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Starting a Day Care Center? Do a SWOT Analysis First

written by: N Nayab•edited by: Wendy Finn•updated: 5/27/2011

SWOT analysis is a strategic planning tool that scans the external and internal environment of the business, to identify the strengths, weaknesses, opportunities, and threats connected with the specific business or business proposal.

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    Download a sample SWOT analysis of Daycare Center from the Bright Hub media gallery. This sample analysis serves as a template SWOT to illustrate the concept of SWOT, and as a guide to undertake a similar analysis. The downloaded matrix contains all possible generic Strengths, Weaknesses, Opportunities, and Threats. Strike out whatever is not applicable and add factors based on specific conditions. There are no hard and fast rules, and inclusion or exclusion of points remain totally subjective. Be creative, and apply an analytical mindset.

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    Preliminary Work

    The preliminary work before undertaking a SWOT analysis is data collection. Establish a catchment area, or an area around the proposed day care center to target customers.

    • Collect data on the demographics of the area, such as, number of working parents, number of small children, major employers, whether such employers offer in-house day care facilities, and other relevant information.
    • List facilities and resources available, and compare the same with other day care centers in the targeted area of operation. Compare with competitors on location, cost, transportation, hours, food service, staff, play equipment and other facilities, all of which play a key role in influencing a parent's decision to select a day care center.
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    Listing SWOT

    Strengths and Weakness refer to internal factors or internal environment. Opportunities and Threats refer to external factors or external environment. From the available data, consider the strengths factors that the business has, and which competitors do not have. Such core competencies can include exceptional skills or experience, availability of competent staff, availability of superior facilities and resources, strong financials, brand reputation, relationship with suppliers, customer service, and more.

    Next, identify weakness or factors where the competitors remain at an advantage. The factors that count as strengths can also count as weaknesses. Businesses need to develop strategies and deploy resources to overcome such weaknesses.

    Next, identify opportunities. Opportunities are assumptions of favorable conditions in the external environment of the business. Competitors also have the same conditions, and businesses need to leverage their strengths to seize such opportunities before competitors do. Examples of opportunities include a good market for the product or service, potential tie-ins, regulations and legislation, poor competition, and more.

    Finally, identify threats. Threats are assumptions of adverse happenings in the external environment, which can impede business plans. The same factors that count as opportunities can also count as threats, and in addition, changes in technology, perceptions, and other factors count as additional threats. Organizations need to consider such threats when formulating business plans.

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    Application

    Having identified the strengths, weaknesses, opportunities, and threats, use the SWOT analysis of a daycare center to:

    • Identify the key strengths or USP of the business, and promote the same through marketing campaigns, customer engagement, and other interventions. Usually competitors do not have such strengths, or possess such strengths in an inferior fashion. Make sure the business plan focuses on retaining and improving such strengths.
    • Identify key weaknesses, and try to overcome them. For instance, an advertising campaign could offset the weakness of low brand visibility.
    • Identify key opportunities for leverage. Usually such opportunities become the basis for deciding to embark on the path. Make sure the business plan identifies the needs presented in such opportunities and devise activities and products to fulfill such needs.
    • Identify key threats and take safeguards to overcome or circumvent them. For instance, if established competitors are a key threat, devise innovative schedules, or compete on prices.

    A good SWOT analysis is the bedrock on which strategic planning rests. Translating such analysis into action ensures the vitality of the organization.

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    Reference

    • University of Wisconsin. “Overview of SWOT process." http://cpag.uwex.edu/how/documents/swotprocess.pdf. Retrieved May 25, 2011.
    • New Mexico State University. SWOT. http://cbae.nmsu.edu/~dboje/sbc/pages/page3.html. Retrieved May 25, 2011.

    Image Credit: freedigitalphotos.net/scottchan