How to Undertake the Perfect SWOT Analysis
In the world of marketing, a SWOT analysis doesn’t mean Special Weapons and Tactics teams based in the United States (although that would be rather exciting). It’s an acronym for Strengths, Weaknesses, Opportunities and Threats, it is a tool commonly used by businesses when planning for the future planning.
A SWOT analysis is used to highlight both internal and external factors affecting the business. The Strengths and Weaknesses are Internal, whilst Opportunities and Threats are External.
Strengths and Weaknesses within a SWOT analysis
With a SWOT analysis (as opposed to a TOWS: Threats, Opportunities, Weaknesses, Strengths), we start by looking at the internal factors first.
Strengths can be identified by asking what advantages the organisation has and what its unique selling proposition (USP) is. It is important to consider what others see as your strengths, for example, a brand name, patient or a workforce with a particular skill set.
Weaknesses will focus on what the organisation could do to improve, what you should avoid (be it due to brand name/reputation, resource etc.) and what factors ultimately lose your organisation’s sales.
When identifying strengths and weaknesses, it’s important to compare your organisation to its competitors. Some of your proposed strengths could be a necessity in your organisation’s market and therefore not actually a strength.
Lack of honesty is a common pitfall in undertaking a SWOT analysis, so it is important to remember this is an internal document that is being used to critically assess your current position. Utilising factual information will ensure that a high-quality output is achieved.
Opportunities and Threats within a SWOT analysis
Once you’ve identified the internal factors, you need to move onto the macro factors – these are external opportunities and threats. You can use a PESTEL analysis to ensure you’ve covered all the factors.
For the opportunities section, you need to identify what good opportunities are open to your business and some of these will come via the organisation’s strengths. You may find that through the PESTEL analysis, you identify some interesting trends. For example, in a change in government, how does the outcome create opportunities or challenges for the organisation? Or, a downturn in the economy, how could this present challenges for a luxury goods retailer?
And finally, your SWOT analysis should assess any threats. What are the threats facing the organisation right now, and what are competitors doing? For example, how is developing technology affecting the industry and therefore, the organisation?
How often should you conduct a SWOT analysis?
The frequency of conducting a SWOT analysis should align with the dynamics of the industry and the pace of internal changes within the company. In fast-paced industries, such as technology or fashion, it might be necessary to perform a SWOT analysis more frequently, to keep pace with rapid market changes. In more stable industries, a semi-annual or annual analysis might suffice.
Additionally, it’s advisable to conduct a SWOT analysis whenever there is a significant shift in the business environment, such as a new competitor entering the market, a change in consumer preferences, or regulatory changes. Regularly updating a SWOT analysis ensures that marketing strategies remain relevant and effective, allowing businesses to adapt quickly to changing environments and maintain a competitive edge.
If you are interested in learning more about how to undertake a SWOT analysis and how it can be used within a strategic marketing plan, why not consider the CIM Diploma in Professional Marketing. This marketing qualification is ideal for professionals who want to develop their knowledge and practical knowledge in marketing and marketing strategy. For more information on how to apply, simply get in touch with our team.