SWOT Analysis

Business Plan

Strengths. Weaknesses. Opportunities. Threats.

A SWOT analysis or SWOT matrix, is a structured planning method used to evaluate the strengths, weaknesses, opportunities, and threats involved in a project or in a business venture.

It's also a great way to analyze your direct and indirect competition, and to leverage that analysis in your planning for your business.

SWOT Matrix

How to do a SWOT Analysis

Check out the examples below for how to create a SWOT Matrix.

SWOT Analysis Retail Clothing Business

Helpful

to achieving the objective

Harmful

to achieving the objective

Internal Origin

Strengths

  1. Unique brands protected by sole supply agreements
  2. Successful relationship marketing, and
  3. Innovative sales techniques

Weaknesses

  1. Small store size and inability to find an expansion, resulting in stocking a limited product range
  2. Manager has limited industry experience and industry knowledge

External Origin

Opportunities

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

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
  4. Center owner shifting us within the center

SWOT Analysis Retail Web Business

Helpful

to achieving the objective

Harmful

to achieving the objective

Internal Origin

Strengths

  1. Global reach of business
  2. Low cost to maintain and enhance the site, not restricted by foot print
  3. Stock is recognized brands
  4. Purchase price can be less than off line shops
  5. Strong competition for warehousing and distribution keeps costs down
  6. Easy to remain in touch and build relationships with customers (Email, SMS, e'zine)
  7. Use existing distribution networks (Postage)

Weaknesses

  1. No shop front to accept returns
  2. People need to find our site, there is no other marketing
  3. Lack of shop brand recognition
  4. Hard to scale up to respond to peaks and troughs in demand
  5. Limited financial capital to fund web site optimization
  6. Larger or heavy toys have high delivery cost diminishing the online price advantage.
  7. Low web development skills in house we are reliant on outsourcing

External Origin

Opportunities

  1. Established traffic and high number of repeat customers may enable increased sales through the addition of complimentary product lines
  2. Increased use of the internet for shopping with the 18 to 35 age group suggests that additional sales may come from stocking toys for this age group
  3. Improve organic search ranking to reduce advertising costs

Threats

  1. The internet has no barriers to entry which means a better financed business or an established retail business may seek to compete in this niche.
  2. e'Bay and other online auction sites have traders selling similar products
  3. Buyer reluctance to shop over the net (Diminishing)
  4. Quality issues from overseas suppliers damaging the reputation of brands we sell
  5. Larger business with greater buying power may undercut our prices to gain online market share

Sean Walter's (Class of 2018) Rescue Time SWOT Analysis

Walter's SWOT Example

Develop a SWOT Analysis for Your Competition

It's important to analyze the competition so you can make strategy decisions for you business. It's common for many business leaders to look at their competition from the angle of what their competition is doing wrong, NOT what they're doing right, when in fact, you need to do both.

You need to look at what your competition is doing right so you can do the same equally or better, and you need to look at where you competition is falling short so you can jump on that missed opportunity to fill that need.

Here's what you're going to do: Create a SWOT analysis for your (1) direct competition and (2) indirect competition.

The best method for doing this would be to spend some time in you competitor's establishment, but this may not feasible for you, so you need to spend some quality google time. Obviously your competitor's website will be a huge source of information, but look beyond that for articles or stories in the local news, customer reviews on sites like Yelp or Trip Advisor, and social media engagement.

Download the SWOT Analysis Template

*Please note: You may create your own SWOT design as long as it contains the same Strengths Weaknesses Opportunities Threats matrix.

 

SWOT Analysis for Direct Competition

Identify your direct competition by looking for these key identifiers:

  1. Your competitor offers the same or similar product or service
  2. Your competitor has similar characteristics such as size
  3. Your competitor operates in similar ways, such as, direct to consumer sales or business to business sales
  4. Your competitor has similar capabilities, such as, a limited sales range (local only) or a broad range operation (national)
  5. Your competitor targets the same types of consumers or customers, such as, such as specific demographic or pyschogrpahic populations

 

SWOT Analysis for Indirect Competition

Determining who your indirect competition is requires a little outside-the-box thinking. Many of the same attributes above apply to your indirect competition, but the key is only some of those attributes line up to your business. For example, if you own a specialty Nacho Bar, your indirect competition is a large chain restaurant like RAM which sells only one type of nachos on its appetizer menu and a variety of different foods on its main menu. A grocery store would also be considered an indirect competitor: it sells the ingredients for nachos, but doesn't make them directly.

Identify your indirect competition by looking for these key identifiers:

  1. Your indirect competitor offers a type or parts of the similar product or service
  2. Your indirect competitor might have different characteristics such as size
  3. Your indirect competitor operates differently, such as, direct to consumer sales or business to business sales
  4. Your indirect competitor has larger or smaller capabilities, such as, a limited sales range (local only) or a broad range operation (national)
  5. Your indirect competitor targets some of the same types of consumers or customers, such as, such as specific demographic or pyschogrpahic populations