What is SWOT and How To Do a SWOT Analysis
SWOT is an acronym that is used by business owners to describe a business’s strengths, weaknesses, opportunities and threats. The term can be applied to marketing as well. Strengths and weaknesses are viewed by the manager as internal factors while opportunities are viewed as external factors. This means that the business can have direct impact and results on their own strengths and weaknesses by improving company practices. Opportunities and threats are external meaning that the company has little control over the factors that make them up. All four factors work together and can influence one another to have a greater effect.
A SWOT analysis is something that many companies will conduct when doing product research, marketing research or just looking for general business practices improvements. It is a strategic planning technique that takes time, analyzation and statistics to determine measurable courses of action to take from the reporting.
A marketing SWOT analysis could be used for a variety of purposes. It could be used to analyze advertising campaigns, digital marketing techniques, public relations, product improvement and much more. If your company wants to improve its marketing techniques and practices, a SWOT analysis is one of the first steps to get started in the right direction.
Strength is an internal factor that your company has. These are the capabilities and resources that your business possesses to give you a competitive advantage. It is important to be aware of these so that you can continue to capitalize on what you are good at and continue to be profitable. Examples within a marketing SWOT analysis are brand name recognition, brand loyalty, proven customer bases, superior packaging and optimized website content.
Determining a strength within marketing can be difficult. It depends on what your overall analysis is targeting. If you are conducting a SWOT for digital marketing, you may utilize Google Analytics and report on those metrics to find strengths. Other areas could include comparing your company data to the industry average and determining if it is above par.
A weakness is an internal factor that you are not performing well at. Weaknesses can be difficult to spot because some companies do not want to admit their areas of improvement. It is okay not to make it public what your weaknesses are but as long as you know internally what they are you can take action to improve them for the future. Examples of weaknesses can be realizing you are providing a similar product to the market that is overpriced or having an unreliable service within a business offering.
Once you figure out your weaknesses, you can determine the best course of action for turning them into strengths. If you see that your social media presence is weak, you can optimize the different platforms to reach more users and then track data to see improvements.
An opportunity is an external factor that you can capitalize on. In a SWOT this can be the most lucrative areas of study for marketing. These are the moves your company will take to enhance its market positioning. When a competitor creates an error or product defect, it is a huge opportunity for you to steal their part of market share and gain some customers that may be willing to switch over to your brand. Opportunities can also be more subtle so it is important to stay aware of the news and current happenings around your company and also in your market sector.
To find opportunities, stay on top of industry trends and keep a close observation of external factors like competitors, suppliers, manufacturers and relevant supply chain businesses. Culture trends and demographic shifts can also present lucrative opportunities in marketing. An example of this is Google switching to a stronger importance on Mobile indexing. This means that how your website experience is on mobile can affect the rankings and traffic you see to your site. As a marketing manager, you will want to capitalize on the opportunity by having your search engine optimization team (SEO) prepare your mobile-friendly site.
A threat in marketing SWOT can show how vulnerable your company is to its competitors or outside industry factors. Threats are an area that you want to monitor and observe closely. An example of a threat is a company that participates in traditional advertising like radio, billboards and print might be threatened by new companies entering their market who have a focus on search engine optimization, pay per click advertising, social media and digital web capabilities. To combat with a threat like this, it is critical for the company to determine if adapting to a similar strategy is the right move for the marketing of the company.
4 P’s Of Marketing
The 4 P’s of marketing are factors that are relevant to your SWOT. They are four things that you should be very familiar with and learn how they fit into your marketing SWOT analysis.
- Price – You should know the price of your service or product and how it compares to competitors and the industry average. It is okay if you are priced higher than the average, just as long as you understand why it is. Price can act as a strength or weakness since you are the one determining it.
- Product – The product is what you know inside and out. If you need to know more about your own product or service consider conducting market research to understand better how your customer base interacts with the product. Market research will help you gain the opinions and recommendations from those buying the product.
- Promotion – Your promotion strategy is a large part of marketing. Promotion can be anything from coupons, specials and sales to only dealing with select retailors to give your product a certain image. Promotion strategies can offer lucrative opportunities and should be researched to learn what will get the next customer to buy your product.
- Place – The place is where you are selling your product. Luxury items are often only found in high-end retailors and not big box department stores. Where you choose to place a product can change how the product is viewed by your customers.
Importance Of Knowing SWOT For Your Business
As a manager, CEO, CMO or any other high-level position within a company, it is paramount that you know your SWOT. If your position within the company deals with marketing or sales, then you should have an understanding of a marketing SWOT analysis.
It is important because a SWOT is what gives your business its edge on the competition. Other companies will be conducting SWOT analyses on you so to stay ahead of them you should be conducting them not only on yourself but with other relevant competitors. A SWOT can help you learn different things about your business that you may have never known otherwise. Marketing can utilize SWOT analyses to determine the most cost-effective advertising areas and campaigns.
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