Investigating Entrepreneurial OpportunitiesSWOTProfessor Colin GrayOne of the most widely used tools in business decision-making is the SWOT analysis –identifying the Strengths, Weaknesses, Opportunities and Threats of a proposal. It can beused in helping to analyse the key factors in buying new resources, setting a new marketingstrategy and also in assessing the likely viability of an entire new venture. Deceptively simpleto understand, the SWOT can sometimes be tricky to apply in practice - especially withfactors that can have both strong and weak features; or where factors change over time. Howdid Julian research the strengths and weaknesses of his idea and how did he make theSWOT analysis relevant to his business?Julian BrowerThe SWOT analysis is one of the leading bits of my box because that’s really the one thatdecides whether Ive got a serious chance of success. Um - the SWOT analysis for methrough a process of Internet, through a process of mixing with people, discussions, droppedout a number of factors that I hadnt even considered and that would have destroyed mybusiness. So I went out and I actually had a look at the um strengths of my project and Idecided whether I had a serious chance of success and I decided that I did have a chance ofsuccess because this was a new idea that wasn’t being used and a number of outlets wereavailable. The shops were available and I spoke to the shop assistants and I said you knoware you interested in this idea and they all said yes, we’d love it. If youre giving us freemoney and all we have to do is sell you an A1 size sheet in the front window and we don’thave to do anything, that’s a fantastic idea. I then had a look at the weaknesses and the sortof weaknesses that came out well Im giving them a thousand quids worth of my assets.What if they break it? What if the electricity goes off? We only give them money for when weare being advertised. What if we get no advertising on the boards? What if we find that theycover the poster with some brand new offer for cheese – whatever? These are the sorts ofthings that came out in the weaknesses you know. Interaction by local shop makers. Whatabout vandalism? Theres a thousand quids worth of brand new television set sitting in a frontwindow of a village shop to vandalise. These are the sort of weaknesses that came out of it.I looked then at how to sort of develop the opportunities and then went on to the threats.Each time I highlighted areas that I hadnt even considered. And I felt it was so important tohave this box in which I could filter out what were you know SWOT is absolutely vital in doingthat.One of the other areas I looked at in terms of threats was transaction costs and opportunitycosts. Opportunity costs were if you spend time developing one area - an idea how much is itcosting you not to develop another area? For instance you might want to be spending timeselling into the local shop market but you’re not selling it into the small medium enterprisemarket. So how much is it costing you to do that? And I developed that in great detail as athreat. And also the transaction costs. How much does it cost for me to get from thecustomers right through to the board and every single element of the process in between. Andwith the threats I found a number of different places where that cost could go up. But withoutthe SWOT I wouldn’t even have considered that. I wouldn’t have had a formalised approachto it. Its just having like a little sort of goal at the end of the line and knowing right Ive got toget to there. How am I going to get to there? Ive got a problem; Ive got a threat here. Howam I going to obviate that threat? So out of the threats came more opportunities like a littlecircle in a way. The whole thing linked together.Professor Colin GrayHow and when did you determine that the strengths outweighed the weaknesses and indeedthe opportunities outweighed the threats?
Julian BrowerI think there was a bit of a gut feeling to decide whether something was actually strongenough to obviate any potential damage um but the other thing I would say is when you comeup with a threat you can also come up with a solution to that threat as well. When you canclearly define a threat and find out where its coming from you will be surprised how yourentrepreneurial brain looks for a way around it. So turning a threat into an opportunity – it maystart off as an insurmountable waterfall to get up but actually if youve got an entrepreneurialbrain you will develop a solution to that threat and that will involve a bit of research. You maygo on the Internet. You might find that theres no connection. In my case it was how am Igoing to get connected from the main computer system to an e-board stuck in some ScottishHighland village? So I thought well I can look at WAP so I went to WAP and they said well,its going to cost you this to do it. So the cost of actually that process um was too expensive.And I thought have these guys got Internet connections? Well yes they have. Everybody hasgot Internet connection. I can take a feed now off their broadband feed so as long as there isa broadband feed into the shop I can have a small element of the bandwidth and use that freeof charge. So I didn’t even think of that but the threat led to an opportunity and a little bit ofresearch squared the box.Professor Colin GraySo a thread then became the source of a new strength?Julian BrowerAbsolutely. And that’s the thing. That’s the way youve got to think about it. You know weare all dealing every day with the threats but its our brains that turn those into opportunities.Professor Colin GraySo clearly the SWOT analysis is not a static thing. Its something which generates a dynamicapproach.Julian BrowerExactly. That’s what its doing. Its little wheels going on inside and inside and you just comeup and you write down your threat and then you look for the opportunity – how are you goingto get around it. And you’ll be amazed that your entrepreneurial brain will solve it. And its atwhat point you cant solve it because it becomes too expensive, unrealistic cant resource it.Then you start to think right, this is a serious threat Im not going to be able to do much aboutthis so I now need to loo at another way of achieving this. So this is a lovely dynamic way ofdoing that and you may start off with a very, very small SWOT list but that’s the creativityprocess kicking in; that it is dynamic and it does change. And it changed throughout thecourse I did.Professor Colin GraySo it’s actually at the heart of your evaluation processJulian BrowerIt is and that’s why it appeared very much at the top of my filter box because SWOT followsthrough all the other processes. SWOT sits there as an umbrella across everything else andas I learn things I drop them into the SWOT and it turns the handle and it may pop out but itwill come back some time later - just turn the handle and pop out the other end and if thingscan get through my SWOT they get through to the idea at the end. And they very rarely dosadlyProfessor Colin GrayAnd how does your idea now stack up in terms of your SWOT analysisJulian BrowerWell I think there are a number of areas er that still remain threats. Um one of the biggest isthe finance threat, which I have mentioned. The other area is - is finding shops that arentgoing bust because theyre going – theyre losing business. But then you see there wasanother thing that came out of it. I thought to myself I cant rely on village shops al the time sowhere else am I … I thought pub tables. That was the other thing that came out of it. And this
came out of a discussion on the OU website with somebody who said have you thought aboutadvertising on pub tables? I thought yeah why not? Everybody goes in. They get drunktheyre looking at the table if we can take a small area of the table chop it up into bits, floggingadvertising –Professor Colin GrayDo you mean the surface of the table?Julian BrowerYeah the surface of the table. I mean electroluminescent screens are about no thickness atall. They can sit under a sheet of glass and you can advertise taxis, kebabs um drive homeservices, night-clubs, pole dancing, the lot. You can do it all on the tabletop. So I thought of anew outlet that came out of it. That came out of a SWOT analysis because I was veryconcerned about how many village shops I could get on board.