For strategic planning and development, a business analyses its strengths, weaknesses, opportunities and threats known as, "SWOT." A business developing a plan to increase its customers may need to prepare for upcoming changes to legislation such as changes to taxes or pricing that could threaten sales. Similarly, other threats could result from environmental changes, seasonal products, changes in policy of staff retention and major competitors.
Identify the Threat
Before a threat can be overcome, it has to be identified as an external or internal threat. External threats involve demographic and economic factors as well as issues of changes in technology and social, cultural and political factors stemming from outside of the business. Internal factors involve activities within the firm itself such as products to be discontinued, training on new systems, or the impact of a loss of a major contract.
Assess the Position
Once the threat has been identified, the next step is to assess how informed and prepared the business is to be able to overcome the threat by analysing its political, economical, social and technological impacts on the growth of the market and the business. If the analysis determines that the threat is serious, it requires action. Alternatively, it may be determined that it is safe enough to be ignored.
Identify the Resources
Developing a plan to overcome threats requires both tangible and intangible resources. Tangible resources are financial resources and physical assets that are identified as value in a business' financial statements. Intangible resources are not as obvious as tangible assets because they are not visible but often contribute as a competitive advantage such as image, the business' technology, and human resources skills. Identifying resources determines how capable a business is to handle the threat.
Implement a Plan
Depending on how critical the threat is and how well prepared a business is will ease the ability to implement a plan to overcome threats to a business. A well prepared business with a good reputation, a strong brand name, and distribution advantages may be able to use its strengths to turn the threat into an opportunity thereby reducing the business' vulnerability. A weak business with a high cost structure, for example, may face external challenges before being able to implement a plan.
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