SWOTT Analysis

A SWOTT (Strengths, Weaknesses, Opportunities, Threats and Trends) Analysis is a careful look at your company for the purposes of improving and protecting it.

Strengths: You companies strengths might be captured skills, expertise, great location or high cost to enter your market limiting entry of competitors for example.  It could also include the good things about being in the industry you are in such as growing market, few competitors, or unique products or services that are difficult or impossible duplicate.

Weaknesses: Could be the opposite of any of the above. It could be employees lacking proper training or supervision, or old or out of date equipment.

Opportunities: Opportunities might include a competitor going out of business, new territory opening up, favorable market conditions, or is there new uses for your product or service or a related product of service you can develop. Most important is there a want or need you recognize in your customers which you can meet.

Threats: Threats may be economic conditions, regulatory changes, shortness of raw materials or skilled labor, or a new competitor.

Trends: What is happening or likely to happen in the future that may impact your business? Is your product becoming obsolete? Are there local conditions that can allow you to expand or should you contract? This can be the hardest of the five lists you will make because it means looking at things that have not happened yet. It also might involve challenging ideas on which you built the business. In the housing industry we built homes at a record pace for many years using principles we all knew from long experience were sound. We purchased land to provide a three to five year cushion of future lots.  Almost no one in the industry saw the financial crisis that made the three to five year supply of raw land become decades of supply.

When you have made your list in each category you can built on the strengths, shore up the weaknesses, put yourself in a position to take advantages of the opportunities, and defend yourself against the threats.

You should repeat the SWOTT analysis on a regular basis and get input from key employees and advisors such as your accountant.  It is tough to be honest with yourself and challenge the beliefs you used to build and grow your company.

Original content (c) Thomas Robinson