The Definitive Guide to the SWOT Analysis
A SWOT analysis is a framework used in strategic planning. It provides you with the knowledge to create plans to improve your business. SWOT is an acronym for Strengths, Weaknesses, Opportunities and Threats. It is a critical strategic planning tool used to isolate an issue, conceptualize a workable solution, and then remove that issue as an ongoing concern.
Fictitious Company SWOT Analysis Example
In our fictitious company swot analysis example below each heading has four distinct bullet points. These are used to clarify the internal and external factors and their relevance to the business’s operations.
Completing the SWOT analysis is a good way to ensure that the action plan coming from the SWOT analysis has the greatest chance at success. First, we’ll review our fictitious company SWOT analysis and then we’ll review the individual action plan that emerges.
Putting Together the Action Plan
Businesses must be honest in their assessment of their company’s strengths and weaknesses. Unfortunately, it’s natural to focus too much on what we do best and not enough on what needs to improve. Do not allow that to happen. Take the time to be honest with where your company needs to improve.
- Company Strengths: This could be used to combat those threats in the market where competing technologies may make the company’s product offering obsolete.
- Eliminate Weaknesses: The company should focus on eliminating its weakness of long delivery times and;
- Capitalize on Opportunities represented by the market’s growth. After all, the company can’t close orders if it takes too long to ship finished goods.
- Minimize Threats: The company might work on its weakness of high manufacturing costs in order to make sure the threat posed by its competition is minimized.
The SWOT analysis forces everyone to clearly define those internal and external attributes the company must confront. Success implies the company will capture its opportunities while eliminating its threats.
The SWOT analysis examples of 3 companies including Amazon, Apple and Wholefoods can help you:
- optimize performance,
- maximize potential,
- manage competition, and
- minimize risk.
SWOT examples are important for planning something as small as introducing a new product or service or something as large as a merger or acquisition.
SWOT Analysis for Marketing
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.
A SWOT analysis for marketing 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.
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.
Step 3: 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.
SWOT Analysis for Marketing Example
Let’s say that part of your analysis 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.
Translate Your SWOT Analysis into Actionable Strategies:
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 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.