Often times I find my clients are itching to execute a marketing program to generate sales but really don’t know what the plan should be or why they’re focusing on one opportunity over another. That’s when I suggest we take some time to assess their current situation and critique their competitive abilities to meet customer needs in the marketplace. Strategists and marketers alike refer to this process as a SWOT. At first glance, for many small businesses, this seems like an onerous task that is difficult to complete with the daily pressures of keeping the business going. However, a SWOT Analysis is a powerful technique for understanding your strengths and weaknesses, and for looking at the opportunities and threats you face. It can help you carve a sustainable niche in your market.
What makes SWOT particularly powerful is that, with a little thought, it can help you uncover opportunities that you are well positioned to exploit. And by understanding the weaknesses of your business, you can manage and eliminate threats that would otherwise catch you unaware. More than this, by looking at your firm and your competitors using the SWOT framework, you can start to craft a strategy that helps you distinguish yourself from your competitors so that you can compete successfully in your market.
The most effective way to perform a SWOT analysis is to gather key members of your company together to answer the following questions. When completing a SWOT, it’s important to remember that strengths and weaknesses are often internal to your organization while opportunities and threats often relate to external factors.
Strengths:
What advantages does your company have?
What do you do better than anyone else?
What unique or lowest-cost resources do you have access to?
What do people in your market see as your strengths?
What factors mean that you "get the sale"?
Consider this from an internal perspective, and from the point of view of your customers and people in your market. In looking at your strengths, think about them in relation to your competitors - for example, if all your competitors provide quick turnaround, the a speedy delivery process is not a strength in the market, it is a necessity.
Weaknesses:
What could you improve?
What should you avoid?
What are people in your market likely to see as weaknesses?
What factors lose you sales?
Again, consider this from an internal and external basis: Do other people seem to perceive weaknesses that you do not see? Are your competitors doing any better than you? It is best to be realistic now, and face any unpleasant truths as soon as possible.
Opportunities:
Where are the good opportunities facing you?
What are the interesting trends you are aware of?
Useful opportunities can come from such things as:
Changes in technology and markets on both a broad and narrow scale
Changes in government policy related to your field
Changes in social patterns, population profiles, lifestyle changes, etc.
Local events
A useful approach for looking at opportunities is to look at your strengths and ask yourself whether these open up any opportunities. Alternatively, look at your weaknesses and ask yourself whether you could create opportunities by eliminating them.
Threats:
What obstacles do you face?
What is your competition doing that you should be worried about?
Are the required specifications for your products or services changing?
Is changing technology threatening your position?
Do you have bad debt or cash-flow problems?
Could any of your weaknesses seriously threaten your business?
Carrying out this analysis will often be illuminating - both in terms of pointing out what needs to be done, and in putting problems into perspective. You can also apply SWOT Analysis to your competitors. As you do this, you'll start to see how and where you should compete against them.
Finally, here are some handy tips that I have found to make SWOTs more productive:
Only accept precise, verifiable statements ("Customer savings of $10 per sq. foot” rather than "Good value for money").
Ruthlessly prune long lists of factors, and prioritize factors so that you spend your time thinking about the most significant factors.
Make sure that options generated are carried through to later stages in the strategy formation process.
Conduct the SWOT at the right level - for example, at product or product line level, rather than at the more vague whole company level. The exception to this would be start-up companies or relatively small companies with a single product or service offering.
With these tips and the questions shown for each category of the SWOT, you've now got the tools you need to do an analysis for your company and find those opportunities to drive more revenue.
Michelle Lanter Smith is Chief Executive Officer of Hi-Impact Marketing & Sales Solutions, Inc.
