In business as in life there are many tools that help us grow and move forward. Unfortunately, we often use them once then put the results on the shelf and rarely use them again. Please don’t do that with a SWOT. This tool, when used correctly can give great insight to areas that are doing well today as well as areas that may need adjusting.
The strength and weakness list is a deep dive into who the company is and what factors need to be addressed. It is best used with key staff members, or project leaders, or any others that can offer insight into not only where you are but how you can capitalize on it to find opportunities.
SWOT Framework Basics
- Strengths – Internal capabilities/resources that give you an advantage.
- Weaknesses – Internal limitations that may hinder success.
- Opportunities – External conditions you can leverage to grow or improve.
- Threats – External factors that could cause problems, reduce success, or create risk.
Definition of Threats (Current View)
Threats are external, largely uncontrollable factors in the environment that could harm your business or initiative. They’re things you can’t stop from existing, but you can prepare for and adapt to them.
Examples:
- New regulations that increase costs (Legal/Political).
- An economic downturn (Economic).
- Disruptive technology (Technological).
- Shifts in consumer behavior or social values (Sociological).
- Supply chain disruptions or natural disasters (Environmental).
Where PESTEL Fits In
What you learned (political, environmental, sociological, technical, legal) is actually the PESTEL framework, which is often used to analyze external environment factors in detail. Many strategists use PESTEL as an input to SWOT, especially for identifying threats and opportunities.
- Opportunities + Threats often come from PESTEL analysis.
- Strengths + Weaknesses come from internal assessment.
Now What? Threats = external, uncontrollable risks — but now people often emphasize using structured scans like PESTEL to identify them more systematically. If threats just are, do we ignore them until we can’t or do we use them to play to our strengths and figure out new approaches. Often it takes research as well as creativity to find new approaches. It also relies on the vision for the next 3 years.
Let’s look at some examples of how to use threats to your advantage.
- We’ve all experienced voice mail hell and the technology that is used. Now many are using AI agents to screen incoming calls. Is it effective? Sometimes, but often not. the one Verizon uses is terrible. what opportunity is there for you? Can you design a new way to answer and forward calls giving the caller a better experience
- The economy is going bonkers people are buying less or shopping for bargains what can you do to keep customers and maintain profit margins? Have you considered loyalty programs where customers get points for things they buy that they can use for more product. Similar to what credit cards do but with better more immediate returns
- What impact has the environment had on your business? Pal fire protection created a green fire retardant and sprays for your roof, that are safe for pets, people and the environment yet stop fire destruction.
- Customers are seeking alternatives to your product. Find a new market.
It’s up to you. worry about threats or find new opportunities
This shows clearly that political, economic, sociological, technological, environmental, and legal forces can create either opportunities or threats, depending on how they affect your organization
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