SWOT – Opportunities and Threats
The SWOT analysis is a framework that identifies strengths, weaknesses, opportunities and threats. The framework can be used to decide on strategies that affect a whole business organization to an individual’s personal decisions. It assesses what an organization can or cannot do by looking at internal and external factors based on the four SWOT analysis elements. To discuss two elements – opportunities and threats - of the SWOT analysis a representative and spokesperson for SWOT Compare gave comments. Where do opportunities and threats fall, are they internal or external factors? To this the spokesperson responded that, “opportunities and threats fall into external factors which influence the business; these are all beyond the control of the business.” Please explain these two elements of the SWOT analysis. “Opportunities are positive external factors that reflect the potential of the business and marketing strategy implemented by the business. They open up possibilities for the business to do well and thus flourish. While these opportunities are available the business must take advantage of them, hence the SWOT analysis. By taking advantage of such opportunities it gives the business an advantage over their competitors. Opportunities arise as a result of specific circumstances, for example, a ban on the importing of chicken as a result of government legislation is an opportunity for domestic chicken farmers as this opens up a wider niche for their produce and decreases the competition from foreign competitors.” “Another example is change in customer demand or taste; this can be an opportunity. Where there has been a change in the use of cameras. Initially digital cameras were widely required for a camera, now there is a demand in underwater, ultraviolet, infrared cameras, this can be an opportunity for camera manufacturers to take advantage of such demands and meet them.”
Other factors such as weather and economic conditions can prove to be opportunities; as a result of internal factors. For example where eco-friendly businesses received a reduction in income tax because of their eco-friendly status. “In respect of threats; these are basically factors which put a business marketing strategy in jeopardy. They are not limited to just jeopardizing the business strategies but the entire business too. What makes threats so lethal is the fact that they are dictated by the external environment and thus the business has no control over such factors. For example, an agricultural business is affected by bad weather conditions such as hurricanes, floods and violent storms. Such weather conditions cause destruction on all agricultural businesses in the area. Another example of a threat is where a business that imports goods for some aspect of their overall product are affected by government tax regulations as this impacts directly on the pricing of the business’ product.” Other threats include raising prices by suppliers, bad media coverage on either the business or the industry in which the business is in – for example, where there are reports of some jewelers buying blood diamonds, this can impact negatively on sales for the whole industry. Find a SWOT analysis tool online and make your next business strategy using SWOT analysis.
About the company SWOT compare provides software in respect of SWOT analysis and has business balance scorecard template.
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