How to do an effective marketing SWOT analysis?

So, you have committed time and resources to conduct a marketing environmental analysis. Now, you should know how external and internal factors can help you plan your strategy better. But how? That’s exactly what a SWOT analysis does. SWOT: A mnemonic for Strengths, Weaknesses, Opportunities, and Threats. The SWOT analysis is a time-tested framework to help you gauge different factors. You can understand how playing to your internal strengths and covering your weaknesses can be leveraged. This provides great opportunities while protecting you against threats.

For a SWOT analysis to be successful, it is essential to do a full sweep. This helps you consider any forces that could affect how you do business. It requires hands-on involvement from your leadership. If the organization is too big, then a representative from each division will suffice. Their involvement provides a full assessment of your core competencies, capabilities, and resources.

Research for external factors affecting your strategy will also have to be thoroughly conducted. You can use data and insights from your industry and business environment. Conduct a thorough marketing environmental analysis to understand the forces affecting you. The starting point for the SWOT analysis is the same as that for environmental analysis, establish an objective, a goal that you are trying to achieve. You can use the SMART goal-setting framework to do this. You can find more about it in this blog post.

Advantages of a SWOT Analysis

There are a ton of pros and cons for the usage of SWOT analysis in business and marketing. This post on Chron.com describes some of the key advantages and disadvantages really well! Here’s are some that I value:

• It is a source of information for planning
  
• Builds organization’s strengths and controls its weaknesses
  
• Maximize your response to opportunities
  
• Overcome threats to business
  
• It identifiesyour core competencies
  
• Aids in setting objectives
  
• You utilize past and current data to your advantage

Now, Let’s take a closer look at each tenet of the analysis:

Strengths

What makes you stand out in your industry? Do you have specific advantages in personnel? Or maybe with resources or intellectual property? Additionally, do you have an edge in processes or quality? If the answer to any of those questions is “Yes”, consider those your strengths! Even though most strengths are tangible, don’t forget about perceived strengths. If you have established superior relationships, customer loyalty, or brand image, then those count too!

Weaknesses

No organization or brand is perfect. But there are always things you can improve to increase performance and fuel growth to meet objectives. Any factors that do, or potentially can, get in the way of desired outcomes are your weaknesses. Do you have debt, limited resources, a fragile brand image, low customer satisfaction, less-than-ideal partnerships, quality or service issues? Then you have to address these by listing them as weaknesses if they have the potential to affect your goals.

Opportunities

Any external factors that can be maneuvered to your advantage are your opportunities. This could include new policies, technology, general consumer behavior, regional influences, and market trends. Opportunities are generated from favorable circumstances, but it is up to you to determine how and when to seize them.

Threats

Sometimes there are external forces out of our control. And these can alter the way you do business. Also, creating complications for achieving your objectives. These are your threats. This could include competitors, new advancements, and alternatives. But also consider market tendencies, partnership issues, or service disruptions. You may have minimal reign over these forces but you can set in place contingency plans by leveraging your strengths or balance it out by undertaking new opportunities. 

The standard SWOT analysis matrix

Now that you have a better understanding of each of the elements for a SWOT analysis, let’s look at how a standard SWOT analysis is conducted with a simple example:

You have a bike rental shop and are looking to grow your business in the summer. Your SMART goal is:

To increase revenue from bike rentals this summer by 20%

Step 1:

Draw a 2×2 Matrix and label them Strengths, Weaknesses, Opportunities & Threats in the same order as the image below:

You can ignore the top row and column of the left as they are just descriptions for the rows and column

Step 2:

Fill in internal strengths and weaknesses. As well as external factors that are opportunities and threats.

You can do this with a comprehensive environmental analysis. This covers external environments (both macro- & micro-) along with internal environments. A definitive result of a good analysis provides the input necessary to conduct an insightful SWOT analysis. Additionally, you can find more about marketing environmental analysis in a previous blog post.

Step 3:

Find links and connections between how you can utilize your strengths to take advantage of opportunities and minimize threats. You can also plan actions, to avoid ruining opportunities or escalating threats, by subsidizing your weaknesses. 

In the above example, you can develop several strategies to meet your objective of increasing revenue this summer, some are as follows:

• Offer monthly and seasonal subscriptions to your customers.
  
• Improve the digital and overall customer experience.
  
• Provide contact-free options with no wait times.
  
• Position your store as the premier bike rental option locally.
  

As an add-on to strategy development, you can even use the same SWOT matrix to develop tactics that will align with your strategy. Let’s look at a few examples:

• Use new code unlocked bike racks to cover bookings during non-operational hours (night times) and to reduce the amount of staff needed on-site. Issue a discount for this contact-free option.
  
• Use your price guarantee and superior quality of bikes to match any competitor offers. You can even offer free upgrades to top tier bikes.
  
• Since biking in the winter may not be possible, a monthly/seasonal subscription could be a viable alternative to buying their own bike.
  
• Since fewer customers opt for mid-day rides, run a special promotion for a free bike upgrade between noon and 4 PM and throw in free water!
  

If you pay close attention, each of the above strategies focused on internal actions (strengths & weaknesses). These counter effects of external factors (opportunities and weaknesses). By performing an effective SWOT analysis, you can generate great strategies and even tactics. You can then feed what you learn into a marketing planning framework like SOSTAC. Or even into your marketing funnel or hourglass! This will help you build and grow your brand and business, to meet your goals. Especially when you use it in a great marketing framework like STDC

The TOWS Matrix – A variation of SWOT analysis

Another variation of SWOT analysis has been the TOWS matrix. This is a more organized way to go about the creation of strategies. For the same example above, a TOWS matrix would look like this:

If you take a second look at the tactics from the standard SWOT analysis matrix, you will see that most strategies and tactics will fit into one or more of the buckets in the TOWS matrix. The ideas could also be more complex, but finding these ideas and developing these strategies and tactics will further validate your SWOT analysis.

In the example above, despite having derived great strategies and tactics, you need to re-focus on your goal, which is to increase summer revenue by 20%. Therefore, you have to pick and choose those strategies that will effectively help you accomplish that specific goal. You will benefit most by launching subscriptions and setting up online payments which will also reduce no-shows, thus directly increasing your revenue.

There are several other great resources out there showing how to conduct a SWOT analysis for your small business like this blog post on Wordstream. You can also apply SWOT analysis to creating customer personas or take the input of your content audit to generate a robust content strategy to really focus your efforts. The applications really are endless!

Conclusion

You can easily see how using either matrix model to perform a SWOT analysis can generate valuable ideas to market your brand. This can be applied by your business to your personal brand too! Your personal brand is still a brand. Here’s a great post on mindtools.com talking specifically about using a SWOT analysis for your personal brand and career!

The SWOT analysis’ simplicity and effectiveness is a testament to why it has been in use since the 1960s! After developing your strategies and associated tactics to accomplish your goals, you will have to draw up a robust implementation process with rigorous measurement. But don’t lose sight of the changes in an ever-changing business environment and your capabilities. These changes also alter the input for a SWOT analysis, so before you know it, it’s time to do one again! This could lead to a tweak to existing strategies or a full 180, so be clear in your objectives. Just follow the process to discover how you can continue to enhance customer experiences and add value to them!