The SWOT analysis has long been a valuable and useful strategic planning tool. Established by the Stanford Research Institute in the 1960s, countless organizations have wielded its power to analyze the internal strengths and weaknesses of their business as well as the external opportunities and threats in the marketplace.
Despite this marketing workhorse’s valuable contribution to our industry over the past five plus decades, many are calling for its demise. Some greener marketers may be unfamiliar with all it has to offer. Others may feel it’s simply “too old school.” However, when wrapping up the discovery (or environmental) phase of a marketing plan that includes extensive research, like stakeholder interviews, customer surveys, competitive audits, etc., a SWOT analysis can be vital. When done properly, this device cuts through the slew of information to reveal a clear-cut path to a business and/or marketing strategy.
How It Works
In a SWOT analysis, key insights are included in sound bites broken into four quadrants and displayed on a single page. It’s ideal not to get too wordy or lengthy. Just capture the factors you believe are relevant to each of the four categories. In doing so, you will have a digestible synopsis of what you need to focus on while writing the strategy section of your marketing plan.
Essentially, a SWOT analysis helps determine the pluses and minuses your organization faces as you work to achieve specific objectives or strategies. The strength and opportunity elements reflect factors that play to your favor. The weaknesses and threats highlight harmful obstacles that must be overcome before the desired outcome can be realized.
A completed SWOT analysis lays out these helpful or harmful factors into one of the aforementioned quadrants.
The strengths quadrant outlines positive attributes, tangible and intangible, that are a part of internal operations. They are within the control of your organization and cover what you do well, the resources you have, and the internal components that add value or offer a competitive edge.
Strengths may include the positive attributes of your brand and product, strong brand awareness and customer loyalty, dominant market share, and more. This section may also address the people involved in your business or more tangible assets, such as available capital, equipment, credit, existing channels of distribution, copyrighted materials, patents, information, processing systems, etc.
Weaknesses capture the negative aspects internal to your organization that detract from the value you offer or place you at a competitive disadvantage. These are areas that need to be enhanced in order to compete against top competitors in your industry. The more accurately you’re able to identify weaknesses, the more valuable the SWOT will be in determining your strategic approach.
Weaknesses are also within the control of your organization and may include lack of expertise, limited resources, lack of access to skills or technology, inferior service offerings, etc. Though your organization has control over these factors, improvement has not been a priority for one reason or another. A fact that needs to change in order for you to accomplish your marketing objectives effectively.
These are external to your organization and are the factors that exist in the market or the environment that would help your organization prosper. They reflect the potential your organization may be able to realize upon implementing a marketing strategy designed with the SWOT in mind.
Opportunities may be the result of market growth, lifestyle changes, resolution of problems associated with current situations, positive market perceptions about an organization, or the ability to offer greater value that will create a demand for a service or product.
These are factors beyond your organization’s control that could place your marketing strategy, or the business itself, at risk. A threat is a challenge created by an unfavorable trend or development that may lead to deteriorating revenues or profits.
Competition—existing or potential—is always a threat. Other threats may include intolerable price increases by suppliers, governmental regulation, economic downturns, negative press coverage, a shift in customer behavior that reduces sales, or the introduction of new technology that could make a product, equipment, or services obsolete. Part of the list may be speculative in nature, and it may be valuable to classify threats according to their seriousness and probability of occurrence.
Why It’s Important in Modern Marketing
Much of the philosophy that defines Modern Marketing is embedded within a SWOT analysis. A well-conducted SWOT analysis, that is.
One of the criticisms of this tool is that it’s akin to corporate navel gazing, bogged down by internal bias. But, in reality, a Modern Marketing SWOT relies heavily on outside perspectives to help you understand the performance of your business. In the same way Modern Marketing campaigns, strategies, and deliverables all focus on your customer, a well-done SWOT depends on this audience for insight that can lead to action. The most effective SWOT analysis is one that includes interviews and surveys with key audience segments where you learn what’s working and what’s not working from their vital perspective.
A SWOT analysis is also a great way for organizations to embrace the idea that they need to adapt to the evolving marketing landscape. By conducting a SWOT analysis through a Modern Marketing lens, you’re able to identify changes in the way you reach your customers. Changes that may prove either to be opportunities you can capitalize on or threats you need to address.
Lastly, the very purpose of the SWOT tool is to analyze and optimize the way your organization runs your marketing. This idea is a cornerstone of Modern Marketing, and a SWOT analysis is simply another way to execute on this philosophy. It allows you to synthesize a breadth of data into something you can use to help stakeholders understand how you can better refine your strategy.
In an environment where we’re always chasing after the now, newer, next, it can be easy to discard techniques and approaches established decades before. And, in some instances that makes sense. No one’s suggesting you should still be naming your company “A+ Widgets” to rank higher in the yellow pages. But, in cases like the SWOT analysis, there’s no need to throw that baby out with the bathwater (even if the new water is infused with electrolytes). Instead, we should build upon what we’ve learned in the preceding SWOT-filled decades to create an even more powerful Modern Marketing tool.