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SWOT Analysis + PO

A SWOT analysis offers you an overview of a small company´s state of affairs at a given time.

Having evaluated and recognised your company´s state of affairs, you are in a better position to work out a strategy for your future business operations.

A SWOT can also be used to evaluate other things than a private company. It could e.g. help you evaluate a new product or a marketing campaign.

SWOT + PO

This SWOT analysis is expanded to include PO (Possibilities & Obstacles).
This is done in order to qualify the issues in the OT (Opportunities, Threats) and it may point to issues in the strategy.

It works like this

The SWOT + PO analysis is structured as shown below:

The company´s internal capabilities (Strengths & Weaknesses)
External parameters affecting the company (Opportunities & Threats)
Qualifying the Opportunities & Threats with Possibilities & Obstacles

INTERNAL - within the business’ reach
STRENGTHS	WEAKNESSES
Strengths are what your company is good at at present. It is a snap photo of the present situation. Such as: Personal competencies, core area knowledge, family support, good reputation, well-situated premises, sound economy, good relationship with the bank, special organisation, cooperation partners, business concept, high turnover, high gross profit, alternative products/services, novel products, advanced technology, unique marketing....	Weaknesses could be something your company does not have at the moment or is less good at compared to your competitors. Such as: Personal qualities, lack of core area knowledge, family doesn’t support, bad reputation, adverse location, bad economy, sceptical banker, special organisation, cooperation partners, business concept, proceeds, turnover, alternative products/services, outdated products, obsolete technology, no marketing..
EXTERNAL – outside the business’s reach
OPPORTUNITIES	THREATS
Opportunities in the market can be seized or missed. You cannot change them, you have to adapt to them. Such as: New customer groups move to your area, increased purchasing power, high birth rates, expansion of public institutions, new trends, advanced technology, dying competition, capital infusion, timing, network, grants/ subsidies, supplier´s credit, swift market penetration, new legislation, Asian progress	Threats are external parameters threatening your company´s business strengths. Such as: Customers moving or go bankrupt, weakened purchasing power, low birth rates, building freeze, new trends, new technologies, new competition, timing, networks disintegrate, grants/ subsidies, supplier restrictions, new legislation, a country goes bankrupt..

+ PO

Go back and look at your OT (Opportunities and Threats). You have probably mixed the external opportunities and threats with possibilities and obstacles (PO) within the company.

Move all issues that the company can have influence on from Opportunities to Possibilities
Move all issues that the company can have influence on from Threat to Obstacles

You will now be able to focus on the external OT issues that you have no influence on.

The PO might point out some of the issues your company could work on to overcome some of the challenges.

INTERNAL - within the business’ reach
POSSIBILITIES	OBSTACLES
Possibilities are what the company could be good at if plans and hard work turned out right. Such as: Become the chairman of the local football club, your daughter steps into the company, you persuade the shop owner across the street that you can take over the lease or you finally make your invention work, you get an article in the perfect industry magazine ….	Obstacles are what could happen if things don’t turn out as you expect and planned. Such as: You fail your exam, don’t manage to make your obsolete machine work, you don’t have time enough to work hard in your company, old debt suddenly has to be paid, you have to leave the country ….

How to use SWOT + PO

The SWOT + PO analysis is a tool allowing you to evaluate your company and may give you the possibility to see directions for your company´s future.

The most important questions that the SWOT analysis sheds light on:

Does the company have core areas to base a strategy on?
Does the company have weaknesses that make it vulnerable and are there means to cure this?
What market opportunities does your company have with its present knowledge and resources? (Opportunities not backed by resources are mere illusions)
What external threats must the company be aware of?

Strategy

Opportunities and Threats affect your company´s rate of activity.
Thus, a strategy must include the below features:

Focused on market opportunities using your company´s strength
Be a defence against external threats

Core business

The secret of all strategic planning is the ability to boil down your company´s strengths of management, services/products, marketing, development, etc. to your company´s core business. The core business is the specific variation of your product or service that makes it unique compared to other similar products.

The core business of www.dynamicbusinessplan.com is to “Deliver business essentials for entrepreneurs”

Core Competence

Core competence is the features that make your company differ from your competitors.
Often, the core competence is to be found in a person possessing, great trade skills or specialised manufacturing know-how within an area.

Only rarely does core competence derive from a physical object.
There are many features of core competence: