If you’re currently studying marketing, or preparing for a career in this field, you may have heard of the term ‘SWOT’, a marketing tool that many businesses use as part of their digital strategies.
A SWOT analysis is an essential component of any marketing plan, it helps businesses to think about their internal capabilities, and the external forces that affect them. It is a critical development tool for companies that want to leverage their strengths and improve their weakest skills.
In this article, we’ll share everything you need to know about SWOT analysis, and how you can apply it to your own work.
What is SWOT analysis?
A SWOT analysis is a framework that marketing teams used to identify their internal strengths and weaknesses, and the external factors that could be affecting the way that their organization is running.
There are four components that make up a SWOT analysis:
Why should you perform a SWOT analysis?
If you want your company to move forward and improve, performing a SWOT analysis is highly important. It allows you to identify and analyze your strengths, weaknesses, opportunities, and threats so you can decide on the best way to make progress.
Each business has its own benefits and flaws – even large companies like Amazon and Apple have strengths and weaknesses! By being aware of these factors, you’ll find it easier to create an action plan and marketing strategy that will utilize your best assets.
Different companies use SWOT analysis in different ways. Some use it as an overview of their whole business, whereas others carry out project-specific analyses to help in the planning stage of a new project, campaign or product launch.
What does SWOT stand for?
SWOT stands for strengths, weaknesses, opportunities, and threats. Keep reading to find out even more about each category.
Strengths and weaknesses are both internal factors that a business has control over and can change, for example:
- Internal knowledge, skills, reputation, networks
- Physical equipment, technology, and customers
To determine what your company’s specific internal skills are, you can ask yourself the following questions:
- What do we do that’s better than everyone else?
- What is our USP?
- What resources do we have that aren’t available to others?
- Which factors in our control result in sales?
- What would a competitor consider our strengths to be?
The internal attributes that you have control over, but that negatively impact your business fall into the weaknesses category of a SWOT analysis.
Weaknesses could include factors such as:
- Knowledge, skills or equipment that your company is missing
- Inefficient business processes
- Resource limitations
- Gaps in your team
To identify these weaknesses, ask yourself the following questions:
- What would our customers improve in our business?
- Are there any internal factors we control that result in lost sales?
- What would our competition consider our weaknesses to be?
- What processes could we improve upon within our business?
It can be difficult to bring attention to your weaknesses, but without identifying them you’ll never be able to improve.
Opportunities and threats are both external factors that your company has no direct control over, but which could still result in a significant impact on your operations.
Opportunities can bring you success. They include factors such as:
- Changing consumer and market trends
- Upcoming events and tradeshows that you can attend
- Unexpected press and media coverage
Companies should always be aware of the different opportunities they could take advantage of. To identify these opportunities, ask yourself the following questions:
- Are there any interesting consumer trends that you could engage with?
- Are there any upcoming events where you could reach your target market?
- How can you encourage more customers to purchase from you following positive media coverage?
The last external factor that you cannot control is threats. These are not as positive for your business, and if not managed correctly they could result in lost sales and customers.
Threats to your business can include:
- Negative press or media coverage
- Government regulations that negatively affect your business
- Consumer trends moving away from your business
- New technology that renders your product or service obsolete
- New competition in the market
It’s important to remain aware of the threats that could affect your business. To identify and mitigate them early on, ask yourself the following questions:
- What are the impacts of government regulations on my business?
- How could new competitors affect my position in the market?
- What new technologies could threaten my business?
- Are competitors working on newer, more effective products than me?
- Are customers no longer interested in my product?
How to carry out a SWOT analysis
Now that you’ve considered the factors that comprise a SWOT analysis, you can map them out on a SWOT matrix.
Begin with an upcoming project or create one to use as an example. Then list a few points for each of the four SWOT factors: strengths, weaknesses, opportunities, and threats.
For this example, we’re going to do a SWOT analysis on a coffee brand.
Once you’ve gathered these points, put them into a matrix as follows:
SWOT Analysis Example
|Recognizable brand image|
Good brand reputation
Loyal customer base
High cost of materials, shipping etc.
Products are easy to imitate
Inefficient workspace and teams
|Growth in social media|
Opportunities to start selling different products
More people working remotely, spending time in coffee shops
Delivery services, mobile ordering etc.
|Lots of new, cheaper competitors in the market|
Changing consumer attitudes in favor of smaller, ethical businesses
Other companies have started to copy products
Growth in market for healthy alternatives to coffee
A SWOT analysis is an effective tool that you can apply to track your progress at each stage of your business development. Use it to improve your operations and continue to grow!