SWOT Analysis

5. Threats

Threats can be minor or can have the potential to destroy the business.

5.1 Again, changes involving organisations and individuals that directly affect your business can have far-reaching effects. For example:

• Improved competitive products or the emergence of new competitors.
• Loss of a significant customer.
• Creeping over-reliance on one distributor or group of distributors.
• Failure of suppliers to meet quality requirements.
• Price rises from suppliers.
• Key personnel leaving, perhaps with trade secrets.
• Lenders reducing credit lines or increasing charges.
• A rent review threatening to increase costs, or the expiry of a lease.
• Legal action (eg being sued by a customer).

5.2 The broader business environment may alter to your disadvantage. This may be the result of:

• Political, legislative or regulatory change.For example, new regulation increasing your costs or requiring product redesign.
• Economic trends.For example, lower exchange rates reducing your income from overseas.
• Social developments.For example, consumer demands for 'environmentally-friendly' products.
• New technology.For example, technology that makes your products obsolete or gives competitors an advantage.