. A SWOT analysis is a very effective method of analyzing a business. It is used to identify the strengths of the business, which could include skilled staff, experience and financial situation, the weaknesses, such as demotivated staff, or limited resources, the opportunities, such as merging with other businesses, or expanding into different areas, and the threats, which could include competition, politics etc. It can be very useful, as it allows the business the chance to maximize their strengths, minimize their weaknesses and threats, and take advantage of their opportunities. These are essential factors in keeping the business successful, and helping it to achieve its objectives and targets.
Human Resource management Accounting and Finance Marketing
Strengths ‘The technology business was founded in 2007 by brothers Nish and Sach Kukadia' – Being a family run business is a strength as they are likely to be more emotionally invested, meaning they will put more thought and care into strategies and decisions. As they are also so heavily involved in many aspects of the production process, such as packaging and dispatch, they can assure the quality is up to their standards. High quality products can improve customer satisfaction and increase the chance of repeat sales. ‘revenues rise 20pc year on year to hit £47m in gross turnover for 2015.' – A 20pc rise per year is very significant, meaning the sales volume is clearly increasing. Finance is often a very important factor in driving a business towards success, and a high profit will be very useful to help the business achieve their goal of growth. ‘SecretSales has driven up revenues by focusing its marketing efforts on TV advertising.' –TV marketing, is much more effective than many other techniques, due to its large audience, the business also focuses on placing their adverts on popular channels, such as E4 or Comedy Central, which means the adverts are targeting a large volume of people. This will increase the customer base, and therefore the sales volume.
Weaknesses Being a family run business also has its weaknesses, for example, personal family issues could be carried over into the workplace, causing conflict, which could jeopardize the business. ‘it has taken SecretSales.com almost a decade to make a profit.' - This means the business' income was lower than their outgoings for a very long period of time. If this was to ever repeat, it is unlikely they could reach their goal of growth, and it could even cause them to go into liquidation. 70pc of their annual budget is spent on television marketing, although this could be seen as a strength, they are also missing out on potential customers who perhaps don't watch television.
Opportunities ‘partnerships with brands such as Dyson and Bose'- Having partnerships with such well known brands could attract other large brands. This could increase customer base and sales, and improve their reputation. Being linked with such well-known brands also gains customer's trust. There are opportunities to partner up with large brands, which could provide more funding for the business. This funding could be further reinvested into the business. "We've used the behavioural trends to change our sourcing strategy and reduce returns,"- this is a very useful strategy for the business, as it can reduce product waste, and as technology improves and expands, the business will be able to adapt even more.
As online sales is such a growing market, it is likely that the business will lose customers due to competitors, this could cause a decrease in sales volume, which is a very high risk for them, as they rely so heavily on sales to generate their profit.
As streaming websites such as Netflix are becoming increasingly popular, less people are watching television; meaning television adverts could become less effective.
3. The fact that it took SecretSales.com almost a decade to generate profit is a major issue, which I believe should be addressed. It is extremely important that this business remains profitable, so that their main goal of growth can be achieved, and it is important that they identify why this period of zero profit occurred, and why it was so prolonged, in order for them to avoid this happening again in the future.
Another issue that SecretSales.com should address is their marketing techniques. Currently, streaming websites such as Netflix are taking over from basic television channels, which means television advertisement is becoming less effective for businesses. This means that the business is investing into something that is becoming more unlikely to benefit them; therefore, their money could be better spent elsewhere.
4. SecretSales.com should identify and analyze exactly why they went so long without generating profit, so that this could be avoided in the future. For example, they could avoid using the same method of marketing that was used during this period, or make sure their outgoings are much less than they were previously.
They should also consider spending less of their budget on television marketing, and look into other techniques. For example, advertising on social media is a much cheaper alternative, and perhaps even targets more people; this could reduce costs, and increase sales volume, which could increase profit.
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