Expert Speak: Mr. Ajay Wahi

SMEs: Do a regular dipstick on SWOT 

Achievements are to be savored. Enjoy them, but do not let them make you or your leadership complacent, because nothing stays the same. We have the recent experience of the global recession of 2008-09 to go by, in which many global giants went under completely. And these are the same global giants who taught the world what SWOT meant! But it seems they initiated the concept and grew complacent, eventually stopping the SWOT analysis and thus fading away.

Therefore, doing SWOT analysis should be very much a part of our life. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. For instance, for a particular SME, its strength may be a very good product; weaknesses might include poor customer support, which would endanger the company and/or its future growth; the Government abolishing sales tax on sales of its product might present the company with an opportunity; while a competitor might have announced the launch of a similar product, which would be a threat to the SME in the future.

However, all this is true only at a point in time. One year, or even one month after the above SWOT analysis, the scenario might be different, because change is the only constant; hence the need to do regular SWOT analyses.

SWOT analysis offers many other benefits as well!

1. As an SME, you are growing and dealing with many opportunities, and rushing all the time. Unless you take time off to assess the situation you are in, you may find you are running around, but are not reaping the full benefits of your effort. So you need to track your progress, and SWOT helps you do this.
2. SWOT analysis forces the leadership to keep abreast of developments in technology, market, economy, competition etc. As a result, the management gains more knowledge, giving them greater power, for knowledge is power!
3. It ensures that each member of the leadership team is working towards a common goal. Conducting frequent SWOT analyses helps in aligning the working of each department towards a common organizational goal.
4. Sharing the conclusions of a SWOT analysis with employees enthuses them as they see the company as one with clear-cut objectives.
5.  Lastly, a SWOT analysis is a key tool for a reality check. Remember, something that was an advantage 3 months back may be a threat now. Your advantage was that you sold a lot more than your competitor, but did not take care of your client support whereas the other competitor sold half but had satisfied clients. So if you don’t take a break from sales and improve your client support, you could effectively land up gifting your clients to the competition too!

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India is a fast expanding economy and there are rapid changes in our industrial policies, export benefits, SEZ regulations, foreign players’ entries etc. Simultaneously, political, financial, economical, regulatory, and competitive aspects are changing so fast that we need to do SWOT regularly to know how such changes will impact our company.

This dynamism and fast pace is a wonderful opportunity for an SME because an SME being lean can react fast whereas larger companies are slower to respond. The telecom sector is a case in point. Because of regulatory and competitive changes, Bharti and Reliance who had a field day with less competition now have 13 competitors and it is the new ones who have upset the giants by announcing war-like tariffs!!  

Caution:  SWOT analysis should be conducted frequently enough for it to be useful, but not so often as to use up all employees’ energies doing SWOT alone!

Actions from the SWOT analysis must be given weightage so the SME focuses on those actions which will make the most difference to its future growth. 

Sum Up:  SWOT lets us be proactive, anticipating the future.

The company and employees are intellectually challenged, and can make plans which are practical and achievable, and form the basis for solid growth of the SME.

The contributor of this article is Mr. Ajay Wahi, author of management books like 'and the award for the BEST SME of the year goes to...' and 'Get Noticed Get Promoted'.

He can be contacted at 9810027979 or awahi2010@gmail.com