SWOT Analysis

6. Action

The results of SWOT analysis - and the action needed - will be different for every business.

6.1 Capitalise on opportunities that play to your strengths.

Opportunities that match your strengths may prompt you to pursue a strategy of aggressive expansion. The SWOT analysis may also suggest other strategic options. For example:

• Diversifying away from areas of significant threat to more promising opportunities.
• Focusing on turning around weaknesses in areas of significant opportunity (see 6.2).
• Taking defensive measures in areas of threat where you are weak (see 6.3).

6.2 Address your weaknesses.

• Decide which weaknesses need to be addressed as a priority.Other weaknesses must be acknowledged and respected until time and resources allow a solution.
• Some weaknesses can be turned into strengths or opportunities.For example, it might be possible to turn a shortage of production capacity into scarcity value for your product.
• Some weaknesses have a clear solution.For example, financial weakness might be solved by raising further funds, and management shortcomings by recruiting new personnel.
• Some weaknesses will take time and money to address.For example, you may need to start a programme of improvements through training, or quality management.

6.3 Protect yourself against threats. For example:

• Build relationships with suppliers and customers.
• Foster good employee relations.
• Ensure you have clear and reasonable contracts with suppliers, customers and employees.
• Take out insurance cover against obvious potential disasters.
• Draw up realistic contingency plans to cope with potential crises.
• Introduce the right types of service contracts for key personnel.
• Invest in legal protection for your intellectual property.
• Take advantage of low fixed interest rates to move your overdraft to long-term loans.