What is SWOT analysis?
Before we get into the importance of SWOT analysis, let’s break down exactly what it is. SWOT is an acronym that stands for strengths, weaknesses, opportunities, and threats. These four factors are essential to any marketing plan. Strengths and weaknesses focus on your company’s internal factors, while opportunities and threats concentrate on the external factors that affect your business.
Beyond internal and external factors, using SWOT analysis helps you get realistic about how your company is doing, identify where it fits in the marketplace, and anticipate the trends within the category. Let SWOT be your marketing Gandalf to guide you through the dangerous Mines of Moria into the peaceful Shire of marketing bliss. Lord of the Rings reference? (Yeah, we just wanted to see if you were still paying attention.)
Now, let’s get into it!
Strengths: What’s your flex?
The best way to evaluate your company’s strengths is to ask the simple question: What are you doing well? Once you identify your strengths, you must compare them with the competition in order to define your key differentiators.
Let’s say you have a loyal customer base, or strong channel partners, or even a great name or brand. These are strengths to call out in your SWOT analysis.
To undercover your strengths, look into your organization’s:
- Competitive advantages
- Top performers (products, services, etc.)
- Customer engagement and satisfaction
- Internal culture
Weaknesses: The unstable Jenga blocks
The unstable Jenga block is the one that makes the whole tower fall. Weaknesses play a critical role in the SWOT analysis. When looking internally to determine your pain points, you can address the areas you need to improve so you’re aware of the attributes to exclude when drafting positioning.
Let’s say there’s a high turnover at your organization – you’d want to avoid calling attention to this on your job posting sites and dedicate resources to improving morale with company culture initiatives.
Find your weaknesses by analyzing:
- Needed improvements
- Underperforming products or services
- Marketing analytics (i.e. website traffic, social media performance, ad data, etc.)
- Constructive feedback from your staff, customers, and partners to uncover areas that need attention
Opportunities: How can you stand out?
Moving on to the external SWOT factors! After compiling your strengths, it’s time to look at the opportunities that could help your business thrive. For example, if you run a boutique on Etsy that makes organic skincare products, an opportunity for your business to gain exposure may include vending at local farmer’s markets.
When researching opportunities explore:
- Market trends
- Alternate selling territories
- Unique ways to reach potential customers
- Business expansion
- Additional target audiences
- New product or service offerings
Threats: Threat level midnight
The last external factor in SWOT analysis is threats. Threats are factors that could negatively influence the success of your business. Much like strengths and opportunities, there can be parallels between threats and weaknesses. Using the example of high employee turnover, your company might be threatened by competitors who have low turnover and look more appealing to candidates online. From there, you must brainstorm ways to get ahead of competitors in this space.
To survey your threats, ask:
- What does our competition do better?
- Are there any rules/regulations stopping us from succeeding?
- What market trends could harm our business?
Strategic planning and SWOT analysis
Your SWOT analysis will help you identify and address some of your organization’s greatest needs and opportunities. Be thorough, listing as many things as you can, and then consider the actions you can take to move forward.
It doesn’t matter if you’re conducting a SWOT analysis to determine a strategic direction or utilizing it as a foundational piece of your marketing plan. Every marketer should consider using this helpful exercise to hit ‘start’ or ‘reset’ their goals.