| SWOTT EXAMPLE: Specialty Wine Shop in California |
| Impacting Factor | Strengths | Weaknesses | Opportunities | Threats | Trends |
| INTERNAL ENVIRONMENT |
| Strategy | Clear, focused strategy makes objective development easier. Located in California near several vineyards and wineries and in an area where the population has a substantial interest in wine | Lack of business experience, could lead to mistakes; Dependent on local population | Location provides opportunity to easily reach out and establish relationships with the vineyards and wineries in the area for supply and event hosting | Liquor warehouse stores such as BevMo and other wine shops are competitors; new entrants will have same opportunities with regard to location (Add Source) | Small business owners tend to have similar strategies (Add Source) |
| Structures | Functional structure allows for optimum organization and management of each function | Requires separate management of each function which calls for manager level employees or outsourcing at relatively higher cost | Allows for concentration on particular function when needed | Competition may have a less expensive structure; Potential to lose good managers to the competition | People tend to prefer working in small to medium organizations Source, 2009) |
| Processes and systems | Minimal systems above and beyond basic accounting, inventory systems; Have technical skills - no need for IT personnel | Being a new business makes it difficult to customize the processes and they may require significant changes as the business matures | Able to create broad processes for each function that are simple to learn and follow | Competitors have the ability to differentiate in their processes | Companies are moving in the direction of documenting formal processes and procedures for a variety of industries (Add Source) |
| Resources | Contracting with wineries allows for adequate supply at reasonable cost; Good banking relationships make lower cost of financing | Small store allows only for minimal storage of inventory; the inability to buy in bulk can raise costs | Opportunity to hire employees who already have adequate to superior knowledge | Vendors may charge more; inputs have variable costs | With the declined economy, resources may be less costly to obtain; vendors may be willing to deal |
| EXTERNAL ENVIRONMENT |
| Legal and regulatory | Most required laws (such as Food/Beverage licensing) are easy to follow; there are many resources in existence to explain requirements | Liquor license (and others) can be quite costly; lack of experience can lead to fines | Can study how laws affect wine shops; potential to hire legal resources | Changes in the laws and local rules could affect the business negatively if knowledge is not current | Lawsuits are increasing; If someone was to drink and drive, that could reflect on the business (Add Source) |
| Global | In the near-term, company will not locate outside of the United States, and likely not outside of California; Will use local resources | Company recognition will be low outside the nation which may cause international internet sales to be a non-lucrative market | Opportunity to reach customers to purchase wine using the internet | Competition in other states and countries is difficult to research and a lot of competition exists on the internet; Laws may be different | As technology advances, internet purchasing increases (ADD SOURCE) |
| Economic | Located in a relatively affluent area; wineries may be willing to lower wholesale costs | Owner may not be able to afford start up costs during this economic crisis | Internet sales provide opportunity to reach connoisseurs with money to spend | Economy could get worse; Customers may stop spending on luxuries | Small businesses are running out of cash due to unsold inventory and uncollected receivables (Lewis, 2009 |
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swottexample_2.xls
