SWOT Analysis: How to Do It?
A SWOT analysis helps you check the Strengths, Weaknesses, Opportunities and Threats to your business’s marketing strategy. These factors enable businesses to make important decisions.
After knowing these aspects, you can utilize the pros and cons of your business to leverage its strengths and suppress its weaknesses.
What is SWOT Analysis?
This framework allows you to identify the challenges and strengths of your business to devise an effective strategy from it.
While it also allows you to track merits, this tool also helps in giving a view of your marketing strategy.
Thus, allowing you to understand how effective your efforts have been and what needs to be done.
This analysis gives you hindsight on what your business does best and what it can do better.
It uses both internal and external factors in this examination of what goes on inside and outside the business that impacts performance.
Hence, the primary goal of carrying it out is to know all aspects that result in making a business decision.
It dates back to the 1960s when Albert Humphrey conducted a study to identify why corporate planning consistently failed.
Since then the framework has been enabling people to start and then grow their businesses.
It can be used before beginning your company and exploring the market or also while performing any new company activities such as changing a business plan, launching new initiatives etc.
Moreover, you can also carry out a general analysis to find out the metrics and performance of your business.
That will help in finding out the areas where your business is not working well and where you need improvement.
It will overall give the whole picture of your business.
Here you can identify what weaknesses you can improve, the threats you can eliminate, the opportunities you can leverage and strengths that can be utilized.
Importance of SWOT Analysis
The analysis helps you in discovering the dangerous blindspots present in your business and marketing model.
It helps in challenging the risky assumption of the business’s performance and gives new insights into the business’s performance.
Plus, it aids in developing the right strategy for a new situation.
Since SWOT involves analyzing the strengths and weaknesses together, you can look at them more in-depth in which one is heavier in scale.
For instance, you may already be aware of your business’s weaknesses and threats, however, they may be much more significant in comparison with your strengths.
Even if the weaknesses are heavier in scale, going through the analysis you can look into the opportunities that can leverage the strengths and compensate for any weaknesses.
It can help to identify:
- factors that impact your market such as customer satisfaction, bad promoting strategy hence failing to promote assets well or how competitors are pushing you out of the market
- identifying the weaknesses in marketing strategy, assets and ads
- allows you to see eth threats to your marketing campaigns before they realize
- aids in long-term goal setting for promotions and marketing
- gives a better understanding of the marketing channels that will be beneficial and need your focus
- allows you to expand on the strengths and opportunities that you already have
These are the benefits of the analysis, however, it also has its set of limitations and drawbacks.
This is an analysis that encourages self-reflection and honesty.
If you are not honest about your shortcomings from the beginning, there cannot be enough useful insights.
Let’s learn about these below!
One of the important aspects of the analysis is being honest about your shortcomings.
If you are only then you are capable of finding out your true strengths, weaknesses and threats.
The insights will not be as important and useful.
Moreover, it is difficult to analyze the factors that can be both a weakness or a strength.
For instance, TikTok ads can lead to higher quality leads however, they may also be of higher cost.
Therefore, they can act as a strength and weakness, blurring the line between the two.
Another example of a downside but also a benefit is how this analysis can generate too many ideas.
You may come across many opportunities to improve your marketing strategy which surely sounds fine but can also get extremely overwhelming.
Continuing on the same limitation, while it gives you information and generates tonnes of data, it may not be able to tell you how to use that data.
Moving on, this analysis is also time intensive.
This means that you need enough personnel and also have the budget to spend as much time as the analysis requires.
Not to forget, having enough time – to use the tool effectively.
Knowing the limitations beforehand can help big and small businesses to avoid them and increase their chances of success by being better prepared.
Now that you are aware of the limitations and benefits, it is time to dig into how to carry out SWOT analysis.
Doing SWOT Analysis
Doing the analysis composes of writing down all 4 characteristics.
These 4 characteristics stem from internal and external factors.
These are strength, weakness, opportunity and threat.
Let’s find out about them below!
The strengths and weaknesses of your business will be internal factors because you are usually aware of them and thy constitute the resources and material that is available to you.
The internal factors consist of:
- Human Resources: this includes employment, target audience and volunteers)
- Financial Resources: investment opportunities, funding and sources of income
- Processes: Employee resources, software for CRM and accounting and department hierarchy
- Physical resources: facilities, equipment and location
- Having access to natural resources such as trademarks, copyrights and patents
External Factors can influence the business and they may be directly or indirectly related to an opportunity or threat.
Therefore, monitoring them is important.
- Economic, politician or environmental regulations
- Trends in the market such as new technology, leading to shifts in audience needs
- Fundings in the form of donations and legislature
- Relationships with suppliers
- Economic trends on local and international level
Combining all of these factors, you can start filling up your SWOT framework.
For that, you will have to analyze each of the four characteristics separately.
Your strengths are things your organization or business does better than the rest of your competitors.
It can be the attitude of your staff, the materials you use and a good manufacturing process.
If you are analyzing a campaign then look for the elements that are working well, these will be your strengths.
Look for what your customers like about your products and services.
Also, look for lifetime value and cost per acquisition as well as conversions of your marketing campaigns.
In order to get data on your strengths, conduct a customer satisfaction survey that will help you understand how people see your business.
Also take out the camping data from different tools in one dashboard to understand the effectiveness better.
That’s not it, you should also ask your employees to get an idea of your resources and how your employees see the company.
Similarly while finding your business’s weaknesses, run through a series of questions to find out what went wrong in your campaigns that have now become your weakness.
For instance ask, that when you sell products why don’t customers purchase again?
What are the challenges in your current marketing funnel? What complaints do you often get in negative reviews?
Put your main focus on the resources, people, procedures and systems.
These are inherent features of the business so look deeply at the customer and employee surveys.
You can get the data from customer reviews that people leave on Google or Yelp, in competitive analysis and by checking the time people spend on your crucial pages in the marketing funnel.
Similarly, check exit pages in Google Analytics to see why people are leaving certain pages.
This data will help you find out the weaknesses in your website and your products.
Then you can look into opportunities to overcome them.
Opportunities and Threats
While searching for opportunities, you are looking for ways to improve on your success and eliminate your weaknesses.
It is an external factor so these opportunities may usually arise from outside your business such as new trends in technology and the market.
Though, you can also utilize the ones you are already using.
For instance, how can you use your vocal brand advocates more efficiently or can you use the most effective marketing messages on other platforms as well?
Get your data for opportunities from customer reviews, marketing blogs and industry trends.
Or this is one aspect where you can also 9introduce a completely fresh perspective.
Lastly, when it comes to threats there are several ones you can encounter.
The best way to go about them is to counter them beforehand.
- Technology trends: New technological advancements that can alter your work model
- Economic trends that impact your industry
- Target audience: is the market shifting leaving you with not much audience
- Marketing trends and how they impact your marketing strategies and campaigns
- Relationships, the impact of brand ambassadors and contractors or other people in your business and how that will impact your business if the relationship ends
These kinds of threats can be found in technology blogs with updates, competitive analysis reports, newsletters and blogs of industry experts, and also through a brainstorming session with your team.
In order to tackle them, take action before the threat takes form.
Once you have all the strengths, weaknesses, opportunities and threats obtains from your SWOT analysis it is time to apply or suppress each individually for the progress of your business.