SWOT analysis is a straightforward model that analyzes an organization’s strengths, weaknesses, opportunities, and threats to create the foundation of a marketing strategy. To do so, it takes into account what an organization can and cannot do as well as any potential favorable or unfavorable conditions related to the company’s products or services.
Often viewed as a key step related to planning, SWOT analysis is deceptively simple despite the immense value it delivers. The system combines information from the environmental analysis and separates it into two components: internal issues (strengths and weaknesses) and external issues (opportunities and threats).
This level of analysis enables an organization to determine whether there are factors present that will aid in the achievement of specific objectives (due to an existing strength or opportunity) or if there are obstacles that must be overcome before the desired outcome can be realized (due to weaknesses or threats).
As mentioned above, the process of SWOT analysis evaluates your company’s strengths, weaknesses, market opportunities, and potential threats to provide competitive insight into the potential and critical issues that impact the overall success of the business. Further, the primary goal of a SWOT analysis is to identify and assign all significant factors that could positively or negatively impact success to one of the four categories, providing an objective and in-depth look at your business.
Highly useful for developing and confirming your organizational goals, each of the four categories provides specific insights that can be used to cultivate a successful marketing strategy, including:
Once you’ve established specific values related to your business offerings within the four quadrants of SWOT analysis, you can develop a strategic plan based on the information you’ve learned. For example, once you’ve identified your inherent strengths, you can leverage them to pursue the opportunities best suited to your organization, effectively reducing potential vulnerability related to threats. In the same way, by identifying your organization’s weaknesses with regard to external threats, you can devise a plan that will enable you to eliminate or minimize them while improving defensive strategies related to your offerings.
It’s important to remember that SWOT analysis can be influenced (and often quite strongly) by those who perform the analysis. So it’s a good idea to have an outside business consultant review the results to provide the most objective plan.