SWOT Analysis – Evaluating Strengths, Weaknesses, Opportunities, and Threats
It is useful to complete an analysis that takes into account not only your own business, but your competitors’ activities and current industry happenings as well when conducting strategic planning for any company – online and/or offline. A SWOT is one such analysis.
SWOT stands for strengths, weaknesses, opportunities, and threats. Completing a SWOT analysis helps you identify ways to minimize the affect of weaknesses in your business while maximizing your strengths. Ideally, you will match your strengths against market opportunities that result from voids in your competitors’ products and/or services.
Traditionally, a SWOT analysis confines strengths and weaknesses to your company’s internal workings while opportunities and threats refer only to the external environment. Here, I suggest a twist to that approach. To get a better look at the big picture, consider both internal *and* external forces when uncovering opportunities and threats.
A Basic SWOT Analysis
You can develop the basic analysis in a brainstorming session. To begin the analysis create a four-cell grid or four lists, one for each component: strengths, weaknesses, opportunities, and threats.
Then, begin filling in the lists.
Opportunities – Traditionally, a SWOT looks only at the external environment for opportunities. I suggest you look externally for areas your competitors are not fully covering, then go a step further and think how to match these to your internal strengths.
Try to uncover areas where your strengths are not being fully utilized. Are there emerging trends that fit with your company’s strengths? Is there a product/service area that others have not yet covered?
Threats – As with opportunities, threats in a traditional SWOT analysis are considered an external force. By looking both inside and outside of your company for things that could damage your business, however, you may be better able to see the big picture.
Some questions to get you started: Are your competitors becoming stronger? Are there emerging trends that amplify one of your weaknesses? Do you see other external threats to your company’s success? Internally, do you have financial, development, or other problems?
Expanded SWOT Analysis
You can take an additional step beyond a traditional “text book” SWOT analysis by delving deeper into industry dynamics. A more complete SWOT analysis can help you better understand your company’s competitive situation.
One way to step beyond a traditional SWOT analysis is to include more detailed competitor information in the analysis. Note Internet-related activities such as trade organization participation, search engine inclusion, and outside links to the sites. This will better help you spot opportunities for and threats to your company.
You can also take a closer look at the business environment. Often, opportunities arise as a result of a changing business environment that would affect a SWOT analysis. Examples include:
- A new trend develops for which demand outstrips the supply of quality options. Early on, the trend toward healthy eating coupled with an insistence on good-tasting food produced a shortage of acceptable natural food alternatives, for example.
- A customer segment is becoming more predominant, but their specific needs are not being fully met by your competitors. The U.S. Hispanic population experienced this phenomenon in the late 1990′s and early 2000′s.
- A customer, competitor, or supplier goes out of business or merges with another company. With the demise of many pure-play “dot coms”, examples of this abound. As each went out of business, opportunities arise to gain the defunct business customers.
You can also expand the reach of a SWOT analysis through surveys. You can learn more about your own as well as competitor’s sites and businesses. Areas to consider researching include 1) customer awareness, interest, trial, and usage levels, 2) brand, site, and/or company image, 3) importance of different site or product attributes to your customers, and 4) product and/or site performance.
Whether using a basic or more advanced approach to SWOT analysis, you are sure to come away with newfound insights. Use these to increase your company’s effectiveness and as input into your business or marketing plan.
For information on more analysis and techniques, visit the Marketing Management Objectives section.