What can businesses do to effectively prepare for external threats identified in a SWOT analysis?

Developing contingency plans and risk management strategies is essential for businesses when preparing for external threats identified in a SWOT analysis. This proactive approach allows organizations to anticipate potential challenges and formulate effective responses, enhancing their ability to mitigate risks and maintain stability. By creating structured plans, businesses can outline specific actions to take in various scenarios, clarify roles and responsibilities among staff, and establish communication protocols to ensure a coordinated reaction.

In contrast, strategies such as simply increasing prices do not address the fundamental issues posed by external threats and could alienate customers. Focusing only on internal improvements disregards the external environment and may leave a business vulnerable to risks. Increasing marketing efforts without thoughtful analysis may waste resources without addressing the real concerns derived from the identified threats. Thus, developing contingency plans and risk management strategies stands out as a comprehensive and informed approach to prepare for external challenges effectively.