Threats: Obstacles That Can Trip Up Your Business
A threat to your business is typically external. Threats are one of four parts to a SWOT analysis; the others are strengths, weaknesses and opportunities. What are your threats? They might include your peer companies’ relative strength, an industry-wide shortage of materials needed to make your products or a sluggish economy.
Unlike identifying weaknesses, which are hard to self-identify objectively, you only need to look around your world and communicate with peers and customers to recognize your threats. They can include:
- Weather. These affect seasonal businesses that depend on good conditions.
- The economy. If you sell something consumers need in any economy, you will fare better than others.
- Material shortage. Tensions in an oil-producing country result in big price hikes, raising production costs for plastics manufacturers, trucking firms and others.
- Your computer system is hacked. This can knock your website out for days during a crucial selling period.
- Employment in your industry is strong. This can make it hard to find skilled workers.
- Market demand dries up. Think Blockbuster falling behind Netflix because of its late start streaming content.
Your company should address threats to create opportunities, while they will have to work around other events they cannot change.