Why Every Business should have a SWOT Analysis
Conducting a SWOT Analysis isn’t just something you learn to do for your Marketing Degree. Conducting a thorough review of your Strengths, Weaknesses, Opportunities and Threats is crucial for businesses looking to stand out for the crowd and generate more leads. Without understanding what is going well and what isn’t in your business, you won’t be able to come up with an effective marketing strategy.
Whether you’re an entrepreneur starting afresh or a well-established business, it is crucial to take a step back and take a look at your business. By breaking your business down into these four categories, you can minimize risks and have the greatest possible chance of success following your marketing strategy. Here are some of the many reasons why every business must have a SWOT Analysis.
Understanding your company position
First of all, when devising a marketing strategy, there is no point in focusing purely on your business. You need to take a look at the market as a whole, to understand your business and your competition’s position in it. Knowing this is hugely important as it allows you to strategically develop your marketing plan, rather than focusing on tactics that don’t align with your audience or that have particularly high competition.
As we mentioned, a SWOT Analysis isn’t just useful for new businesses. They can be beneficial for the most established of businesses, particularly if facing a tough issue or a change in the company. For example, a profitable business, looking to launch a new range of products may wish to do a SWOT Analysis of this. This will allow that business to see if they are in a good position to do so and to identify if there are any external factors outside of their company that may impact this.
Understand your business strengths
For those unfamiliar with the technique, a SWOT Analysis is a simple but useful framework to analyze your business. It is split up into four components, with the first one being Strengths.
Understanding your strengths involves asking yourself a range of questions to do with your business. For example, you may want to ask, what do you do well? What is unique about your business? What do you do better than your competitors? The strengths section of the SWOT Analysis is a place for you to examine internal company factors.
Know what your weaknesses are
Even the most lucrative of businesses have their weaknesses so after evaluating your strengths, it’s time to take a step back and look at what you could do better. You may wish to examine questions such as, what skills or resources are you lacking? What is costing you money? Is there anything you feel that you are failing at or could improve on?
The opportunities section is the chance for you to evaluate factors external to your company. It is a chance to Look at marketplace conditions surrounding your business, service or product. Factors that you may wish to examine include, whether there are new audiences that you could potentially reach if there is another technology you could use to enhance your business and what sections of your business you could expand.
Know your threats
Lastly, the Threats section will also you to assess possible Impediments to achieving your business, service or product objectives. This includes thinking about what your competitors do well or what’s going on in the industry or the world (The Covid-19 Pandemic is a good example of this). You may also want to consider if there are new competitors in your market or whether your target market is shrinking.
Evaluating your results
Once you have carried out your SWOT Analysis, it’s time to take a look at the results. You’ll need to cross-references all of the points that you have made to come up with an actionable plan. You may wish to create a series of goals, that you can address with your marketing tactics. You will still be responsible for developing a strategy that will take you to where you want to be, but you will have a series of strategic and informed objectives to base that on.
Every single businesses strategy is unique which is why it is incredibly important to do prior research. Going in blind or basing your strategy on other businesses simply isn’t going to work. Your SWOT Analysis will help you to understand both your external and internal situation, helping you formulate a strategic marketing plan, with the context in mind.
A good marketing strategy will be tactical and trackable. Luckily, you can use the goals developed from your SWOT Analysis for this, This will allow you to implement a series of formulated strategies, rather than just going in blind and hoping for the best.
Making the most out of your budget
Every business has a budget and it is up to them individually to work out how they spread this between their departments. A thorough SWOT Analysis leads to a better understanding of your businesses in regards to where you need to spend money and where you don’t. For example, there is no use spending money implementing a new product range if the target market isn’t there. Instead, that money would be better spent on marketing tactics designed to grow interest in the products that your company already offers.
A SWOT Analysis is not the be-all and end-all when it comes to understanding your business. It is limited in many ways because it doesn’t prioritise issues, provide solutions or offer alternative solutions.
However, it is a great way to generate information about your business, and although all of this won’t be useful, much will and it will help you to develop a strategic and personalized marketing plan. What’s more, one of the main advantages is that it can be conducted with little or no cost, meaning that you save on the time and expense of hiring an external consultant.