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Part III: Sizing Up Your Current Situation

Your Operating Environment Your Industry Your Market


Ecological and Power natural issues suppliers or Current vendors markets Economic indicators

Your Organization

New markets Market size

Power of buyers

Global forces

Customers Current competitors Growing or declining New competitors

Substitute products Social and cultural shifts Competitive rivalry Technology trends

Figure 9-1: A view of your environment.

Demographic movements Political winds

Some external influences or factors have more direct impact on your business than others. Others just take a little longer to get there. By looking at your landscape in four areas, you wont miss anything that might be hiding on the horizon. The success or failure of your organization depends not only on your internal capabilities and resources (strengths and weaknesses, discussed in Chapter 7), but also on things that happen outside of your control (opportunities and threats). All of the information in this chapter helps you identify the forces, issues, trends, and events that can positively or negatively impact your business. What possibilities do you see on the horizon and where are the minefields? In this chapter, you identify potential opportunities and threats that may impact on your business. You discover some of the larger trends likely to impact all businesses over the next ten years as well as how to spot the ones not covered. Lastly, you bring all the pieces of your SWOT together to create a complete picture of your companys strategic position.

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Part III: Sizing Up Your Current Situation


When will this trend impact our company... ? Increasing price of oil Shrinking middle class Potential for more natural disasters Declining birth rate Customers demanding more customization Independence of employees (working from home, changing jobs, etc.) Growth of all products related to improving physical appearance Use of the Internet to streamline business processes Growth of robot and automated technologies Growth of open source software Changing healthcare policies Increased security and terrorism Labor shortage and outsourcing Graying of America Increasing diversity Increasing economic achievement of women Growth of China as a major economic force Shortage of raw materials, creation of new ones Increasing population Growth of environmental sustainability Now

1-3 years

5-10 years

Never

Opportunity or Threat

Figure 9-3: The opportunities or threats in your operating environment.

Dont forget to ask for help getting objective input from others helps you see parts you may have missed. The section Finishing Your SWOT Analysis later in this chapter gives you ideas about how to proceed, too. Additionally, use Figure 9-4 to spark some ideas.
When will this force impact our company? Now
1-3 years 5-10 years Never Opportunity or Threat

Figure 9-4: The opportunities or threats in your industry.

Increase in the number of competitors Potential for substitute products Increase in the power of our suppliers or vendors Increase in the power of our buyers or customers Greater intensity of rivalry between us and our competitors

To capture all your thoughts and keep them in order, create a note page with a line horizontally in the middle. Label the top section Opportunities and the bottom section Threats. Jot down thoughts about a new market under the opportunities section and ideas on a competitors action under Threats. (I use this same notation in other chapters when referring to notes.)