SWOT Analysis (Part 3) - Opportunities and Threats

A SWOT analysis is a great tool to help you uncover your strengths and weaknesses as well as opportunities and threats just around the corner. It’s a strategic tool that will help you in both your business and personal life. In a business context, it helps you choose a niche market and differentiate yourself based on your strengths. In a personal context, it helps you clarify what direction you should take your business and how best to utilize your talents and abilities to take advantage of opportunities.

In my last article, I discussed how you can uncover your weaknesses. In this article, I’m going to focus on opportunities and threats. Strengths and weaknesses are internal to your business. Opportunities and threats are external factors.

Opportunities and Threats
Your firm doesn’t exist in a vacuum. There are all sorts of stressors and outside influencers that have impact on how successful you are. When you do a situation analysis, you evaluate the opportunities and threats in the market.

Opportunities

• What opportunities do you see?
• Do you see any interesting trends?

Threats

• What threats are you facing?
• Is your job changing?
• Is demand for your job changing?

Here are some things to look for:

1. Your Allies and Partners - Your allies and partners include everyone with an interest in your success. These include your employees, shareholders and suppliers. Here, you want to look for ways to be more efficient, perhaps by implementing technologies or systems. You also want to look at how strengths and weaknesses can they lead to opportunities and threats?
2. Your Competitors - Your competitors are anyone you might consider a rival. Here, you want to look for opportunities like (a) how can you use your strengths to provide better value (b) can you acquire a competitor’s business. Threats might include (a) advances in technology and the internet that cut out the agent’s role in buying and selling altogether and (b) widely available information that allows home buyers and sellers to complete transactions without agents.
3. The Economy - This involves all the economic factors involved in buying or selling a house. Is it a buyers or a sellers market? What are interest rates like? Does the fate of the economy look uncertain in the near future? Is it nearing a slowdown or recession?
4. Public Opinion - Public opinion involves what the majority of people think about your industry. For instance, are people dissatisfied with your industry? If so, what are the major reasons for it? Who are the business critics? What do the industry watchdogs think?
5. Legal Issues - This involves any pending legislation that might change the industry in the near future. For instance, recently the Department of Justice has filed suit against the National Association of Realtors for Anti-Trust issues involving how they manage real estate listings. There have also been a number of states that are considering imposing minimum service laws that real estate agents must provide their clients.

A SWOT analysis is a balancing act. You are looking for ways to build your business based on your strengths while managing your weaknesses. You also want to keep your eyes open for any opportunities that might pop up while being aware of anything that may threaten the success of your business.