysis is one of the oldest methods of assessing your company’s capabilities and abilities to respond to different business situations. I won’t rehash the basics of SWOT here, but I do want to highlight something I persistently see wrong in SWOT analyses on a regular basis.

Strengths and weaknesses are capabilities. They’re internal factors, factors under your control. You may be strong at creativity but weak at analysis. You may be strong at selling but weak at lead generation. You may be strong at marketing but weak at customer service. A competitor cannot make you weak. A customer cannot make you strong. These are factors solely under your control.

Opportunities and threats are situations. They’re external factors that you probably cannot control but necessitate a response. A new regulation that the government passes can be a threat, and that threat requires a response of some kind. A competitor sets themselves on fire with a horrible product launch, and that presents an opportunity, perhaps one you didn’t plan for, but one that you might not be able to pass up.

When you’re evaluating something to put in a SWOT analysis, ask yourself this simple question: do you have control over it? If you have control over it, it’s a strength or weakness. If you don’t, it’s an opportunity or threat.

Here’s the next level of insight for a SWOT analysis: your strengths and weaknesses determine your ability to respond to opportunities and threats. If you want to respond more capably to an opportunity or threat, your strengths must be improving all the time and your weaknesses must be diminishing all the time. These are the things that are under your control, and thus these are the things that you can work on to modify the outcome of any opportunity or threat.

Let’s say you’re strong at marketing but weak at cash flow. A threat comes along, a new piece of legislation is introduced that endangers your business. It’s a clear threat. If you were strong at cash flow, you could simply buy a competing legislator and have them release a piece of legislation or water down the existing one to be toothless. But you’re not, and that’s a weakness you can focus on improving. However, the threat still remains. Your strength, marketing, can be leveraged to create a grassroots movement to oppose the legislation and mitigate or nullify the threat.

This is the value of the SWOT analysis. SWOT is good at more than just telling you what’s happening and what you’re good or bad at. SWOT is, in the right hands, good at forecasting how well you will respond to things in your environment based on your capabilities, and it creates a blueprint for understanding what you need to work on in order to improve. Focus on increasing your strengths and mitigating your weaknesses, and the next opportunity or threat that comes your way won’t stand a chance against you.


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  • http://www.DataScopic.net/ Oz

    Very good!

    One way I’m dealing with this, as a solopreneur, I’m glad to host my workshop through another entity so that they deal with the website, customer questions, etc. That leaves me to the things that I’m good at. Their %age of the tuition is well worth having them take some things off my desk. Otherwise, I wouldn’t stand a chance of maximizing on opportunities.