Top 10 weaknesses in a business you should be leveraging

There are a lot of things that can go wrong in a business. A company can stumble for all kinds of reasons, from financial problems to personnel issues. 

There are usually three main categories of weaknesses in a business. They are organizational design, organizational culture, and organizational capabilities.

A lack of organizational design has resulted in fragmented processes, siloed departments, tools, data sources, and organizational charts, making it difficult to identify who is responsible for what.

In an aggressive market, a bad organizational culture will lead to poor customer service, which will bring a company to its knees. In the absence of a culture that fosters innovation and creativity, new opportunities won’t come your way. You will quickly lose your competitive advantage.

The lack of organizational capabilities is one major roadblock to success worldwide. If your employees don’t have the right tools, equipment, and internal processes, the results will be suboptimal.

If you want to bring more value to your role in your organization, you have to determine the weaknesses in your area and figure out how to fix them. There are multiple tools you can use to figure out the most common weaknesses in a business, like SWOT analysis and FMEA (Failure Mode and Effects Analysis).

Weaknesses in a business

What are the weaknesses in a business?

So, How do you determine a business weakness?

The failure of a company to achieve its objectives in a strategic business direction may be considered a business weakness. A company’s weaknesses may put it at an insurmountable disadvantage sometimes.

Sometimes companies fail after they launch, and sometimes they don’t do well from the start. This can happen for a variety of reasons. However, when you know what your weaknesses are, you can take preventive measures.

Below is a typical business weaknesses list we’ve seen in the past based on industry research.

1. Insufficient market research to find the right products

Insufficient market research is a major cause of startup failure. You’ve got to build a product the market wants if you want your startup to succeed. Your product won’t sell if you don’t know your target audience, what they want, or why they should buy your product over the competition.

It’s tough to find a product that fits a niche market, but it’s crucial. Companies that conduct market research in their industry can monitor competitors and stay on top of consumer buying trends. 

By doing your research and spotting opportunities for innovation, you can create a product that addresses a consumer need. Your first step is to identify pain points and see how your product or service can solve them.

Some companies fail because they don’t get enough customer feedback. Developing new products in isolation is a big mistake. Particularly, startups cannot survive for long if their products don’t sell. Let’s look at some business weaknesses examples related to market research.

  • Premature product releases
  • Not identifying the target market
  • Bloated features 
  • Unidentified user needs
  • Unable to meet the market demand

There are many potential obstacles to business success. Here are a few common ones. 

2. Poor quality of products or services

If a company doesn’t produce quality products, it will probably fail. Nowadays, consumers have high expectations when it comes to quality. They can voice their dissatisfaction with the many online forums available. 

R&D and product development are significant investments for companies. A company that has an advantage in product quality is able to charge a higher price than its competitors. Quality products typically have higher margins too.

The quality of your products also affects your brand value. The shorter your time to market, the less likely you will deliver a high-quality product. Quality can be sacrificed to meet market the higher market demand in some cases. 

Maybe the company will sell thousands of units and get a lot of new customers. However, their customer retention will be lower than a competitor who offers high-quality products at a reasonable price. Poor quality can cost you more in the long run.

Let’s take a look at some company weaknesses examples when it comes to poor product quality.

  • Rework costs
  • Penalties
  • Product returns/Replacement costs
  • Loss of customers

3. Poor communication

Ineffective communication wastes both time and money. Yet, unfortunately, businesses often make the mistake of not formalizing their communication processes. It’s an internal weakness of a business that can easily go unnoticed.

By creating an effective hierarchy of communication, you empower your employees. Transparency goes a long way in building trust. Having organized channels for feedback and direction is a strength of an organization.

 It’s the company’s leaders’ job to communicate its vision and big picture to employees. Mission, vision, business strategy, and goals engage everyone in shared values and company culture. The lack of communication is a big reason for employee turnover.

The way bad news is delivered is crucial. Too often, it is done ad hoc. Managers should create a structure for reporting that keeps employees informed and on top of things. 

It is possible to avoid mistakes by following a set of communication guidelines. A monthly internal communication such as an email or newsletter could, for example, be implemented so that different departments are kept up-to-date about each other’s activities.

Customer communication must also be handled correctly. You might lose your customers’ trust and confidence, incur a significant financial loss or lose valuable business relationships if it’s done incorrectly. Plus, it gives your competitors a chance to steal your market share.

 When communicating, authenticity is key. Customers trust products or services that provide quality and clearly communicate what they can and cannot do.

4. Lack of long-term strategic planning

It’s easy to get caught up in a whirlwind of success, then crash and burn. Accidental success can be tricky. You can have financial success without a strategy. Unfortunately, that success is hard to sustain without proper planning and forecasting.

Also, many businesses reach a point where they can no longer grow. So you need long-term strategic plans to get off the plateau.

The attitude of an organization’s employees is crucial to its success. In the absence of direction and planning, many workers lose morale and become disengaged. 

Everyone in the organization will be able to work together if they have a clear vision of where the company is headed. People who aren’t swayed by money or other benefits will be motivated, and they’ll be proud of making a difference.

Here are some issues of not having a long-term vision and strategic road map for an organization.

  • Poor leadership
  • Lack of direction for employees
  • Confused stakeholders
  • Lack of teamwork
  • Unwillingness to change

SWOT analysis is a tool that can be used to develop both short and long-term strategies. It helps you align your internal factors or company’s strengths with external factors that present opportunities or threats. 

The PESTLE analysis is another strategic tool that can help you analyze your external environment and identify any external opportunities. SWOT analyses are usually converted into TWOS matrixes to form competitive strategies.

5. Failure to execute the business strategy

A strategic plan outlines what the company needs to do for long-term success. Businesses can’t grow and stay competitive if the strategy is not implemented right. 

It’s crucial to identify your company’s strengths and execute a competitive strategy that allows you to leverage those internal strengths. However, one of the most prevalent business weaknesses is the failure to execute a business strategy.

Companies that are not properly developing and executing strategies usually fail to execute their business strategies.

Approximately 90% of organizations fail to execute their business strategies, according to Robert Kaplan and David Norton’s The Balanced Scorecard book. 

This failure is caused by ineffective internal operations or weak operational performance in most cases.

The role of marketing strategy, for example, is crucial for capturing a customer base and establishing a thriving business. Your marketing campaigns may be on point, but you could still fail to execute your overall marketing strategy. 

Perhaps you launched your campaign too early. Perhaps your message was great, but the timing wasn’t right. There could have been a lack of market research or a creative spark.

6. Disengaged Employees

Any organization’s success depends on employee engagement. To begin with, it lowers production costs, which can lead to better organizational efficiency and lower turnover rates. In addition, engaged employees are more likely to produce stellar work and help their colleagues in times of need.

A Gallup study found that companies must strive to maintain a 4-to-1 ratio of engaged to disengaged employees to maintain a high level of energy and morale.

This shows that employee engagement can have a bigger influence on a business. Here are some of the issues with disengaged employees.

  • Decreased Productivity
  • Poor customer service
  • Decreased morale
  • Failed business strategy execution
  • High turnover

7. Outdated technology

The technology landscape is rapidly changing. When no investments are made into improving equipment, software, or other technological tools, an organization will eventually fall behind. 

All critical business applications and equipment must be updated, so companies don’t rely on outdated technology or skill sets.

Keeping up with the ever-changing market requires technological innovation, but it is also expensive and time-consuming. Technology companies are constantly releasing new products. By incorporating these into your workflow, you’ll be able to improve productivity and save money.

Using SWOT analysis, your organization can identify outdated technologies. In addition, market research and gap analyses can identify potential solutions.

8. Weak Brand Reputation 

The reputation of a brand is extremely important. Customer loyalty is determined largely by a company’s reputation. Therefore, maintaining a positive reputation is imperative today. 

The consumer has become so savvy about brands. The public will take notice of any bad publicity, regardless of whether it affects them personally. Social media has increased the risk of negative news spiralling out of control for businesses. Therefore, every detail matters!

When customers notice that a company does not uphold the most important values to them, they will not be interested in conducting business with them. 

As a business owner or executive, it is your responsibility to make sure your employees are on the same page about customer service expectations. This ensures that customers feel valued and heard.

Any business should have a digital strategy these days. Studies show that 94% of consumers read online reviews, and 4 out of 5 customers won’t buy from companies with negative reviews. 

If your digital strategy is a weakness in business planning, it can be addressed quickly with the proper messaging and resources in the marketing department.

9. Inability to Prioritize

It becomes increasingly difficult to prioritize tasks as an organization grows, especially when so many interruptions and distractions occur. It is easy to get overwhelmed by urgency without clarity on what matters most. This can lead to actually critical work not being completed or done poorly. 

Prioritization skill is one of the business weaknesses that can be addressed. You should provide training and tools related to task prioritization to employees if this is an issue in your workplace. A simple urgent-important matrix will help you break down tasks into both urgent and important ones.  

The Eisenhower Urgent/Important matrix is a simple 2X2 grid. It divides activities into four categories.

  1. Tasks that are truly important and urgent – Do them
  2. Those that are urgent but not important – Delegate them
  3. Those that are neither urgent nor important – Delete them
  4. Those that are important but not urgent. – Schedule them 

This technique ensures time for high-impact activities. First, you should set priorities and schedule your work. Multiple studies have found that most people feel overworked, and they don’t feel like they’re doing everything they should. You can combat feeling overwhelmed by prioritizing tasks in order of importance and blocking out focused time on your calendar.

This is a simple example that shows how the technique works.

Eisenhower Matrix Examples - Project Manager
Eisenhower matrix for a Project Manager

10. Lack of diversification

One of the main weaknesses of a business is that it can become too focused on one area, making it vulnerable to competition. That’s why companies need to diversify their products and services to be more resilient. Then, when one part of the business suffers a temporary setback, another part might make up for it.

However, uncontrolled diversification can lead to financial issues, so this should not be done without careful consideration. Therefore, businesses must plan their diversification strategy carefully to avoid any negative consequences.

McDonald’s is an excellent example of a company that has successfully diversified its business. Over the decades, they’ve adapted to changing consumer tastes.

The fast-food giant has recently focused on healthy food options such as salads, oatmeal, yogurts, and other low-calorie meals. Their strategy limits their risk and allows them to focus on what they do best.

39% of Americans are ordering healthy fast food options.

People looking for Healthy fast food options
Nowadays, more people prefer healthy meals

Final thoughts

The weaknesses in a business are sometimes easy to spot. Other times, you might not even realize you have a weakness until it’s too late. Either way, every organization needs to know its weaknesses and where it can improve. 

This is why every business should get into the habit of conducting SWOT analyses. By doing so, you can identify areas in which you can improve. We have outlined some of the most common weaknesses of organizations in no particular order. We hope this information will help you with your next SWOT analysis.

Disela Dassanayake
Disela Dassanayake
Disela is a business analyst with a passion for researching and sharing information on technical topics. He has over 15 years of industry experience in multiple domains, including industrial engineering and information technology. He has a master's degree in Engineering Management from the University of Alberta and a master's degree in Computer Information Systems from Boston University. He currently holds multiple professional designations, including PMP, CBAP, PMI-PBA and ITIL.

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