There was a time when businesses were all about sales and customers, but those days are long gone. SWOT analysis in marketing is the modern way of conducting a business.
If you are planning to start a business, or already have one, it is most likely that you have already heard the name of SWOT analysis, or might know a thing or two about it. Now if you are looking for a perfect guide to SWOT analysis in marketing, this is the place.
With SWOT analysis, you can create a strategy to establish your priorities, take advantage of opportunities, and avoid obstacles as your firm grows. Let’s discuss what a SWOT analysis is in detail, look at a few SWOT analysis examples, and then discuss how to perform one for your company.
What is SWOT analysis in marketing?
A SWOT analysis focuses on the four horsemen of any business plan- Strengths, Weaknesses, Opportunities, and Threats. It is performed by an organization to find out its strengths and weaknesses, as well as its opportunities and threats.
By Performing a SWOT analysis, you can explore different sides of your business, so that you can sketch out a more strong and efficient marketing plan. Moreover, a proper SWOT analysis can help you to specify your needs, expand your opportunities, and cut down on risks.
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Example of SWOT analysis in marketing
Now that you know the definition, the best way to explain a concept is to provide examples.
Let’s check out some examples of Strengths, Weaknesses, Opportunities, and Threats of a business:
Strengths:
Here are some aspects that count as strengths for a business:
- Sufficient financial support
- Enough manpower
- Quality of product/service
Weaknesses:
Where there is strength, there is weakness:
- Lack of funding or workforce
- Underperforming product/service
- Absence of supervision
Opportunities:
Always keep your eyes open:
- Small number of competitors
- Sectors that are ignored by competitors but can be capitalized
- Scope to expand operations
Threats:
Stay alert for threats:
- Changes in consumer trends
- Price hikes of raw materials or inflation in the economy
- Rise of new competitors
Say you are to organize a marketing plan for a car rental business startup. Your target is to reach potential clients and compete with other competitors in the city.
Now let’s look at the SWOT components of the business:
Strengths
- Latest model vehicles of many types
- Adequate manpower
- Proper funding
Weaknesses
- Lack of Linkups
- Not enough advertising
- Small number of vehicles
Opportunities
- Better vehicles than competitors
- Fewer competitors
- Rising number of rental car users
Threats
- Rise of ride-hailing services such as Uber, Pathao, etc.
- Fuel price hike
How to Conduct a SWOT Analysis?
Enough definitions and examples, now let’s find out how to build one.
Here are some easy moves to create a SWOT analysis:
Step 1: Determine your Goal
The key thing to determine before performing a SWOT analysis is to fix your goal for the business or the marketing campaign. The goal can be holistic, or it can be very specific. Some examples of specific marketing aims are:
- Responses for a new product
- Increasing customer traffic
- Reducing customer churn
- Brand recognition
- Improving KPI etc.
Step 2: Find Out Your Strengths
Pointing out your strengths is the most important factor for a SWOT analysis. Strengths are the key factors of your business that give you an advantage over your competitors. Some common examples of business strengths are:
- Adequate Manpower
- Enough Resources
- Quality Products etc.
Step 3: Review your Opportunities
Opportunities are those business aspects that your competitors aren’t using. Yet, you have the capability to exploit them. Opportunities are your biggest advantage against competitors, even more than your strengths.
Experts say those who include opportunity in SWOT analysis in marketing strategy are more likely to grow faster than those who don’t.
Here are some aspects of business opportunities:
- Tactics or scopes that your competitors aren’t using or neglecting
- Social trends that you can capitalize on
- Possible sources of funding
- Technologies that you can use in your business to improve efficiency
- Audiences that you haven’t reached yet etc.
Step 4: Inspect your Weaknesses
If you don’t overcome your weaknesses, they will overcome your business eventually. Veterans say that weaknesses are just opportunities in disguise.
Some ways to point out your weaknesses are:
- Identifying what your business lacks that your competitors are providing
- Segments of your business that are less profitable
- Sections that lack resources
- Inspecting from a consumer’s viewpoint
- Finding out neglected drawbacks etc.
Step 5: Look Out for Threats
Ignoring potential threats can be fatal for your business in the long run. To identify threats, you can brainstorm with your team and discuss them among yourselves.
Also, you can use these steps to pinpoint your threats:
- Barriers that you might hit in the near future
- Rising competitors
- Altering market conditions
- Churning of devoted customers etc.
How Can You Exploit SWOT Analysis in Marketing
Performing a successful SWOT analysis without any of the drawbacks mentioned above will help to make your business marketing plan more fruit-bearing and well-planned. Moreover, it will assist you to find out the segments which need more attention. Also, it will help you to understand the weak points of your business plan.
Finally, a proper SWOT analysis will make you capable enough to plan out the future goals for your business.
Some other advantages are:
- Helps you to build a proper swot analysis in marketing management
- Makes you recognize your business strengths
- Guides to take countermeasures for your weaknesses
- Helps to respond to opportunities
- Assists you in minding threats
- Useful for setting up plans for the future
- It’s cost-effective
Why is it Crucial to Perform a SWOT Analysis in Marketing
SWOT analysis helps you to explore your business from various aspects. For example, performance, efficiency, risks, opportunities, competitors, possibilities, etc.
In simple words, performing a SWOT analysis will cover all you need to know about your business.
Some reasons for why it is vital to use SWOT analysis in marketing:
Pointing Out Your Lackings
SWOT analysis helps you to find out the threats and weaknesses of your business plan. So, you can work to solve these issues.
Recognizing Your Strengths
The primary duty of a SWOT analysis is to find out the strong sides of your business. Once you get to know the strengths of your business, you can then take advantage of those sides and maximize your profit.
Finding out Opportunities for Your Business
Besides digging out the strong sides, SWOT analysis looks out for new opportunities. For instance, possible clients, scopes for further distribution etc.
Building an Outstanding Business Strategy
After knowing your strengths and weaknesses, you need to have a specific strategy for your business plan. A SWOT analysis brings out both the strong and weak sides of your business plan. So, you are able to form a complete strategy for your marketing plan of action.
Proper Usage of Your Resources
Once you are able to identify the strengths and risks of your business, you will know how to distribute your resources in a more efficient way. This way, your business can cut down costs and maximize profits.
I Have Performed a SWOT Analysis; Now What?
Only performing a SWOT analysis will mean almost nothing if you don’t decide to act on it. In order to get the finest results, you have to respond to the SWOT analysis results as soon as possible.
Here are some methods to respond to your SWOT analysis results:
- Exploit your Strengths
- Take care of your Weaknesses
- Note down the Threats
- Take advantage of your opportunities
- Organize future business plans according to analysis outcomes
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Common mistakes of SWOT analysis in marketing
Hope you have a clear concept of how to assemble a SWOT analysis. Now let’s have a peek at some common mistakes that are most likely to make in a SWOT analysis:
- Having a lengthy list of items
- Oversimplifying or Generalizing
- Overestimating Your Strengths
- Turning your back on Weaknesses
- Depending too much on SWOT Analysis
Avoiding these faults will provide an efficient and fruitful SWOT analysis for your business.
Wrapping Up
This is the era of competition, and if you start behind the race line, you are halfway to losing the game. We have seen businesses falling apart before they could even start, and the reason was only a lack of proper planning and market research.
But you don’t need to worry about those things, as now you know what is a SWOT analysis in marketing, its importance, how to build one and how to get the better of it. So quit stalling and start SWOT analyzing your own business. Go flourish your business. ALL THE BEST!
