Organizational SWOT analysis of a selected company and market domain

A SWOT analysis is a means of understanding both the internal and external environments in which an organization operates (MindTools, 2017). It is commonly used as a means of strategy formulation, to help firms understand how they can use their strengths to take advantage of opportunities in the market, and to shore up their weaknesses to defend against external threats. To that end, it is worth analyzing the internal and external environments of 3 Squares, the meal delivery service for seniors, in order to see where the best market opportunities lie, and what challenges the company is going to face.

There are a few different strengths that the company has internally. 3 Squares has a strong business plan. It has researched the market, and identified that there is an opportunity in providing food delivery for seniors. This is a growing market, and one that only has some competition. It is believed that there is room not only for more competitors but that the market will continue to grow, due to the demographic shift. The business plan takes into consideration the cost structure of the proposed business, and has identified that this business can be pursued profitability. Further, the business plan provides the needed structure for the company to start to prepare for business launch, and it also provides the means by which the owners can approach potential sources of financing and demonstrate to them that there is a viable business here (Root, 2017.

The second strength is that the people behind the company have the necessary skills needed to execute the plan. There are business skills that the principles have acquired in business school. Such skills help to inform the principals about what they need to do in terms of accounting, production management, marketing and other aspects of the business. Having these basic skills serves two main purposes. First, these skills mean that the principals are able to leave no stone unturned -- attention can be paid to all aspects of the business, whereas some small business owners might ignore certain aspects of a business with which they are unfamiliar. That will not be the case here. The other benefit of having these skills among the business owners is that the company can pay less in salary, which will be essential during the start-up phase. The reality is that quality employees cost money, whereas business owners can get by with minimal withdrawals from the business because they are receiving equity. At the end of the day, it is important to minimize the costs for salaried staff, especially in technical professions, in order to preserve cash flow during the initial start-up and rapid growth stages.

The third strength is that the start-up has financing in place. This is an essential strength for a couple of reasons. The first is that a lack of capital undermines a lot of start-ups. Often, costs are higher than the owners think, and they try to start their business with minimal capital. This creates a constant cycle of not having enough cash, and the business is vulnerable from day one. Having ample start-up capital is necessary to avoid that. The second reason why this is valuable is because there are downsides to having to utilize external capital. Even if it so happens that external capital is needed, equity capital equates to a loss of control over the company at a certain point because the interests of other shareholders matters more, and debt capital represents a drag on cash flow that reduces the amount of money that can be plowed back into the business.

These strengths basically combine to give 3 Squares a good starting point. The company has some of the foundational elements in place that will smooth the launch and growth phases of this company. These strengths by no means guarantee the success of 3 Squares, but the company is more likely to succeed with them in place than if any of these strengths were absent.

There are some internal weaknesses that bear discussion. The principles, while talented in terms of having strong business education, are relatively inexperienced in terms of actually doing this. There are no veterans of food service, nor are there any veterans of seniors' services. The implication of this is simple -- there will be a very steep learning curve for everybody involved in the business, and success will be dependent on the ability of these individuals to traverse up the learning curve as quickly as possible, and probably to bring on more savvy veterans going forward if they wish to expand their business rapidly.

Another key weakness that 3 Squares faces, as it relates to the inexperience, is a lack of direct contact with the seniors' market. Ideally, the company would want to have contacts either directly with seniors or with institutions or medical providers who can recommend the service to seniors. Not having these in place will mean that in terms of marketing, the company is starting from scratch to build its funnel. In a start-up, building a proper funnel is one of the biggest challenges. Many start-ups are simply sales-focused, but to be driven by sales ideally means having a funnel of qualified leads, so that the reps are not just cold-calling, an activity that historically has a low rate of return.

The third major weakness that 3 Squares faces is common to all start-ups. The company's brand is completely unknown. When you start a company, people simply have never heard of you before, and a lot of the initial marketing activity revolves around creating brand awareness, and establishing a message. It is not easy to start from scratch. It is pretty reasonable to suggest that 3 Squares is going to need some word-of-mouth recommendations from its early clients, but ultimately the market is often geographically scattered. This is why it is recommended to initially target areas with unusually high concentrations of seniors, to build word of mouth that can extend beyond those geographies. Further, such targeting if successful will help to build a book of business and stable cash flow to help facilitate future growth.

All told, the company's weaknesses relate to inexperience, and overcoming these weaknesses really rests on the principals and their ability to learn quickly, on the fly. The weaknesses also pertain to marketing, insomuch as they reflect some shortcomings that will make the initial stages of marketing and brand-building that much more difficult. So 3 Squares has to consider how quickly it can overcome these weaknesses in order to really put the company in the best position to succeed.

The opportunity here has been identified as the growing market for home meal delivery to seniors. Many seniors either cannot cook anymore, or do not wish to. The business is small, but growing. There is general lack of awareness about the concept even among seniors, which while a challenge makes clear that the size of the opportunity really is only going to grow, for any firm in this business.

There are further opportunities as well. There is strong interest in things like organic eating, healthy diets, and the ability to combat food deserts. Many areas of the US lack quality food options, and what this means is that there is opportunity to market this service not just as food (thus competing with any other delivery service) but healthy food that can improve the quality of life for seniors. With baby boomers entering their senior years and an overall strong interest in quality of life in old age, there are different angles by which the opportunity can succeed, and different ways in which 3 Squares can seek differentiation from other means of eating for the target market.

A further opportunity exists to promote the service among non-seniors. While seniors are the initial target market, the reality is that this service can be useful for anybody who does not have the time or energy to prepare meals. Whether shut-ins or what have you, there are people who need this sort of service. This may be an opportunity for the future, but it is an intriguing future option either as a growth strategy or a Plan B. if the seniors market ends up not working out.

All told, the demographics and growing concept tell a story of tremendous opportunity. In a sense, 3 Squares simply needs to focus on meeting the initial opportunity that was identified without becoming distracted by any potential future opportunities. We feel that this is an important factor -- to recognize that the primary opportunity is the place to put our energy at present. It is valuable to know that there are other opportunities, but there is little need to pursue them until such time as we need to.

There are several different threats. The most obvious ones are competitors. First, competitors outside of the niche. Seniors can buy their own groceries, order in from all manner of other restaurants, and many assisted-living facilities use institutional food providers. These are all valid threats, and 3 Squares needs a plan to address each one in turn, so as to successfully differentiate. The external competitors may not be in the niche but they are alternatives, or substitutes, and they are widely available, and offer different benefits to seniors. Many are very strong competitors -- fast food chains and institutional food service tend to be very large companies that could easily outprice or out-market our service.

Furthermore, there are internal competitors as well. There are many markets that do not have a service like 3 Squares, but in the best markets it should be assumed that there are, or soon will be. We cannot assume that if a market has a high percentage of seniors that fit our target that we will be able to operate a monopoly -- it will be impossible to defend any temporary monopoly position we can establish. The key will be to have a better offering, and to utilize first-mover advantage where possible, and to ensure that we are differentiated so that the competitors in the seniors' meal delivery niche cannot threaten our ongoing viability.

There are other threats as well. The regulatory environment can be a challenge for food service providers of all types, and ensuring that our operations are within regulatory standards will be critical to ongoing operations. The economic environment is important. Seniors tend to live on pensions or other fixed incomes. This means that inflation can reduce the size of our market, for example. Customers under the age of 65 may see their meal spending decrease if their health care costs increase -- a real possibility in recent years and especially the current environment. After a long run, the stock market might collapse, or withdrawal from NAFTA could increase ingredient prices. There are a host of economic and political risks in the external environment that have to be taken into consideration.

All told, there are a lot of threats. The business has to think about how it can counter those threats, and carve out a piece of this market. It is important that we are aware of the treats, their scope and likelihood. Any given threat could be existential, but chances are if the business fails it will be more of a "death by a thousand cuts" situation where each threat has some minor impact but all told combine to make the business non-viable.