By Deagon B. Willaims
Have you heard about SWOT analysis, but are stuck about how to do one for yourself? A SWOT analysis is really a marketing tool, but can shed light on operations, team performance and other aspects of the business. It is an acronym that stands for Strengths, Weaknesses, Opportunities and Threats. Meant to be used as a grid, it’s intended to push us to think beyond what we already know about a business. Every business has both strengths and weaknesses- this can be a powerful tool to force us to really make note of what works and what doesn’t in our own business.
STRENGTHS:
What are we very good at?
What unique capabilities/resources do we possess?
WEAKNESSES:
Where can we improve?
Where do our competitors do better than us?
OPPORTUNITIES:
What trends may positively impact us?
THREATS:
What trends may negatively impact us?
How may our competitor’s actions impact us?
Let’s go through an example. Say we’re doing a SWOT analysis for a high-end Mexican restaurant in a small town. No burritos or combo plates here, but rather a long list of exclusive tequilas and not commonly known regional food specialties. The price point is around $35-50 a person. They have an experienced chef, but fairly new wait staff. The décor is tasteful and elegant and they have received positive reviews in the town paper. There are three other restaurants in town worth noting for the purpose of this story. One of the restaurants is going out of business, as the owners are retiring, and the building is to be turned into a rental hall. The next one to know about is the high-end French restaurant. Finally, there is also is a casual Mexican Taqueria in town.
If that was all we knew, what would our SWOT look like? Well, let’s see. Strengths: They have a unique restaurant concept, which they have carried out well with menu, bar and decor; experienced chef; good reviews. Weaknesses: They have a fairly new wait staff. Opportunities: The restaurant that is closing and won’t be taken over could drive up business at the other restaurants in town. Threats: There will be competition in the high-end market from the French restaurant, and in the Mexican food market from the Taqueria.
Action Plan: So with a SWOT like that you’d have to come up with an action plan that addressed each issue you uncovered. You’d need to train your wait staff. You’d need to advertise to the regular clientele of the place that closed. You’d need to exploit all the strength of your restaurant concept to differentiate yourself from the French place and the Taqueria in the minds of your target market and convince them that your value add is what they want.
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