SWOT Analysis - A Basic Understanding

05/08/2025

Strengths and Opportunities

Each individual company has unique strengths and has the ability to take advantage of opportunities in different ways.

Strengths are those qualities and abilities that make you who you are. Think of them as the bedrock on which to build. They are the things that no one else has and are the tools of leverage for your future.

Some strengths are:

  • Patented products or technology
  • Unique products or technology
  • Manufacturing capabilities
  • Company finances
  • Company name or brand
  • Company purpose and values
  • Cost structures
  • Your people
  • Ability to leverage customers

Strengths are manageable by you. Consider them as assets. And realize that asset values can change if not managed properly. Think of it like Superman. He had certain qualities within him that were different that other men. But there’s was Kryptonite that could be used to take all of those powers away.

Opportunities are those customers, industries and markets that give you the ability to grow your business, to increase sales and profit, to make you a leader.

Some opportunities are:

  • Lack of competition
  • Weak competition
  • Costs of entry into market
  • Size of market — big or small
  • Growing market
  • Shrinking market
  • New market
  • Changes and shifts in market

Strength without an opportunity is of little value. Any sort of change in the markets you serve can be an opportunity if you are prepared and have a decent understanding of what those opportunities are. But opportunities can be outside of your control. They can be turned into threats if not watched carefully. The optimal situation is that you are able to take your strengths to the market and create your own opportunities to bring in more sales and more profit.

Threats and Weaknesses

Threats and weaknesses can come in many different forms. They are issues that have the ability to threaten your business, to impact your sales and profits, to change the marketplace in which you compete, to either put you at a disadvantage or to put you out of business.

Weaknesses are the internal threats, those issues that are generally contained within the company, such as

  • your own aging workforce
  • aging equipment
  • too low inventory when you expect an increase in business
  • shortage of cash
  • loans that may be coming due
  • problems within the company that are left unresolved
  • indecision
  • lack of planning
  • affects of selling the company
  • family member owners disagreeing

And threats are external, ranging from your industry to the market as a whole, such as

  • new competitor
  • existing competitor getting bigger
  • change in regulation affecting your products
  • economic recession
  • rising interest rates
  • global parts shortages

Weaknesses are the most manageable as you have some ability to control the problem and the ability to create a solution.

External threats are the least manageable as the problem is outside of your control. The best way to deal with external threats is the ability to control your response and your ability to adapt to a changing environment.

Originally published in Medium - May 11, 2021