6.05 – Conducting Proper SWOT Analysis
Understanding your position in the market is essential for growth and success. To do this, you must continuously evaluate your:
- Strengths
- Weaknesses
- Opportunities
- Threats
The SWOT analysis has remained relevant over the years because markets and consumer behaviours are dynamic. Regularly updating your SWOT analysis ensures you stay competitive and can adapt to changes in the market. Conducting a SWOT analysis for your business and your top competitors simultaneously helps you see how your strengths stack up against theirs.
Finding Your Strengths
Identify the strong points of your products, brand image, and marketing programme. Your strengths are key to your future success and can include:
- Product innovation
- Price for value delivered
- Customer service policies and practices
- Location
- Unique experience beyond your product
- Brand reputation
Your brand slogan, campaign taglines, positioning statements, value and mission statements, creative presentations, and sales pitches should all communicate and support your strengths. Outline actions to build on these strengths to enhance your overall brand.
Addressing Your Weaknesses
Pinpoint areas where your products, brand image, and marketing programme are relatively weak. Examples of weaknesses include:
- Higher prices due to lower economies of scale compared to competitors
- A shallow product line
- Fewer features than competitors’ products
- Fewer distribution points than more established competitors
- A reputation for not delivering on promises
Document strategies to improve these weaknesses. Set goals and timeframes to address these issues to prevent them from becoming crises.
Looking for Opportunities
Opportunities can present themselves in various forms. Common opportunities to consider in your SWOT analysis include:
- New growth markets
- New communication or distribution channels
- Potential partners for collaboration or bundling
Seek to create opportunities for your brand. For example, position your experienced executives as authorities in the field by having them speak at events or author guest columns. Collaborate with organisations and complementary companies to host events, tap into each other’s networks, and add value to each other’s businesses.
Consider opportunities in areas such as:
- Data: Build a strong database of contacts in your space to generate meaningful conversations with prospects.
- Experts: Hire innovators from diverse backgrounds to accelerate product development and niche marketing.
- Customer Satisfaction: High customer satisfaction rates can lead to more case studies, customer reviews, and referrals among qualified prospects.
Think of opportunities from multiple angles: those that exist, those you can leverage, and those you can create. Then, seize the day!
Focusing on Functional Alternatives or Threats
A threat is any external force that can reduce your sales or profits or make it difficult to achieve your growth goals. Common threats include:
- New technologies creating new competitors
- Large competitors that can outspend you
- Economic or demographic shifts that cut into your customer base
Threats can also include rising operational costs leading to mergers and acquisitions, leaving small companies vulnerable to takeovers.
Functional alternatives are products that aren’t exactly the same as yours but perform similar functions and are designed for the same outcomes. For example, digital asset management platforms, content management systems, and marketing resource management systems all aim to enhance efficiencies in content creation and distribution. Uber is a prime example of a functional alternative that disrupted the taxi industry.
Evaluate how your products compare to functional alternatives and build action items into your marketing plan. Consider:
- Which business category best describes your current position?
- Which category best describes where you aspire to be for maximum long-term profitability?
- Where do you currently fit in your primary category? If ranked on a best-in-class product list, would you be a leader, challenger, niche player, or visionary?
Mapping Out Your SWOT Grid
Create a SWOT analysis grid to compare your strengths, weaknesses, opportunities, and threats to those of your competitors. Collect comprehensive information about your competitors, including:
- Company: Market perception and key product
- Key personnel: Managers and employee count
- Financials: Cash position and sales over the last two years
- Sales, distribution, and pricing: Primary sales channel, pricing structure, and market share estimate
- Product/service: Strengths and weaknesses
- Promises and claims: Benefit, value, performance, and quality comparisons
- Promotions and offers: Promotional strategies and their impact on your sales
Armed with this information, you can create a thorough competitive SWOT analysis to help you stay ahead and make informed strategic decisions. This preparation positions you to respond quickly to market changes and seize opportunities before they disappear.
