Sunday 21 August 2011

Critical Small Business SWOT Analysis Example

Here is a SWOT analysis | TOWS Analysis example based on an exercise i had to do recently. A SWOT analysis examines the Strengths (S), Weaknesses (W), Opportunities (O) and Threats (T) of a perspective of one thing, be it a company, a product, a proposition, and idea, a method, or option , etc.
SWOT Analysis In this example, it was a proposition to enter a new market for a small software company That Had been producing it's own sophisticated decision support and productivity software for Nearly 25 years. SWOT Tells you what is good and bad about a business or a particular proposition. Once you have worked out the SWOT analysis you can then respond by creating goals and strategies by
  • Maintaining, building on and leveraging your Strengths
  • Prioritising and optimising you Opportunities
  • Fixing or exiting from your Weaknesses
  • Countering your Threats

When doing a SWOT it is good to keep your answers short, simple, specific, and realistic. So let's get started and remember to keep foucusing on the proposition ...
The propostion was to resell an exciting new business intelligence (BI) product for example like Tableau the which overcomes many of the limitations of the existing BI products - Difficult to use, costly, and slow to implement and change.
 

Many resellers have Their own software product or service existing client base on to the which They can build sales of the product resold ... adding value if They can with consultancy and training.
This company also has the problem That come three to five years now Their main product Potentially Will be displaced by new technology. They need a replacement product lines Quickly. Their current market is 'slow' with a sales life cycle of 18 months to two years.
They are also based in a rural setting with large and medium sized Few Organisations around, but They Make the maximum use of the Internet to service current national and worldwide customer base.
So here we go with this SWOT Analysis example.
 


Strengths
  • Good with databases and analysis
  • Experience of selling overseas
  • Interested and passionate about data analysis and trending 
  • Good balance sheet
  • Reselling a product is quick - no product development required.

Weaknesses
  • Currently have a small customer base with Few customers with time to Analyse Their data
  • No other vertical markets - would need to find one!
  • Only receive a percentage of sale - question about potential profitability
  • Lots of potential competition - from established products ... 'We already have one of Those thanks'
  • Need 'good paying customers to Prevent cashflow issue - having pay software vendors before the client has paid.
  • Credibility with large corporations or Organisations - little direct experience of the big BI projects

Opportunities
  • Create an 'Add On' to Existing Products or Services
  • BI software is a growing market
  • Use the product to find new application areas for area company
  • Use the product to find new vertical market for a new product base.
  • Offer Consultancy and Training
  • Initial cost of sale recovered over time by Further sales of the product to the same account.
  • Current trends in industry and commerce to Reduced costs - great need for data analysis

Threats
  • Vendors selling policy changes and drops resellers
  • Bad product release product spoils the image ... and effects the ability to sell
  • Company is drawn resources away from current high value added (high profitability) activities to this lower value added (low profitability) activity.
  • Competing with vendors own sales teams and other more local resellers

So what They Should aim of adopting the strategy in this SWOT analysis example.
  1. They Should Focus Their Efforts on departments of large and medium-sized Organisations companies to maximise the long term 'add on' or repeat sales as the product use within Their customer spreads Organisation over time. This type of customer is also more Likely to buy the most expensive (higher profit) product resellers eg Server software rather than desktop software. Should targeting this market segment also minimize payment issues and protect cash flow. Also it minimises the drift to the low profitability work.
  2. They need to build Their competence and credibility Quickly eg offering technical newsletters or bulletins, and try to distinguish themselves with highly responsive technical support. They need a competitive advantage over other resellers and the main vendors. 
  3. Offer existing customers a service e.g. Benchmarking - do Their analysis for Them
  4. As the software vendor is not in Their time-zone, They need to take advantage of this 'local' advantage
  5. Should They move fast and to invest to gain a good customer base before other resellers enter the market 
  6. They Should try to find customers for the product / services in the industry, They are in now and in related industries. This would build on Their current knowledge (strength) of Their current experience
  7. Should They focus on high value added activities Such as training courses and consultancy
  8. They Should Consider adding a second BI product to Their portfolio or developing Their own BI product in the medium to long run to guard against a vendor policy change or a bad product release
This concludes this example SWOT analysis. I hope you found it of interest.

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