The Threat

The Threat

Strength Weakness Opportunity Threat

Note: This is week #4 in a series of five weeks that reviews SWOT analysis and how it can be a useful tool for you to help both you and your clients understand their business. Keep in mind, SWOT cannot and should not replace the initial client needs analysis. A needs analysis helps you and your client understand IF there is a need that you can provide a solution for. Once it has been determined if the need to work together exists, only then can SWOT can help you and your client understand where their business is today and where it could be in the future.

Threats are also “external” factors. Similar to opportunities, threats cannot be controlled by a business as they are dictated by conditions which change within the market. Threats are forecasted environmental condition that have the potential to harm your client’s businesses profitability so it’s crucial that they are identified and closely monitored!

When creating a list of threats, make sure to review what you and your clients perceive as their competitor’s strengths. More often than not, the two are exceedingly intertwined. Also, any moves that a competitor may make within the marketplace as a show of strength may necessitate a reaction from your client – which in many cases produces a threat as a byproduct. For example, if a competitor lowers their prices on a product (the competitors strength is their ability to sell a product with a slim profit margin) and your client reacts by being forced to reduce the price of their product, the result is that your client may know be selling an unprofitable product – which in itself is the threat.

Once again, using that “typical newspaper retail client” as our SWOT subject, here’s an example of a likely list of threats that would be effective in creating a SWOT analysis with your client:  (Note: I’m including the “external factor” that is causing the threat to exist)

–        A new competitor has entered the market = The possibility for diluted market share

–         An existing competitor are engaging in a price war = The possibility for reduced revenues

–        A competitor has launched a new product that we cannot offer = The possibility for losing existing core customers

–        Government regulations have imposed a taxation on your product = The possibility for reduced profits

–        The needs of existing customers have changed = The possibility of becoming irrelevant

We have now helped our client create a list of Strengths and Weaknesses (internal factors) along withOpportunities and Threats (external factors) taking into consideration how they directly relate to their competitors. Next week we’ll tie everything together and I’ll explain how you can leverage this highly coveted strategic business information and use it to develop a marketing proposal for your clients. Just having the chance to sit down with your client and have an open discussion about their business in this fashion illustrates how much faith and confidence they have in your ability to be a trusted business advisor. They’ve opened the door for you…it’s your time to capitalize on this opportunity and showcase your talents as a professional salesperson!

Have a terrific week,

If there are specific topics you’d like to see discussed in a future issue of The Sales Cycle, please contact me at 612-278-0223 or