When to use SWOT analysis?
Why Use SWOT?
How to do a SWOT Analysis?
Introduction to SWOT
What is a SWOT analysis? It is a simple method of planning that compartmentalizes important internal factors (strengths and weaknesses) and external factors (opportunities and threats) that an organization faces. Simply stated, it is a highly effective planning technique to identify actions that will have a positive impact on business strategy and outcome.
The items revealed in your assessment should be looked at as more than just a list of things you hope to accomplish or may eventually find the time to develop. They are actionable results to drive specific business change. Organizations that ignore or fail to understand, evaluate and leverage their strengths, weaknesses, opportunities and threats will find themselves blindsided by trends in the marketplace and their competitors.
- View additional SWOT Analysis Resources
- Get started with a SWOT Analysis Checklist
- Download a comprehensive SWOT Template
See the SWOT Analysis infographic below.
Why Use SWOT?
- To evaluate a new product or business idea.
- As a tool to help plan marketing, sales or general business strategy.
- As a method to improve, re-evaluate, revise or correct an existing offering.
- To identify a new solution to an existing problem.
- To uncover potential business challenges.
- To proactively respond to changes and trends.
- To better understand how you and your competitors are perceived in the marketplace.
When to Use SWOT?
- As a way to identify and improve on weaknesses, turning them into strengths.
- To determine areas where opportunities exist and how best to exploit them.
- As a tool to help expose and neutralize risks and threats.
- To better understand your business environment and competitive landscape.
Types of SWOT
SWOT is valuable in gaining perspective on one’s position within an environment. It’s a high level examination often performed early in a project, not as a detailed analysis. It’s best used to understand conceptual or strategic needs instead of tactical execution. Here are some typical types of SWOT analysis:
- Business Team SWOT – A SWOT analysis performed by an executive team, product team or other business group.
- Product Launch / Re-launch SWOT – SWOT analysis is commonly used in planning and positioning a product or service offering in the marketplace.
- Business Launch – SWOT analysis helps Entrepreneurs identify opportunities and position their offering in the marketplace. It’s a key step in building a business plan.
- 3rd Party (external) SWOT Analysis – An outside inspection can often uncover gaps or deficiencies in strategy. SWOT is an effective tool to gain that external perspective.
- Marketing or Sales SWOT – From branding to differentiation, SWOT helps define messaging and the unique selling proposition (USP).
- Personal SWOT – This frequent use of SWOT analysis is to perform a self-assessment of one’s skills and career
SWOT can be applied to products and services, or departments such as sales, marketing, operations, and financial management.
SWOT as a Business Tool: Strengths and Weaknesses
While SWOT is a highly effective, simple means to gain strategic insight and develop business strategy, it’s important to understand the strengths and weaknesses of this approach. This business tool is most easily described as both simple and flexible. However those two strengths can also be liability.
First, the simple, four quadrant layout of SWOT implies that each quadrant has equal importance. Yet this is rarely true in a given SWOT analysis. For example, when looking at business strategy, opportunities and strengths often far outweigh the importance of weaknesses. Reversing this logic, the opposite may be true when looking at a product relaunch.
Second, it’s not always a straightforward task to transform the results of a SWOT analysis into measurable actions. One challenge is narrowing the list of items in each quadrant to a reasonable number of items where the resulting actions can realistically be addressed.
Getting Started with SWOT
How does one do a SWOT analysis? For each of the four quadrants, identify and rank the points that best describe your situation. It’s often best to prioritize and limit the number of items in each quadrant to keep the SWOT analysis manageable.
Strengths – These represent internal factors (tangible or intangible) that are within your control which impact your organization. Following are examples of questions you could ask to determine your strengths.
- What are one’s internal strengths or areas of excellence?
- What areas are most profitable to your business?
- What types of resources are available to you? (i.e., people, technology, reputation, skills, education, etc.)
- Where does one have a unique advantage or significant head start?
- What things are exclusive to your organization that add value or give you a competitive edge?
Weaknesses – Are also within your control, but these factors prevent you from successfully maintaining a competitive edge. Look for things you can do that will aid in achieving your business objective. Following are examples of questions that will help determine your weaknesses.
- What areas leave you most vulnerable?
- Which areas of your business cost you the most time and money?
- What things within your control can you improve on?
- What factors create a competitive disadvantage for you?
Opportunities – Are factors external to your business that when identified will help you understand the market and environment and position you to profit from areas exposed. Following are sample questions to help you determine areas of opportunity.
- Where can we take advantage of market trends?
- Are we using our resources effectively? (i.e., technology, people, skills, etc.)
- Where can we exploit our strengths and the competition’s weaknesses?
- Do any products or services offer new opportunity for growth?
- How are we perceived in the marketplace?
- How is our competition perceived in the marketplace?
Threats – These are factors outside of your control that represent risks to your business and strategy.
- Which competitors are coming on strong?
- How will economic issues impact our ability to thrive and expand?
- Where are market trends working against us?
- What are the greatest risks presented by competitors, marketplace trends including consumer behavior?
The Right B2B Marketing Strategy for Your Business
There’s no question that the right marketing strategy for your business will depend on your brand, your business capabilities, your solutions, and most importantly, your market. But knowing the distinct trends can and should influence your marketing priorities.
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