Mistake 10: Confusing Risks, Issues, and Threats

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When you mix up ongoing issues, future risks, and external threats in your SWOT analysis, your strategy becomes muddled before it even begins. The result? Action plans based on a faulty mental model of what’s really happening.

As someone who’s led or audited hundreds of SWOT sessions across industries, I’ve seen this mistake repeatedly. A team will list “supply chain delays” as a threat—when it’s actually a persistent issue. Another will label “rising competition” as a risk, when it’s a clear, present threat. The confusion isn’t just semantic—it distorts your strategic thinking.

This chapter cuts through the noise. You’ll learn the real difference between threats, risks, and issues—and how to keep them in their proper place. You’ll get clear phrasing templates, a simple decision tree, and practical guidance on where to document each type of concern.

By the end, you’ll no longer be guessing what category a factor belongs in. You’ll have a reliable, repeatable method that supports clearer decisions, better documentation, and less group debate.

What Are the Real Differences?

Many teams treat “threat” as a catch-all for anything bad. But in strategy, precision matters. Let’s define the three categories clearly.

1. Issues: Problems You’re Already Facing

Issues are current, ongoing challenges that your organization is actively dealing with. They’re not hypothetical—they’re real, measurable, and often require immediate attention.

Examples:

Customer complaints about delivery delays have increased by 40% in the last quarter.
Two key engineers have left the team without replacement.
Internal audit found 30% of client onboarding forms are incomplete.

These are not threats. They’re problems you’re already managing. If you claim “high employee turnover” as a threat, you’re mislabeling an issue—and missing the real strategic risk behind it.

2. Risks: Potential Future Problems That May Happen

Risks are future events with uncertain outcomes. They’re not yet occurring, but they could happen—often due to unknowns or external dependencies.

Examples:

A delay in the new supplier’s certification could delay product launch by three months.
Regulatory changes in Q3 might require a costly compliance overhaul.
Our market share could drop if a competitor releases a better product next year.

Risks are about probability and impact. They’re not certain, but they’re worth monitoring. If you’re not tracking them, you’re leaving blind spots in your strategy.

3. Threats: External Challenges That Are Already Real

Threats are external forces that are already affecting your organization or market. They’re not speculative—they’re real, measurable, and often outside your control.

Examples:

A major competitor has launched a new product at a lower price point.
New government regulations on data privacy have gone into effect.
Customer demand for legacy products has declined by 25% over the past year.

Threats are not “could happen.” They are “are happening.” Confusing them with risks leads to delayed action. If you label “competitive pricing” as a risk, you’re downplaying the urgency. The threat is already here.

Why Confusing Them Causes Strategic Failure

Mixing these categories creates decision paralysis. When a team lists “rising competition” as a risk, the response is often: “We’ll see.” But when you label it as a threat, the response becomes: “We must respond now.”

Here’s a real example from my work with a SaaS company:

They listed “new entrants offering lower-cost alternatives” as a risk. But the market data showed these competitors had already captured 12% of their customer base in six months. This wasn’t a risk—it was a threat. By mislabeling it, they delayed their response by three months.

When you confuse risks and threats, you:

Underestimate urgency.
Defer action without realizing it.
Fail to build contingency plans for real threats.
Waste time discussing hypotheticals instead of real problems.

How to Correctly Phrase Threats in SWOT

Clarity starts with language. Avoid vague or passive phrasing. Use active, present-tense statements that reflect reality.

Weak phrasing (confusing):

“Potential increase in competition.”
“Risk of new entrants.”

Strong phrasing (clear threat):

“New entrants have captured 12% of our customer base in the last six months.”
“A direct competitor has slashed pricing by 30% in our core market.”
“Regulatory changes in 2024 have increased compliance costs by 18%.”

Use the following rule:

If it’s happening now, it’s a threat. If it might happen, it’s a risk. If it’s already happening and you’re dealing with it, it’s an issue.

Decision Tree: Is It a Threat, Risk, or Issue?

Is it already affecting the business? If yes → Threat.
Is it not occurring but could happen? If yes → Risk.
Are you already managing it? If yes → Issue.

Apply this to every item. It takes a few seconds—but prevents hours of misalignment.

Where Should You Document Each Type?

Keep SWOT focused on strategic external factors. Don’t let it become a dumping ground for all problems.

SWOT Quadrant: Keep only threats in the “Threats” box. No issues. No risks. Just real, external challenges.

Other documents: Move issues and risks to separate registers:

Issue Register: For ongoing problems requiring operational fixes.
Risk Register: For potential future events to be monitored and mitigated.

This separation keeps your SWOT clean, credible, and focused on strategic insight. When stakeholders see a clean, well-structured SWOT, they’ll trust your analysis more.

Don’t underestimate the power of structure. A simple shift—moving risks and issues out of the SWOT matrix—can make your strategic planning dramatically more effective.

Key Takeaways

Threats are real, external, and already happening. They demand immediate strategic attention.
Risks are uncertain future events. They need monitoring, not immediate action—but must be tracked.
Issues are problems you’re already managing. They belong in operational workflows, not SWOT.
Use clear, active language to avoid confusion. “X has increased” is stronger than “potential increase in X.”
Keep SWOT clean. Only include threats in the “Threats” quadrant. Move issues and risks elsewhere.

By mastering this distinction, you’re not just avoiding a common mistake—you’re building a foundation for honest, forward-looking strategy.

Frequently Asked Questions

What’s the difference between risks vs threats SWOT?

Threats are real, external challenges that are already affecting your business—like a competitor’s new product or new regulations. Risks are potential future events with uncertain outcomes, such as a supplier delay or a market downturn. Confusing them leads to poor prioritization.

How do I avoid issues vs threats analysis confusion?

Ask: “Is this already happening?” If yes, it’s a threat. If it’s not yet occurring but could happen, it’s a risk. If it’s a problem you’re already addressing, it’s an issue. Use this simple rule to keep your SWOT focused and accurate.

Can a risk also be a threat?

Not in the same context. A risk becomes a threat once it materializes. For example, “a competitor might launch a cheaper product” is a risk. Once they do, it becomes a threat. In SWOT, you should only list the threat—after it has occurred.

Should I include risks in my SWOT matrix?

No. Only include threats in the “Threats” quadrant. Risks should be tracked in a separate risk register. This keeps your SWOT focused on strategic, real-world challenges—not hypotheticals.

What if my team insists “our biggest risk is losing market share”?

Challenge the framing. If market share is already declining, it’s a threat. If it’s a possibility, it’s a risk. Use evidence: “Our market share dropped 8% last quarter.” That’s a threat. Labeling it as a risk downplays urgency.

How do I explain clear threat definition to my leadership team?

Use a simple example: “A new competitor has launched a product at 20% lower price. That’s not a risk—it’s a threat. We must respond now.” Frame it as a strategic imperative, not a possibility. This shifts focus from “what might happen” to “what is happening.”

Remember: truth is the only foundation for growth. When you get the definitions right, your strategy becomes more honest, actionable, and effective.