The importance of SWOT Analysis in developing a Sales & Marketing Strategy is that you combine information from the environmental analysis and separate it into two components: internal issues (strengths and weaknesses) and external issues (opportunities and threats).
What makes SWOT particularly powerful is that, with a little thought, it can help you uncover opportunities that you are well placed to exploit. And by understanding the weaknesses of your business, you can manage and eliminate threats that would otherwise catch you unexpectedly.
More than this, by looking at yourself 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 acronym SWOT is defined:
Strengths:
- What advantages does your organization have?
- What do you do better than anyone else?
- What unique or lowest-cost resources can you draw upon that others can’t?
- What do people in your market see as your strengths?
- What factors mean that you “get the sale”?
- What is your organization’s Value Proposition?
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 perspective: Do other people seem to perceive weaknesses that you don’t see? Are your competitors doing any better than you?
It’s best to be realistic now, and face any unpleasant truths as soon as possible.
Opportunities:
- What good opportunities can you spot?
- What interesting trends are you 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, and so on.
- Local events.
Threats:
- What obstacles do you face?
- What are your competitors doing?
- Are quality standards or specifications for your job, 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?
When Do You Use SWOT?
A SWOT analysis can offer helpful perspectives at any stage of an effort. You might use it to:
- Explore possibilities for new efforts or solutions to problems.
- Make decisions about the best path for your initiative. Identifying your opportunities for success in context of threats to success can clarify directions and choices.
- Determine where change is possible. If you are at a juncture or turning point, an inventory of your strengths and weaknesses can reveal priorities as well as possibilities.
- Adjust and refine plans mid-course. A new opportunity might open wider avenues, while a new threat could close a path that once existed.
SWOT also offers a simple way of communicating about your initiative or program and an excellent way to organize information you’ve gathered from studies or surveys.