What is SWOT Analysis?
The SWOT analysis model (strengths, weaknesses, opportunities and threats) is the most common marketing tool for structuring your marketing audits. The purpose of which is to then provide you with a critical analysis of your marketing strategy.
The strengths and weaknesses focus on the present and past activities, and also on other factors which are internally controlled, such as the 4 P’s, product, price, place, promotion.
The opportunities and threats tend to focus on the present and the future, taking a more strategic view. This results in a forecasted list of the likely externally controlled options that are available to the company.
When to use it?
If strengths and weaknesses represent ‘where we are now’ and opportunities and threats represent ‘where we want (or don’t want) to be’ or ‘where we could be’ then the gap, representing ‘what we have to do to get there’ has to be filled by managerial imagination. This will then be formalised in the body of a marketing plan.
What does it achieve?
The SWOT analysis helps to sort information systematically and to classify it. It however still needs further create interpretation to make sense of it all. It also helps;
- More effective decision making
- Improved strategic planning process
- Greater understanding of industry trends and performance drivers
- Compile a list of strengths, weaknesses, opportunities and threats; be creative and open-minded.
- Reduce the brainstorming session in step 1 down to a top five to ten ideas for each area of the SWOT analysis.
- Look at each area in detail and discuss the potential implications they might have on the company.
- Keep in mind that a SWOT analysis is compiled in order to give you a greater understanding of how your organisation can relate to its external environment.
- Now look at the internal strengths and weaknesses of the company and see how they relate to the opportunities and threats which are external to the organisation.