The SWOT Analysis tool is a great place to start when defining your marketing strategy for 2014. It offers a simple, practical, logical approach to taking a closer look at your organisation.
The SWOT Analysis tool is probably the most widely recognised tool. It helps you to assess your Strengths, Weaknesses, Opportunities and Threats. Don’t be fooled by it’s simplicity. Instead, embrace it and use it as a way to start the conversation and gain input from across all areas of your business. You’ll soon pinpoint what works, what doesn’t, and where you need to make changes.
To use the SWOT Analysis tool, businesses need to sit down and assess these four categories in detail to reveal useful, tangible information. Strengths and weaknesses are considered internal factors that a business can control, and opportunities and threats are external factors over which the company has no influence. The tool aims to produce realistic and achievable goals and give a business the opportunity to turn weaknesses into strengths and threats into opportunities.
What is the SWOT Analysis tool used for?
The SWOT Analysis tool is used to objectively analyse a company and understand what it needs to do to improve its performance in the marketplace. Strengths and weaknesses, opportunities and threats may seem obvious and straightforward ways to assess a business. Some consider the information the tool provides to be too generic to hold much value. But it’s easy to underestimate the power of the SWOT Analysis tool. It’s among the most commonly-used strategy tools for good reason. Not only does it get people to think and communicate as a team, but the tool’s true value lies in its simplicity. SWOT Analysis offers a familiar and easy-to-understand basis on which to build and apply more in-depth principles and strategies for smart marketing. In short, SWOT Analysis teaches members of a team to think the way a business should.
The trick is in using the tool correctly. Oxford Learning Lab suggests it should be applied to individual segments of the market to avoid generic outcomes of information, for example. But SWOT Analysis really comes into its own when a business acts on the findings, using the information to make informed decisions and initiate change. The elements within each category will vary for every business type but here are some examples.
Strengths – the positive attributes your company is known for. They might include:
- Positive brand recognition – perhaps your logo is well-known and associated with quality products or you’ve reached a position with great bargaining power.
- Cost advantages – you can offer great value for money.
- Skilled workforce – you have a high employee retention rate or your employees can contribute to your objectives.
- Financial resources – you’re in a strong position to continue through a weakened economy.
Weaknesses – can include:
- Poor brand recognition
- Poor reputation for customer service
- An unskilled workforce or low employee retention
- Rising costs or financial problems
Opportunities – areas for potential growth. They can include:
- Emerging technologies which suit your business
- Changing consumer preferences or trends in favour of your product
- New market opportunities
- Lower financial obligations such as relaxed government regulations
- Competitor weaknesses
Threats – are potentially destructive to your business or image. They can include:
- New competitors
- New technologies (which you’ve failed to recognise as an opportunity)
- Rising business costs
- New and costly financial or government regulations
When do I use the SWOT Analysis tool and how often?
Many good marketers recommend that the SWOT Analysis tool is used in conjunction with other strategy tools when performing business evaluations. Newer businesses often use the tool to establish their position in the market, but it’s also used by investors to identify worthwhile business opportunities.
A Community Tool Box article recommends that SWOT Analysis can also be performed any time that your business is looking to explore new avenues or find solutions to problems, clarify your decisions, determine whether changes to your business are viable, or when you need to adjust existing strategies.
The SWOT Analysis tool in practice
When undertaking strategy development work for KitCrew Camps, we completed a SWOT analysis. Findings from the activity resulted in a communications strategy that focussed on the camps greatest strengths, which happened to also be what customers valued the most. A year later, KitCrew Camps has expanded to 2 more locations and also offers Easter camps. Fantastic growth, kickstarted by a simple SWOT analysis.
Ask each of your line managers to list the strengths, weaknesses, opportunities and the threats that they feel their department faces.
Who developed the SWOT Analysis tool?
SWOT Analysis was developed in the 1960s by Albert Humphrey, American business and management consultant. According to the Professional Academy, he produced a planning method known as SOFT analysis which was later developed into what we now know as a SWOT analysis.
Every Thursday, we’ll take a look at a different strategy tool. We use a variety of strategy tools to help our clients define their marketing strategy. Essentially, the tools help you with your thinking and decision making during the strategic marketing planning process. We hope to give you a better understanding of the tools available, and how and when they can be applied.
For help developing your marketing strategy or using strategy tools such as a SWOT Analysis, get in touch. We’re here to help. Contact us on 01206 646 006.