What is a SWOT Analysis?
SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats.
And yes, it is exactly as it sounds.
A SWOT analysis is a type of review that companies can perform on themselves to find areas of strength, weakness, opportunities and potential threats. As the saying goes, you are only as strong as your weakest link… and SWOT analysis is one of the best ways that businesses can find those weak links and strengthen them.
Essentially, a SWOT analysis allows companies to get a big picture perspective on their operations and really start fine-tuning some things.
In this blog post, we’ll dig a bit deeper into the SWOT analysis, explain each area of this business development tool, and provide a few important questions to ask when going through each section.
But, before we get in too deep, let’s first determine how logistics and supply chain businesses should tackle the SWOT analysis from the beginning…
Determining the Source of a SWOT Analysis
Before you begin to invest the time and money for completing a SWOT analysis, you should first determine whether you want to take this monumental task on your own or outsource it to a professional third-party logistics company.
There are a few reasons why you might want to undertake your own SWOT.
- You know your company best.
- You can allocate different tasks within the SWOT to stakeholders with specific business knowledge, such as department managers, company leaders, and more.
- Keeping audits in-house provides flexibility to complete as business dictates.
However, there are some additional reasons why outsourcing your logistics SWOT analysis to a professional 3PL is a smart idea as well.
- Allows an overall logistics and supply chain expert and independent third-party provide an unbiased analysis.
- Does not consume the bandwidth of department managers and other key stakeholders, allowing everybody to focus on business.
- Reporting is complete, robust, and completed quickly. This permits you to discover areas of strength, weakness, opportunity and threats sooner, and make adjustments to your business with very little delay.
Breaking Down Your Company Strengths
The strength of any business is a foundation that helps them build upon. There are some strengths that are controllable, and others that are dependent upon outside sources such as fulfillment, freight movement, and customer preferences.
For a logistics business, a few strengths that commonly allow them to accelerate above competitors include their technology, equipment used, providing a niche service or product, their financial resources, or their ability to serve customers.
Discovering Your Company Weaknesses
Arguably the most difficult area for any company to recognize are their weaknesses. It’s difficult for many individuals or organizations to look inward to discover areas where they struggle, or where their business is deficient.
However, in order to improve, it’s crucial to discover where your company struggles. This can be the most important part – and most difficult for a logistics business to handle on their own.
Reviewing Your Supply Chain Business Opportunities
While strengths and weaknesses provide the foundation to make improvements, opportunity is what ultimately allows the company to expand and grow.
For a logistics business, opportunities can range from making improvements to communications platforms with vendors, suppliers, and customers, to upgrading facilities, equipment, or resources to be more efficient or environmentally conscious.
Determine Threats Standing in Your Way
A business threat is one that stands in your way for progress. It can range from financial, structural, competition, or technology. This is typically the most difficult area to discover, simply due to the multiple threats that exist which fall outside of the expertise of the business stakeholders.
Questions to Ask Yourself
If you’re in the process of determining how to complete your SWOT analysis, you should ask a few questions within each segment.
- What areas of your business processes are successful?
- Do you have multiple assets available within the company such as networking, education, skills, or skills?
- What are your physical assets – including customers, technology, cash, equipment, or patents?
- Do you have a competitive advantage over the competition?
- What area of your business requires improvement?
- What resources will help you become more competitive?
- Are there areas within your organization that need to be filled?
- Are there things that your business needs to be competitive?
- What is the condition of your facility? Does it need to be upgraded or relocated?
- What areas in your business if improved will make the best impact, for the optimal return on investment?
- Do you have low hanging fruit or areas that need minor enhancements?
- Are there regulatory issues pending that may improve your business?
- How is your business reputation with customers, vendors, suppliers and other partners – and can you build upon those opportunities?
- Are there new or existing competitors in your segment?
- Can you gather all the resources you need to maintain an efficient supply chain operation?
- Do you have technology restrictions or financial gaps that stand in your way to success?
- Is the market ripe for growth or stagnant?
While the questions above will provide you a general overview of each segment within the SWOT analysis, it takes a seasoned professional to dive deep into your logistics business and industry to truly make an impact.
If you’re thinking about fine-tuning your business operations by having a professional third-party logistics company complete a SWOT analysis for you, contact Redwood Logistics today.