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Your restaurant may serve the most delicious food or provide the best table service in your area.

But if you do not


know the strengths and weaknesses of your business or the opportunities and threats facing your business, your
business may suffer. As you prepare to perform your SWOT analysis, invite your restaurant manager as well as
your chef and assistant managers to get involved so you gain more insight from different points of view.

Analysis of Strengths
The strengths of your restaurant lie in what you do best, whether it’s serving tasty food, offering quality service at the
table or providing decor that makes the fun of eating at your restaurant a memorable experience. Other strengths
may consist of your pricing structure, such as offering a lower-priced menu than similar restaurants in your area.

If you currently generate traffic during slow times by offering special promotions, such as “buy two meals, get one
free before 5 p.m.” to get patrons in the door, that’s a strength. Other strengths may include serving a specific type
of ethnic food not served elsewhere in the area.

Analysis of Weaknesses
Weaknesses give you an idea of things to improve in your restaurant. For instance, your wait staff may create a
weakness for your restaurant, since you’re dependent on them for the personal service they provide to each table.
Another weakness may exist if you do not provide adequate employee training, such as showing wait staff how they
should attend to tables or explaining to culinary personnel how you want food prepared and presented.
Other weaknesses may include not getting consistent supplies that result in menu items not being available. Relying
on an outdated point-of-sale system or using paper to keep track of ordering and stocking is a weakness, because
there are better ways of calculating your stockroom, order and financial needs.
Analysis of Opportunities
Look for opportunities that help your restaurant increase its profits, such as expanding or providing different types of
food and beverages. Taking advantage of trends related to eating healthier may mean featuring more organic
dishes or salads on your menu. Finding ways to generate more traffic during slow times, such as in the afternoon,
may represent an opportunity for growth.
Selling some of your restaurant products, such as salad dressings or baked goods, for people to buy and take home
represents an opportunity. Offering delivery services and take-out or setting up a drive-through to meet the needs of
people on the go represents another potential opportunity.

Analysis of Threats
Competing restaurants located nearby represent a threat to your business, especially if you sell similar types of food
or have similar dining experiences. New restaurants opening up in your area also represent a threat, since area
diners have more options on where to spend their dining dollars.
Other threats consist of the potential rising price of certain foods. For instance, if you make seafood dishes and
something negative impacts the shrimp market, a threat exists if you need to raise prices or find new suppliers,
because you may lose business.

Understanding SWOT Analysis


SWOT analysis is a technique for assessing the performance, competition, risk, and potential of a business, as
well as part of a business such as a product line or division, an industry, or other entity.

Using internal and external data, a SWOT analysis can tell a company where it needs to improve internally, as
well as help develop strategic plans.
Using internal and external data, the technique can guide businesses toward strategies more likely to be
successful, and away from those in which they have been, or are likely to be, less successful. An independent
SWOT analysis analysts, investors or competitors can also guide them on whether a company, product line or
industry might be strong or weak and why.

KEY TAKEAWAYS

 SWOT analysis is a strategic planning technique that provides assessment tools.


 Identifying core strengths, weaknesses, opportunities, and threats lead to fact-based analysis, fresh
perspectives and new ideas.
 SWOT analysis works best when diverse groups or voices within an organization are free to provide
realistic data points rather than prescribed messaging.
SWOT Matrix.
Analysts present a SWOT analysis as a square with each of the four areas making up one quadrant. This
visual arrangement provides a quick overview of the company’s position. Although all the points under a
particular heading may not be of equal importance, they all should represent key insights into the balance of
opportunities and threats, advantages and disadvantages, and so forth.

SWOT Analysis was first used to analyze businesses. Now it's often used by governments, nonprofits, and
individuals, including investors and entrepreneurs.
Example of SWOT Analysis
In 2015, a Value Line SWOT analysis of The Coca-Cola Company noted strengths such as its globally famous
brand name, vast distribution network and opportunities in emerging markets. However, it also noted
weaknesses and threats such as foreign currency fluctuations, growing public interest in "healthy" beverages
and competition from healthy beverage providers.Its SWOT analysis prompted Value Line to pose some tough
questions about Coca-Cola's strategy, but also to note that the company "will probably remain a top-tier
beverage provider" that offered conservative investors "a reliable source of income and a bit of capital gains
exposure."

 Strengths describe what an organization excels at and what separates it from the competition: a strong
brand, loyal customer base, a strong balance sheet, unique technology, and so on. For example, a
hedge fund may have developed a proprietary trading strategy that returns market-beating results. It
must then decide how to use those results to attract new investors.
 Weaknesses stop an organization from performing at its optimum level. They are areas where the
business needs to improve to remain competitive: a weak brand, higher-than-average turnover, high
levels of debt, an inadequate supply chain, or lack of capital.
 Opportunities refer to favorable external factors that could give an organization a competitive
advantage. For example, if a country cuts tariffs, a car manufacturer can export its cars into a new
market, increasing sales and market share.
 Threats refer to factors that have the potential to harm an organization. For example, a drought is a
threat to a wheat-producing company, as it may destroy or reduce the crop yield. Other common
threats include things like rising costs for materials, increasing competition, tight labor supply and so
on.

Advantages of SWOT Analysis


A SWOT analysis is a great way to guide business-strategy meetings. It's powerful to have everyone in the
room to discuss the company's core strengths and weaknesses and then move from there to define the
opportunities and threats, and finally to brainstorming ideas. Oftentimes, the SWOT analysis you envision
before the session changes throughout to reflect factors you were unaware of and would never have captured
if not for the group’s input.

A company can use a SWOT for overall business strategy sessions or for a specific segment such as
marketing, production or sales. This way, you can see how the overall strategy developed from the SWOT
analysis will filter down to the segments below before committing to it. You can also work in reverse with a
segment-specific SWOT analysis that feeds into an overall SWOT analysis

5 S.W.O.T. analysis examples

Here are some basic examples of S.W.O.T. analysis so you can see how it’s done.

1. Banana for breakfast


Opportunities
Strengths
Banana split
Potassium and vitamin c
Topping on cereal
Portable
Frozen bananas
Good value
Weaknesses Threats
Not filling enough Missing out on an apple
Peel is slipping hazard Banana allergies
Small ripeness window Losing the heartiness of oatmeal

Strategy: The cost, nutritional value, and versatility of the banana make it a wise choice, despite its negligible
shortcomings and different options.

2. Weekend trip to the lake

Strengths Opportunities

 Tranquility  Go water skiing


 A body of water  Have a campfire
 Starry skies  Drink a beverage on the porch swing

Weaknesses Threats
Waterfront prices Missing out on a weekend at the beach
Machete-wielding killersGetting bit up by mosquitoes
Gators It rains all weekend

Strategy: The natural beauty and the selection of outdoor activities makes the lake a tantalizing destination for a
weekend getaway, but its high cost and risk of bodily harm could warrant a look at other locations.

3. Jog after work


Strengths Opportunities
Calorie burn Meet your future significant other
Fresh air Be filmed for a viral video
Sense of accomplishmentDiscover a briefcase full of money
Weaknesses Threats
Sweaty clothes Getting attacked by a feral cat
Hostile commuters FOMO when you see cyclists speed by
Shin splints Missing out on the camaraderie of CrossFit
Strategy: The combination of getting your cardio in and giving yourself a chance to find a mate, internet fame, and/or
riches far outweighs the downside of dodging traffic and having to do laundry afterward.
As you’ll see below, S.W.O.T. analysis can also be used to make project management decisions in the workplace.
4. Free or open source project management software

Strengths Opportunities
Free Try out PM software without a financial commitment
Community support makes open source more Save company resources for the annual holiday party
agile Stick it to the man by using open source
Basic versions are often easier for new users
Threats
Weaknesses
Missing out on all the extra features of paid software
Limited features
Your open source PM software is abandoned by the developer
Limited customer support
Trying to get customer service on a free version in the middle of a hectic
Infrequent updates
project
Strategy: Free project management software has its limitations, but can be a good fit for small teams or freelancers
looking to try it out for the first time. But it is not a replacement for full featured project management software.
5. Hiring a summer intern

Strengths Opportunities
Energetic and hard working Learn about hip music and TV shows
Up on the latest technology Learn new slang
Cost effective They could turn into full-time employees
Weaknesses Threats
Takes time to train them They could fall asleep at their desk
They have to go back to school at the end of the summerThey might cut out early on a Friday to go to a music festival
They’re still learning They use your training to get hired at a rival company
Strategy: With preparation and proper expectations, summer interns can be cost effective and productive.

Here’s a quick glance at each element of S.W.O.T.


Strengths: What is your team really good at? What do you offer people that others can’t or don’t?
Weaknesses: What are some things that your team is not very good at, that others do much better?
Opportunities: What are some areas that your organization could thrive in that it isn’t currently taking advantage of?
Threats: What are some external factors—competitors, consumer demand, economic conditions—that could make it
more difficult for your team to succeed?