What is it?
SWOT Analysis, is a strategic planning tool used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture.
It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favourable and unfavourable to achieving that objective.
Assessing your business and where it stands in the market will not only help you decide on where you are going but also on how to get there.
Welcome to the marketer's strategic friend, the SWOT analysis.
How does it work in practice?
| || Helpful to achieving the objective|
Harmful to achieving the objective
| Internal |
(Attributes of the organisation)
| Strengths|| Weaknesses|
| External |
(Attributes of the environment)
| Opportunities|| Threats|
Strengths and Weaknesses
Look for these inside your company. What are your resources? What's the company structure? What programmes do you have in place?
Key areas to examine include:
- Sales and marketing
- Management and expertise
- Systems and resources
- Efficiency and capacity
- Products and services (What are you offering? What is the product range and quality like? How competitive is it in the market place?)
- Finances and costs
From this information, weigh up your outstanding good and bad points, achievements and failures. This will to help build up a picture of your business as it is now.
Threats and Opportunities
Now you've got an idea of your own company's standing, what about the competition?
An assessment of them will help identify external threats but an overall view of the market will also help to locate and opportunities.
Things to consider are:
- Market Trends
- Economic condition
- Joint ventures
- Strategic alliances
- Expectations of stakeholders
- Public expectations
- Competitors and competitive actions
- Bad PR
- Criticism (Editorial)
- Global Markets
- Environmental conditions
Things to bear in mind
1. Define and agree upon an objective - a desired end state. SWOTs can exist only with reference to an objective. If the desired end state is not openly defined and agreed upon, the participants will have different end states in mind and the results will be ineffective.
2. Opportunities external to the company are often confused with strengths internal to the company. They should be kept separate.
3. SWOTs are not strategies. SWOTs are descriptions of conditions, which can pave the way to strategies.
What to do next
In competitor analysis, marketers build detailed profiles of each competitor in the market, focusing especially on their relative competitive strengths and weaknesses using SWOT analysis.
Marketing managers will examine each competitor's cost structure, sources of profits, resources and competencies, competitive positioning and product differentiation, degree of vertical integration, historical responses to industry developments, and other factors.
If information is power, you will now have the power to start planning your own strategic direction.
- Build on your own company strengths
- Resolve your own company weaknesses
- Exploit opportunities identified in the market
- Avoid threats you can see coming on the horizon
What will it cost?
Done internally the financial cost should be minimal. It’s more about time than money – finding time in your own schedule or in the schedule of others to organise a getting together.
SWOT analyses are all important to better strategic planning. And more focused planning will help in delivering better results. It will help to best allocate resources in the company and use them more efficiently.
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