Therefore, reducing costs is the only way to do this for anyone in a competitive market. This can be done by:
- Eliminating waste;
- Streamlining operations, processes, supply chains and logistics routes;
- Investing in new, more efficient technologies; and
- Investing in training.
Remember, only one company can have the lowest price in the market, which often does not mean they have the best profitability or cash-flow.
SWOT can help uncover opportunities an organisation is well placed to take advantage of. Understanding the weaknesses of a business can help manage and eliminate threats that would otherwise keep a business unaware.
More than this, a business can begin to develop a strategy that helps it distinguish itself from its competitors and compete successfully in the market.
The acronym SWOT stands for:
- Strengths of the Organisation;
- Weaknesses of the Organisation;
- Opportunities for the Organisation; and
- Threats to the Organisation.
Strengths
Strengths answer the following question:
- What advantages does the company have?
- What do they do better than anyone else?
- What unique or lowest-cost resources do they have access to?
- What do people in the market see as its strengths?
Consider this from an internal perspective and the point of view of customers and people in the market.
Realistically, it’s far too easy to fall prey to not invented here syndrome. Also, if the company struggles with this, it is best to list its characteristics. Some of these will hopefully be strengths!
A company must evaluate its strengths in comparison to those of its rivals. If every rival offers superior items, having a superior production method will not confer any competitive advantage.