A SWOT (Strengths, Weaknesses, Opportunities Threats) analysis is a great way to consider how you compare to the competitors in your market. It is one of the primary methods you can use to prompt the major issues which face your business now and into the future. It is one of the key components of any marketing plan.
So what is a SWOT analysis? It is the review of what the company or product is good at (strengths) not good at (weaknesses) what could potentially happen with some changes to the company or product or market, opportunties and threats.
A SWOT analysis definition for developing a marketing plan is also known as a Current Situation Analysis (situational analysis). This is an important point to start with. You need to consider your business right now, not as you might like it to be but as it actually is. This is the current situation. Not the future situation.
A SWOT analysis for a marketing plan is distinctly different to a SWOT analysis for a business plan in that each element you consider must be considered from the customer's point of view. For example, an element might include a "lack of funding". For the business plan this will have certain implications but how will the customer see this element? It may be that it is a lack of visibility due to the inability to adequately promote to your target market.
SO how do you create a marketing swot analysis?
Step 1: Strengths
What does the company/product do better than (or at least equivalent to) the competition. This could be:
- Specific product attribute advantage
- Brand perceived value
- Customer service of company
Step 2: Weaknesses
What does the company/product do that is not as good as the competition? How is this going to effect your customer's sales?
Thought needs to be given to how you can compensate for, or overcome these issues. What is the cost of overcoming these issues?
Is it necessary to overcome the issues or are they something you can accept and deal with?
Step 3: opportunities
What area of the market could you enter with some modifications to the product/service or company? The main elements here could include:
- Change size, shape, colour
- Additional services
- New packaging
- Different distribution points
- New promotional focus
Step 4: threats
What actions could threaten the product or standing in the market?
- New competitor entry
- Major product failure
- Reduction in promotional spend
- Customer changes
- Changes in the market
Summing it all up
Although almost all people in business have completed a strengths and weaknesses analysis in the past as part of a marketing plan, a SWOT comes with special significance. It is the part of the process that really considers your competition and competitive set and is absolutely necessary prior to creating your brand positioning or creating your marketing strategy.
If you want to know more about creating your marketing strategy and the steps involved, then please download the free workbook and contact Fit 4 Market for further assistance. It contains examples and a template for you to use.
Fit 4 Market are marketing strategy consultants operating in Adelaide, Melbourne, Sydney, Brisbane and Perth