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SWOT Analysis |
Palma Vegh, Signtrade, Queensland |
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Everyone, who is in business knows, that the business world changes all the time. In this "changing world", if a company wants to be successful, it is really important to continually assess its organisational resources and evaluate the environmental risks and opportunities.
Organisational resources include its capability of production, finance, technology and employees. The environmental components are the competitive, political-legal, economic, technological and social-cultural environments. For the assessment of these factors, an important strategic planning tool is SWOT analysis.
SWOT analysis is an acronym for:
- Strengths
- Weaknesses
- Opportunities
- Threats
Strengths and Weaknesses are part of the company's internal environment, while Opportunities and Threats refer to the company's external environment.
This form of analysis will provide your business with a critical view of the company's present position and evaluate its potential.
Strengths/Weaknesses (Internal Environment)
- Competitive advantages: location, product/service lines
- Marketing: market analysis, market position, marketing campaigns, marketing mix ( e.g. prices for services ), value added to services ( e.g. special warranties )
- Human Resources: hiring practices, employee education and experience level, job design, performance review system, quality of work life, teamwork, training and development, wages/benefits
- Finance: ability to raise capital, analysis of finances, efficient use of capital
- Company Culture: vision, policies, management, productivity, creativity, flexibility
- Business Structure: business objectives, business strategies, decision-making, communication
- Operations: service, production systems (quality, productivity, capability), customer service, labour costs
- Information Technology: effective use of computerised systems, database management, website
- Strategies: growth strategies, direction (mission statement)
Opportunities/Threats (External Environment)
- Competition
- Customer loyalty
- Education of the workforce
- Expansion opportunities
- New markets
- Costs
- Supplier relationships
- Technology developments
- Market demographics
- Material resources (e.g. land)
- Political climate/forces (e.g. laws)
To carry out SWOT analysis for your sign shop, you can start doing it by answering questions like:
Strengths
- What advantages does my business have compared to competitors? E.g.
- My sign shop is in a prime position on a very busy road.
- My prices for the services are lower than the competitors' prices.
- My employees are highly experienced.
- We have got a website, while our competitors don't have one.
- What do we do well?
Weaknesses
- What could be improved? E.g.
- We should run more marketing campaigns.
- We could improve our communication within the business by organising team meetings every Monday morning.
- What is done badly?
Opportunities
- Will legislation changes create opportunities for our sign shop?
- The new legislation allows businesses to display two A-frame signs outside their business, instead of one.
- Is there a change in client needs?
- Are there any new and interesting trends?
- Are there any local events coming up?
- How is the population changing in the area?
Threats
- What is our competition doing?
- The sign shop in the next suburb is advertising on radio.
- Is the changing technology threatening our business?
- What obstacles do we face?
Once you finished with the SWOT analysis, the appropriate strategy has to be implemented so your business can build on its strength, correct weaknesses, utilise opportunities and protect against threats.
The SWOT analysis is complex, an overall view, and the evaluation of both internal and external factors has to be completed. But if your business wants to achieve its overall goals and objectives, this "effort" needs to be made. Because only in this way can your business decide about the best strategy.
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