In: Business and Management

Submitted By lovelu
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A SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis, long used by businesses large and small, is particularly relevant in periods of financial crisis and down economies. SWOT evaluations often provide a snapshot of the "state of a business," and the basis for a "road map" to help management plan future direction. The financial crisis (2007 to 2009) that gripped the world created a climate that made a SWOT analysis even more important.
The financial crisis identified some surprising strengths in many businesses. Down economies reward companies that exhibit creativity, expense control, boldness, fearlessness, and confidence. Companies unafraid to introduce new products, manage (or raise) prices, upgrade customer service, and conserve capital often uncover strengths they didn't realize they possessed. Common strengths that are valuable during a financial crisis include fair prices, quality products, superior customer service, and a brand that consumers trust
SWOT identifies both internal and external weaknesses. Unfortunately, during a financial crisis, internal weaknesses are not only exposed, they are often magnified. Among the most common shortcomings during down economies are marginal customer service, product quality deficiencies, and lack of superior financial controls. Lack of "staying power" has led to the demise of numerous entities during financial crises. Common weaknesses during a financial crisis involves having too much debt and too few cash reserves. However, identifying weaknesses also offers companies the ability to address and correct issues that could pose survival challenges during a financial crisis.
A SWOT analysis points out external opportunities, sometimes hidden, during financial crises. Opportunities to target a different group of customers, sell new products and services, and open new…...

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