Organizations go out of business every day because they fail to recognize when they are in trouble or neglect to take actions that may allow them to survive. Whether it is an increased level of competition, a rapid or gradual decline in customer service or some other indicator, the lament is all too often, “We never saw it coming.” While that may be true, there is no excuse for an owner to be taken by surprise.
The beginning of the year is a great time for an organization to conduct a SWOTT (Strengths, Weaknesses, Opportunities, Threats and Trends) analysis. This means examining these aspects of your company and taking action accordingly in order to ensure success. Organizations today face increasing levels of local and global competition, and a successful past doesn’t guarantee a successful future.
Begin by reviewing the following:
Strengths: Research what separates your organization from its competition. What do you do well? Do you provide great customer service? Are you the only dominant player in town? Does your company have a solid reputation for service and follow-up?
Weaknesses: Research your company’s limitations. Are long-term customers going elsewhere, and if so, why? Is customer service slipping? Does the organization have a limited market niche, limited product offerings or under-delivery? Does your company lack the flexibility to make timely market changes?
Opportunities: What new opportunities are present for your organization? Are you the only organization in town that provides a particular product or service on which you can capitalize? Is there a new area of town that needs your product, yet this need isn’t being met?
Threats: Are new organizations likely to enter the market and take away part of your customer base because you are unable to meet business demands? Are your products becoming dated and less desirable, but you have nothing with which to replace them? Are your organization’s reputation, service level or price competitiveness suffering and, as a result, costing you business?
Trends: Look toward the future. Are newer and more effective products or services becoming available? Are your services and products becoming obsolete due to a decrease in demand? Is the population base shifting to areas you do not currently service?
Organizations need to recognize that business as usual is a likely recipe for failure. For example, Kodak failed to recognize the move to digital photography until a significant segment of its customer base went elsewhere. Sears, now owned by Kmart, was slow to recognize the impact of e-commerce and continued to print and distribute thousands of catalogs long after the catalog market became a producer of huge losses for the organization.
While many new businesses seem to succeed, most fail in the first five years. SWOTT analysis should be performed on a regular basis, in an environment in which members of the organization can take an honest, serious look at their strengths and weaknesses. SWOTT analysis can provide the company’s leadership with a defined focus of what needs to be addressed in order to keep their organization growing, prosperous and competitive.