STRENGTH,

WEAKNESSES,
OPPORTUNITIES
AND THREATS
(SWOT)
- SWOTANALYSIS is an entrepreneurial tool in
determining the profitability of the business
operation. Opportunities carries with it some
risk involved and this should be looked into
carefully. The strengths and weaknesses are
internal factors to the entrepreneur while the
opportunities and threats are external factory.
The entrepreneur must look at how strong
he is to combat the weaknesses on his side
and this needs strong determination to
succeed with caution. He may need long
working hours and advance thinking to
overcome the possible threats. Planning
and environmental analysis is needed to
keep opportunities moving to his side of
profitability. Investment in money and
The product must be evaluated
along the following areas:
1. Product Strength in the Market must have
the following:

a. Available Technology in Product

Processing - Technology is an important
component in producing the product as
economies of scales determines the price
index.

b.The Source of Raw Materials must be

c. Skilled Workers must be Available -
Technology must have the component of skilled
workers that shall operates the machineries and
other equipment.

d. Capital Investment in Machinery and

Operating Expenditures - A starting venture may
have little investment in terms of machinery and
equipment but starting with small capital should
generate operation.
2. Characteristics of weak Products and
Weak Management:

a. Poor Quality and High Price - The

entrepreneur should not launch a poor product
in the market as it will surely fail to advance in
the sales and profit.

b. Product Design and Appeal - Product

design should appeal to customers demand
Poor design of the product is the making of
c. Production cost - Production cost is the
price determinant. Entrepreneurs cannot
make maximum profitability on products
whose production cost cannot survive
market competition.

d. Supply and Demand - Intermittent

supply to the market will make customers
shift to other products. The supply chain
management must be put in place to make
e. Weak Product Management - Weak
management is created when people at the top
of the organization fail to sustain a vigorous
effort for expansion and growth when
management sets on his initials laurels and
ventured on vices and other extra activities that
will lose his total investment. Some people,
who acquire money, became too complement
and forgot all about expanding there by
competition gets them out of the market place.
3. Sustainable Product Opportunities in the
Market:

a. Product Demand - Product demand is the

greatest opportunity of a entrepreneur. Demand is
the essence of profit and this must be sustained
by the entrepreneur before wide competition
appeared in the market place.

b. Presence of Poor Quality in the Market - The

presence of poor quality product in the market
c. Government Policies and Support - The
government support to local entrepreneur is
an opportunity for greater expansion. The
government should support the local
entrepreneur in terms of taxes and
government.

d. Liberal Credit Terms and Interest Rates -

liberal credit terms by banks and other
government institutions will generate
4. Treats to Product profitability and
Market expansion:

a. Entrance of Competition - The

entrance of many competitors in the
market place will definitely give problem
to entrepreneurs. Competition will reduce
profitability as the price has to be
competitive with those in the market.
b. The supply of raw materials will be
limited as others competitors will be getting
the same suppliers - As demand for raw
materials become competitive in prices,
production inputs go higher and this will affect
product pricing. Increased production cost
means changes in product price.

c. The emergence of Left-wing Labor unions

- Many companies close shops with the
d. The presence of Double Taxation -
The government already imposed a lot of
taxes to the entrepreneur. Honest
businessman could not profit in their
operations as there are lots of taxes that
the government would like to collect.
e. Peace and Order in the Area of
Business Operation - Peace and order
are components of business growth.
f. The Cost of Power Supply - Cost
production increases with the cost of
utilities like current and water. The
government private partnership in the
operation of power and water utilities has
increased the cost of power by about 400
percent.