Market Awareness: Identifying Opportunities and Threats
|Regardless of what industry you operate your franchise within, it is important to stay aware of market trends and changes that might affect your business. Whether this be identifying new opportunities or keeping an eye on potential threats, having your finger on the pulse of your industry will help keep you one step ahead.|
No matter if you are a new or experienced franchise owner, or a field manager helping to guide a franchisee down the path the success, having the right tools to allow you to effectively analyse your business environment is essential. A SWOT analysis is a simple yet constructive method that franchise owners can use to evaluate both internal and external factors that may affect their operation and is an excellent source to help inform strategic decision-making.
SWOT stands for strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are internal characteristics within the control of the business that separate you from competitors. Some examples of strengths may be national brand awareness, qualified team members, and technology. Weaknesses are things that limit your business or things you could lack, such as resource limitations, limited product range or high costs. Being aware of these characteristics allows you to utilise your best assets and work to resolve your vulnerabilities. This can help sharpen a businesses competitive edge and result in better performance.
Opportunities and threats are external factors that have an impact on your business, these are things that you cannot control but can act in response to. Examples of opportunities may be new audience or geographic segments, increased consumer spending or new equipment and technology. Threats may be new entrants to the market, increasing labour costs or even changes to legislation that impacts your industry. Creating strategies to seize these opportunities and combat any looming threats will help improve the longevity of your business, an allow you to overcome tumultuous changes that can damage other operators.
Taking this tool one step further, after conducting a SWOT analysis franchise owners can take some time to consider their key capabilities. These are functions of your business that help support your strengths and allow you to take advantage of opportunities, and are the result investments in staffing, training, and development. For example, if one of your strengths is national brand awareness, a key capability may be your marketing department. It is the skills and abilities of your marketing team that have allowed you to develop this strength and can assist you in moving on a new opportunity such as expanding to a new geographic area. Such capabilities help define where your business excels and are what allows you to maintain your competitive edge.
This is an excellent process to undertake if you are a business owner making a significant strategic decision, a field manager looking to guide a franchisee down the path to success, or even a potential buyer to evaluate an existing operation. However, no matter what tools and processes you choose to use, up to date on what changes are occurring within the marketplace is vital to business success. In doing so, it is also important to reflect internally and consider where the business excels and where it could improve.