strength of company

When managers seek to strengthen a company's position, they often turn to a SWOT analysis. The analysis starts with lists of a company's strengths, weaknesses, opportunities and threats -- a strategy represented by the SWOT acronym. A company's strengths are the tools used to counter threats and seize opportunities, so thoroughness is important. To create a thorough strengths list, examine each of a company's functional areas: marketing, finance, production or operations and human resources

Marketing Marketing depends not just on promotions but also on pricing, distribution, packaging and service. A strength in marketing might be a company's distribution channels, which are able to quickly get products out to customers. Customers might be satisfied with the company's products and its service. Indeed, a company might have differentiated itself from its competition by service, a definite strength.

Finance Financial strengths not only mean a company has done well in the past but that it can use its situation to compete in the future. For instance, a company might be able to innovate if it has money to invest in research. Another financial strength might be the ability to borrow as indicated by possessing a lower debt ratio -- liabilities divided by net worth -- than that of other companies in the same industry. Other strengths might include profit margin and the return a company sees on investment.

Production or Operations Efficiency is an important strength that can be measured by determining the productivity index, which is output divided by input. The output is the number of something being produced whereas input is what's invested to create the product units -- hours, labor or money, for instance. Other strengths a company might possess are cutting edge technology, facilities located in strategically important areas, low waste and production capacity.

Human Resources Of all the resources a company boasts, its employees are the most important. If a company has strength in human resources, it may include an ability to attract and retain the best candidates from the labor pool. A company might also have a superior training program that lets new employees quickly acclimate or one that keeps developing employee know-how through cross-training or leadership development. Other strengths a company might have include depth and breadth of expertise, turnover rate, morale and satisfaction.

Research and Development Though not all companies have a research and development functional area, businesses still need some research capability to monitor the external environment. The ability to conduct and use customer and product research may be a company's strength, allowing it to capitalize on trends or market niches. The facilities, expertise and creativity to develop new products could be a strength, as is the adaptability of a company that is able to quickly adopt technological innovations in the marketplace.