SWOT Analysis: The Venture's Objectiveness

5. The venture’s attractiveness

To assess the attractiveness of a new venture, Gretzky (2010) recommends the use of strengths, weaknesses, opportunities and threat (SWOT) analysis. The SWOT, identified in Table 4 presents conclusions on both the internal and external environment by matching strategy with strengths and opportunities (Thompson et al. 2016).

Based on Table 4, the major strengths highlighted are the new venture’s experienced and knowledgeable management team and its unique product offering. The MD understands the marketing environment and thus, capitalizing on this opportunity (after assessing its viability in section 3.1) to meet customer demands. However, the major weakness is the lack of funds to market the product so initiate

A large scale production would not work well with the focused differentiation strategy highlighted in section 4.2. A proposed solution to the potential entrepreneur is to lower overall costs so that they can move away from a focused differentiation strategy into a hybrid strategy since the company can gain its competitive advantage through both low cost and value. Moreover, while TT is an economic recession, finance experts claim that this is a good opportunity to make an investment so that when the economic cycle resets, the business can be boosted. Finally, now that the venture’s attractiveness have been covered, it is vital to discuss the risk factors a potential entrepreneur will

As noted in section 1 and 5, the MD has acquired a wealth of knowledge and market since he worked in the same industry for the past five years. Financing has not been covered yet, therefore, the discussion on financial risk will take place in section 7. Other the other hand, Gartner and Liao (2011) indicates that strategic risks should also be considered which looks at the overall success of the new venture and its rate of growth in the next few years. While high risks yields high returns, Spinelli and Adams (2016, p.126) argues that ‘entrepreneurs take calculated risks and avoid risks they do not need to