The current economic crisis actually does provide many opportunities and many creative entrepreneurs have seen them. What is very important as one moves into a reshaped business environment, however, is a detailed strategic plan on the way forward. This is important as one needs to assess the health of the business, within a changing economic environment, and more importantly to determine what return one can expect on capital invested.
It is therefore that one of the things that companies need to focus on is a very detailed strategic planning session, which should be carried  out at least once per year but preferably one should have planning sessions two to four times per year. The value of this type of planning is that it allows the business to check its progress against stated objectives and to determine if the environment is making the original objectives no longer viable.
A significant part of any planning session is a SWOT analysis. SWOT simply stands for strengths, weaknesses, opportunities, and threats. In setting out this simple quadrant one can do a complete assessment of the health and opportunities of the business and its environment.
- Strengths – this looks at what are the advantages the company has over its competition and with the market. In order to be viable in the first place every company needs to have valuable comparative advantages, which can change over time. By looking at the strengths one wants to make a determination of what are the areas that the company has a comparative advantage in.
- Weaknesses – the planning session should look at the weaknesses the company has. Weaknesses can either be improved or cannot be improved. In the case of those weaknesses that a company can improve one should develop a plan of action, after determining the value of correcting the weakness. Where the weakness cannot be adjusted one could look at compensating action to prevent the weakness negatively affecting the company.
- Opportunities – this relates to the areas where the companies can actually improve and grow. These are not always viable and analysis needs to be done to ensure that any available opportunities are worth pursuing.
- Threats – the planning session would want to make an assessment of what the threats are to the company’s viability or its comparative advantages. This would lead to an action plan to protect against the threats would could include stepped up controls, increased skills levels, marketing campaign etc.
The SWOT analysis is an important tool to be used in the strategic session and from it one can derive an action plan that will guide the development of the company. As always its is important to get professional help to assist with this so that objectivity and correct measurement will result.
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