Route Planning your business growth – Part 2

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Part two of our series on route planning your business growth focuses on the identifying the Opportunities and Threats for your business. We do this by looking external to the business.

Again there are many tools to help you to identify what these threats may be. The first and most well-known considers what’s known as the Macro Environment – the wider environment outside of your business and generic to a particular industry or sector. We can use the acronym PESTLE to help guide us to identify opportunities and threats.


Think about things that may generally happen in these categories that may have an impact – positively or negatively. A good example is perhaps the smoking regulations that were brought in a few years ago in the England, a great time to be in the outdoor heater and gazebo market as many pubs and bars clambered after them to provide an environment for smokers. Or how the technology in mobile phones has changed the retail market – “m commerce” has increased by over 5000% in recent years.

This should provide a number of factors that are completely beyond our control however we can steer our business towards them or away from them. Think of them perhaps as the road works to your business growth journey. We can perhaps steer our company away from them if we know about them.

The second tool to use considers the industry or sector you are in and the competition within it. Developed by Michael Porter the tools consider the 5 forces that have an impact on any particular industry.


Threat of substitutes and new entrants considers how easy it is for potential competitors to enter the market either by providing a substitute product or service or by providing direct competition. Consider here traditional video and DVD rental stores and their struggles against companies like Lovefilm and Netflix. What is the threat of new entrants into your industry, high, low, likely, unlikely? Likewise how easy would it be for a substitute product or service to enter the market, high, low, unlikely, likely. Obviously the less likely it is for either to happen the better position your business is potentially in.

The other two forces consider the amount of choice buyers have when considering purchasing your products or services? The higher the choice (bargaining power) the higher the level of competition and the harder it could be to potentially develop your business. Likewise how many choices do you have in the supply chain? Do you have a lot of potential suppliers? If so, you are in a stronger position with your business.

The final force – competitive rivalry – considers a number of points within an industry. Where is the industry in terms of its life- cycle? An industry in the early phases will have less competitors within it however there may be less users / buyers. An industry in shakeout or maturity will have potentially the greatest competition with no new buyers entering the market and competitors are fighting for market share.

Once we have considered the external environment using PESTLE and Porter’s 5 forces we should now have a number of factors that can be placed within the Opportunities and Threats section of our SWOT.

This then should complete your SWOT. Part 3 will take it to a less traditional next step……


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