SWOT Analysis Definition and Examples

SWOT in this context is the acronym for strengths, weaknesses, opportunities and threats. A SWOT analysis is a study that evaluates the variables of a company or business, where strengths and weaknesses are internal, and opportunities and threats are the external elements (Kotler, Makens, Baloglu and Bowen, 2017). Furthermore, by conducting this analysis, companies, whether existing or new, will have a better understanding in relation to both their micro and macro environments. This in turn is essentially important in the development of the company’s concept and strategies to achieve its goals and objectives.

According to the information presented in the case study, Acorn House Restaurant possess several internal capabilities accompanied with a wealth of resources, making it the eco-friendly giant it is in the restaurant industry (Davis, Lockwood and Stone, 2008). However, there is always room for improvement and areas to consider, as the environment in which it operates will eventually change, be it a door of opportunities or threats. The following serves as a proposed SWOT analysis for the restaurant.

Strengths

These refer to the positive situational factors that helps a company/business in achieving its objectives (Kotler, Makens, Baloglu and Bowen, 2017).

•  Eco-friendly concept – observably there has been a growing trend of ‘going green” in just about everything, and persons are giving into this concept as it has countless dividends in relation to health and the environment, among others.
•  Local produce – by supporting the local agrarians, they obtain fresh and organic produce that are sustainable, enabling customers to have a better appreciation for what they consume. Also, it is cost effective compared to having to outsource the items.
•  Renewable energy – through the use of natural lighting and green energy, AHR is playing its role in minimizing its carbon footprint or greenhouse gas emissions and thus the cost of operation is quite inexpensive.
•  Minimized wastage – using consumer portion control relative to food and an efficient on-site wormery managing compostable waste, are both examples of innovative ways to manage waste.
•  Embracing internal and external customer involvement and education pertinent to its green initiative/s, allows them to be encouraged or influenced to become environmentally conscious, enabling them to practice green habits.

Weaknesses

These are the limitations and negative situational factors that interfere with the company’s performance (Kotler, Makens, Baloglu and Bowen, 2017).

•  Import speed – according to the case study, AHR has pledged not to use air freight to import any of their products, but rather, do so via cargo boats. Airplanes are generally faster than boats, therefore, it will take more time to import the restaurant’s produce.
•  Menu seasonality – seasonality prevents familiarity on the customers’ part, as a result, more marketing would need to be conducted on the restaurant’s behalf in order to create awareness about these seasonal menus.

Opportunities

Refers to the favorable factors or trends in the external environment that the company may be able to exploit to its advantage (Kotler, Makens, Baloglu and Bowen, 2017).

• Acorn House Trust – by training aspiring restaurateurs in environmental friendly restaurant management, these trainees can one day open their very own green restaurant houses and partner with AHR. Also, this initiative can attract funding from companies or persons that are environmentally conscious and supports AHR’s green efforts.
• High customer equity – since the “green” trend is appealing to most persons today, AHR can tap into markets it has never explored before in a bid to grow its customer numbers.

Threats

The unfavorable external factors or trends that may present challenges to company’s performance (Kotler, Makens, Baloglu and Bowen, 2017).

•  Natural disasters – the occurrence of these destroy produce, in turn creating shortages. This therefore will create a challenge for both the AHR and its suppliers.
•  Seasonality – AHR can lose customers who may view this characteristic of their menus as inconsistent. 

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