“People don’t plan to fail, they fail to plan.” I don’t know who originally authored this axiom or whether it just magically appeared on a legion of coffee mugs, but February seems like a good time to talk about planning. The holidays are over and most retailers have finished taking inventory. The winter shows in Vicenza, New York, and Orlando have given us a preview of the style trends to expect this year. We have a new president, a new century (even millennium purists agree), and a new selling season fast approaching. In short, if you’re not going to take time to do some serious planning now, when will you? A good place to start is by doing a SWOT analysis of your own business. More than a popular business buzzword, a SWOT analysis provides a sound base for planning by telling you where you are. Whether you run a thousand-store chain or a two-person operation, if you don’t know where you are, you can’t decide where to go.
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. Strengths and weaknesses are internal; opportunities and threats are external. We at JCK -and on a corporate level at our parent company, Cahners-have spent a fair bit of time in the past few months doing SWOT analyses at various levels. At JCK, we believe one of our greatest strengths is our name-a 132-year-old brand that stands for excellence and integrity. A weakness is that with the volume of projects we have, we sometimes forget that communicating with each other is as important as communicating with you. We see an opportunity, not just for JCK but for the jewelry industry in general, in the fact that-like it or not-America is a consumer culture, and Americans like to own pretty things. Likewise, our most pressing threat, the economy, is also universal.
The most effective way to do a good SWOT analysis is to make it a group project and to use an easel or a chalkboard to write down all the points. Include all your employees in the session, from the owner or president to the maintenance people. If you have a small staff (about 20 or fewer), do it together, but if you have a large staff it helps to break into smaller groups. Appoint a spokesperson and a scribe for each group. After each group completes its lists, come back together and have each spokesperson present his or her group’s findings. You’ll probably see, as we did, that some common themes will recur.
Each small group should also indicate which strengths, weaknesses, opportunities, and threats it feels are the most pressing. When you reconvene as a large group, you’ll either have a clear consensus or you’ll be able to discuss together which issues should take priority. Some issues, such as the economy, are indeed beyond your control, but how you respond to them is within your control. Rest on your laurels, and you’ll quickly see your strengths ebb away. Admitting your weaknesses takes guts, but what’s really important is that you work on fixing them. Opportunities and threats are often intertwined: for example, if the economy slows down, people may shop less but they won’t stop altogether. This is your cue to make sure they have a reason to shop in your store and not somewhere else.
Why should you bother to do a SWOT analysis? Consider the early part of the 20th century. At that time, America moved by rail. But the railroad companies failed to recognize that they were simply one part of a new, growing, larger entity-the transportation industry. At the same time, an ancestor of the French Hermès family recognized the automobile would replace the horse as a means of transportation. He recommended that the family firm diversify and regard itself not as luxury leather saddlemakers, but as purveyors of luxury travel accoutrements.
Did he do a SWOT analysis? Probably not in the formal sense outlined here. But he kept an open mind and saw that societal change would affect his business. Today, there’s a two- to three-year waiting list for some Hermès bags-but you can’t travel by train to most of the United States.