In order to effectively market a business, it’s necessary to understand all of its strengths and weaknesses. This should encompass an examination of all of the business’s processes, ideally, as well as its customers and its competitors. For many years marketers have used what’s known as a SWOT analysis to help them to do this and to spot new opportunities.
A SWOT analysis is:
S – Strengths
W – Weaknesses
O – Opportunities
T – Threats
In order to perform a successful analysis, it’s necessary to work through a list of all of the different parts of the business. You should, where appropriate, get a team together who understand different aspects of company performance and aim to pull together knowledge from different departments in order to gain a clear picture.
Key areas to examine and gain insight are:
This will vary depending on the type of business, but the more people that work in the business that you can speak to, the easier it is likely to be to identify key strengths and weaknesses. Understanding the goals of the business is also key in identifying where improvements can be made.
You will also be looking at competitors and deciding if they have the edge when it comes to the services or products that they offer. You may of course discover that it’s your business that has a competitive edge too.
You’ll need to know as much as possible about the day-to-day running of the business and the people and other businesses that affect it. You can use a PEST analysis to really drill down the broader environment if necessary too.
P – political and regulatory – are there any new laws or regulations coming into play that could affect the way that your business operates?
E – economic – how does the economy affect the business?
S – social and cultural – are there are social or cultural trends that affect how your customers use your products or services?
T – technological – what available technology are you using, is there better out there that could help cut costs and boost productivity?
This is useful for reaching an understanding on how the business is performing and what factors both within and outside of your control will impact it. Essentially, it gives you a strong platform from which you can better analyse SWOT.
Getting Started with SWOT Analysis
As discussed, it’s best to get as much feedback as you can from other employees so that you can gain a deeper understanding about the places where people feel the business might be underperforming. You can also conduct customer surveys to gain further insight from the people who really matter.
A SWOT analysis can be highly sophisticated and can make use of software, or it can be a simple exercise that you undertake to better exploit market opportunities. It can be sketched on a piece of paper, or you can hire a professional firm to carry it out for you. There’s no real set formula and how you use it will depend on your goals. By understanding both the strengths and weaknesses of the business, you can manage and eliminate those threats that might otherwise catch you out.
Strengths and weaknesses are generally internal to the business, whilst opportunities and threats usually exist as external factors. SWOT is also sometimes referred to as Internal-External analysis or an IE Matrix.
Sample Questions – Strengths
- What is your business’s USP?
- What do employees see as being a strength of the business?
- What do customers think of your products/services and how you deliver them?
- How do you close a sale?
- What resources do you have that your competitors don’t?
You should also refer to previous marketing materials to help you with this. For example, in your brand persona, it’s likely that strengths of the businesses and certain characteristics have been identified before. Study these and ask yourself if these have improved or if they are still relevant.
- How could you improve?
- What should you avoid in your day-to-day business dealings?
- How are consumers/customers likely to perceive your weaknesses?
- How do you lose sales?
For both strengths and weaknesses you should try to include the feedback from customers. Be open-minded and honest so that you can really drill down how your customers feel about the company. If, for example, you’ve seen more or less complaints this year, then look at how this has been addressed and what has improved. This is not the easiest part of the exercise, as it’s often very difficult to be objective, but it is very necessary.
- What opportunities have you identified in the market?
- there any trends that you can maximise on?
If you’ve carried out a PEST analysis, this is where it can be useful for understanding cultural shifts and trends. Other opportunities might exist in areas that you haven’t considered yet. For example, recent changes to Google algorithms mean that it’s now essential to have a site that’s optimised for mobile. If your company offered web design, then an opportunity exists to redevelop existing customer websites for mobile.
- What are your competitors doing that your business isn’t?
- Are the company finances healthy, with no cash flow issues?
- Is your marketing budget enough to effectively market your products?
- Could you use cheaper suppliers?
- Could you leverage technology to cut costs without a huge outlay?
Again, your PEST analysis can help you to identify external threats, such as changing regulations which might force the business to spend large sums on adhering to them.
Once you’ve done this, trim down the list and prioritise things that you see to be a potential problem or opportunity. This is a vital step in honing down the analysis in order to more effectively understand how you can reach your goals and streamline processes.