SWOT Analysis Marketing

Marketing SWOT Analysis

Strengths, Weaknesses, Opportunities, Threats

SWOT Analysis

Internal Assessment

  • S

    Strengths provide an area to list everything done right either individually or as an organization.
  • W

    Weaknesses are aspects of your business that place you at a competitive disadvantage.

External Assessment

  • O

    Opportunities are factors that represent why your business is likely to prosper.
  • T

    Threats are factors beyond your control that could place your business at risk for failure.

When you’re ready to create or update your marketing strategy, what is the first thing you should do? Evaluate your budget? Review your products/services? Update your marketing metrics? Identify your buyer personas? Profile your competitors?

Those are all things you need to do, but you first need a framework for understanding how your business fits in relation to its customers and competitors. An excellent approach for defining that framework is to perform a SWOT analysis for marketing. It will give you the insight you need to become more competitive and help your business grow.

What is a Marketing SWOT Analysis

SWOT analysis stands for Strengths, Weaknesses, Opportunities, and Threats. Businesses have seen the benefit of conducting a SWOT analysis since Albert Humphrey of the Stanford Research Institute created it in the 1960s. It provides you with the knowledge to create plans that will:

  • Make the most of your strengths
  • Minimize or eliminate your weaknesses
  • Recognize all of your opportunities
  • Avoid your threats

Strengths and weaknesses refer to things within your business that affect your ability to compete. For example, your business may strong because you have a large market share. But, your business may be weak because you haven’t established a robust social media campaign that would help you expand your market share.

Opportunities and threats are things outside of your business. They aren’t under your control, but you can make plans to take advantage of opportunities and evade threats in your marketplace. For example, you may see an opportunity in the huge projected market growth for your industry. But, you may be threatened by a wave of new competitors entering your market.

Why Do a Marketing SWOT Analysis

A marketing SWOT analysis helps you understand internal and external factors that will have the biggest influence on whether or not you reach your marketing goals.

The biggest mistake managers make is “trusting their gut.” It doesn’t matter how long you have been in business or how well you know your market, you need facts to make business decisions. Besides that, things change and in today’s business environment, they’re changing faster than ever.

A SWOT analysis isn’t something you do once. You can use a SWOT analysis whenever you need to make decisions about marketing, your workforce, your product line, or any other component of your business.

Benefits of a SWOT Analysis

Completing a SWOT analysis for marketing provides a range of benefits, including:

  • A visual reference that describes your business’ marketing outlook when you present your analysis in a grid–one sector for each of the four analysis factors
  • The opportunity to brainstorm to identify the internal and external factors that you need to address
  • A structure for generating new ideas and strategies
  • A roadmap for gathering information that can be fine-tuned with input from internal and external experts

How to Complete an Effective Marketing SWOT Analysis

Step 1: Identify Your Strengths and Weaknesses

Look at the Strengths and Weaknesses within your own organization. Consider your skills, resources, and performance based on your existing marketing strategy. Consider global factors like:

  • Financial resources to support marketing operations
  • Physical resources such as your facilities and equipment
  • Human resources such as number of marketing employees, their roles, and level of expertise
  • Current processes that are in place to perform marketing tasks and the tools to support them

Step 2: Evaluate Marketing Activities

  • The effectiveness of your website and social media activities
  • Where you rank for critical keywords in the search engines
  • The effectiveness of your content marketing strategy
  • The reputation of your firm in the industry
  • Your relationships with internal stakeholders, customers, and vendors
  • The effectiveness of your marketing materials
  • The effectiveness of your product mix
  • Your product margins
  • Your ability to gather and analyze performance data
  • Your ability to gather and analyze data related to your customers’ experience, reviews, and feedback
  • Your ability to respond to market changes

Deciding whether to name each of these factors as Strengths or Weaknesses is the next step. It’s crucial to include internal stakeholders in brainstorming sessions. For example, you may be proud of the company’s website. But, if the website isn’t producing a steady flow of leads, it needs to be labeled a weakness.

This is an opportunity to evaluate the website’s design to find opportunities for improvement.

Keep Your Competitors in Mind

As you make decisions about your Strengths and Weaknesses, always keep your competitors in mind. Let’s say that one of your products is the result of a significant amount of research and development and it made a big splash when it hit the market. But, if that was two years ago and your competitors are coming up with products that outshine your shining star, make sure you include that intelligence in your analysis.

Almost anything that you consider a strength of your company must be something that surpasses your competition. Also, keep in mind that the only opinion that matters is the customers’. For example, if potential customers aren’t contacting you from your website, they’re undoubtedly contacting one of your competitors. It’s another solid reason to reevaluate the website’s design.

Identify Your Opportunities and Threats

During this part of the analysis take a look at the following.

  • Market trends
  • Economic Trends
  • Political, environmental and economic regulations
  • Competitors’ strengths and weaknesses
  • Customer expectations
  • New technologies
  • Distribution channels
  • Marketing channels
  • Market regulations
  • Advertising costs
  • Underserved markets

Every industry is different, but the forces that drive profitability are similar.

1. The Power of Buyers

A group of customers can use their buying decisions to force prices down or to get more service at the same prices. Buyers are most powerful when:

  • the number of buyers is greater than the number of businesses serving them
  • products are undifferentiated
  • products cost the buyer a significant amount
  • there are few costs for switching vendors

You can see a good example in the airline industry. Travelers are rarely loyal to a particular airline and budget airlines are catering to the customers’ demand for low prices.

2. Threat of New Entrants

New competitors entering a market are always a threat. New competitors can force you to keep your prices down and increase your budgets to keep existing customers. The size of the threat depends on the strength of the potential competitor. If the competitor is a well-established company entering your territory for the first time, the threat is larger than if the new entrant will need to start at the beginning to gain visibility in the market, develop marketing channels, and more.

The airline industry provides a good example of this. New airlines can often be tough competitors because their staff is new and usually costs less than seasoned workforces in established airlines. In addition, a new airline will have newer airplanes that cost less to operate.

3. Threat of Substitute Products or Services

A business can suffer when a new product or service meets customer needs in a different way. Substitutes are the most threatening when they are cost-effective and the cost of switching is low. For example, businesses are now using videoconferencing much more than they previously did because of COVID-19. In April, Zoom’s daily active users jumped from 10 million to over 200 million in 3 months.

4. Rivalry Among Existing Competitors

Intense rivalry among competitors will tend to drive down prices and profits. Competitors see the most rivalry in an industry when:

  • There are many competitors that have about the same market position
  • The industry is growing slowly
  • Barriers to exiting the industry are high
  • Fixed costs are high meaning that competitors can cut prices without taking on additional overhead
  • Competitors aren’t familiar with one another

An easy example of this situation is an apartment building competing for tenants. An apartment building has fixed costs that don’t go down if apartments are vacant. Apartment managers tend to be fierce competitors, not only on price, but also on matching amenities with their competitors.

Translate Your SWOT Analysis into Actionable Strategies

Your SWOT analysis isn’t worth anything if you don’t turn what you learned during the analysis into actionable strategies and tactics.

SWOT Analysis Example and Presentation

You can present the results of a SWOT analysis in a grid or in columns. You can create a four-sector grid and separate your Strengths, Weaknesses, Opportunities, and Threats into each of the four sectors. You can also use four columns to identify each of the four factors.

The SWOT presentation needs to be short and to the point to facilitate analysis. Review the information you’ve gathered, remove redundancies, and eliminate any unnecessary information or detail. Use bullet points that you’ve boiled down to their essence. For example:

  • Wrong: Our website is set up properly to attract visitors and we receive leads from 10 percent of our visitors.
  • Correct: Website conversion rate is 10%

Create Actionable Strategies

Your challenge here is to identify the links between the sectors that will lead you to a new marketing strategy or tactic. For example, you can ask yourself these types of questions:

  • How can I use Strengths to leverage the Opportunities?
  • How can I use Strengths to offset or evade the Threats?
  • How can I minimize or eliminate Weaknesses to prevent them from standing in the way of the Opportunities?
  • How can Opportunities help me to minimize Weaknesses?
  • How can I avoid having Threats prevent me from taking advantage of Opportunities?
  • How can I minimize or eliminate Weaknesses to prevent them from leaving me vulnerable to the Threats?

As you discover these connections, you can turn them into strategies. For example, assume that part of your SWOT analysis for Marketing produced these results:

  • Strengths: You have no trouble getting marketing dollars for any campaign that produces results.
  • Weakness: You haven’t taken advantage of social media marketing.
  • Opportunity: You could aggressively take advantage of the growth in your industry.
  • Threat: You have emerging competition from extremely internet-savvy competitors.

You might develop the following strategy:

  • Use your marketing budget to create a robust social media marketing campaign and track results. This would use a Strength to offset a Weakness. It would also allow you to leverage the Opportunity for growth and reduce the Threat from emerging competitors.

Once you’ve identified all the possible connections, you’ll need to prioritize your alternatives. For example, a connection other than the one shown above may produce better results, and require less money to implement.

When you’ve completed your SWOT for marketing project, you’ll have learned a lot about your company’s marketing, from unrecognized strengths to hidden threats. You’ll find that you have better insight into how your marketing activities will help the business as a whole. And, you’ll have all your stakeholders on the same page and agreeing to a set of strategies for reaching your marketing goals.

A SWOT analysis is essential to you digital strategy marketing plan.

  • Strengths

  • What are your business advantages?
  • What are your core competencies?
  • Where are you making the most money?
  • What are you doing well?
  • Weaknesses

  • What areas are you avoiding?
  • Where do you lack resources?
  • What are you doing poorly?
  • Where are you losing money?
  • What needs improvement?
  • Opportunities

  • Any beneficial trends?
  • Niches that competitors are missing?
  • New technologies?
  • New needs of customers?
  • Threats

  • Obstacles to overcome?
  • Aggressive competitors?
  • Successful competitors?
  • Negative economic conditions?
  • Government regulation?