The SWOT analysis is a strategic analysis technique that is often used in the field of marketing to understand the strengths and weaknesses of your company, as well as to comprehend which factors of your competitors can be analyzed and exploited.
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.
The first two components analyze the company's strengths and weaknesses (internal factors) while the last two (threats and opportunities) are derived from competitors (external factors).
Stages of SWOT analysis development
The positioning of a company or an individual product falls into the factors that generate brand reputation.
The SWOT analysis is indeed part of the preliminary strategic analysis phase of a company or a marketing campaign aimed, for example, at launching a new product.
A company, especially a new one like a startup, tends to conduct preliminary analyses to enter the market with the intent of understanding how to position itself (or how to position a product).
Analyses such as SWOT are crucial for positioning the product itself (or the company) in the market and, consequently, differentiating from the competition.
The SWOT analysis originated from the idea of Albert Humphrey, a well-known American economist, who used this technique in the late 60s-70s for a project at Stanford University.
However, when it comes to understanding how to do a SWOT analysis, here are the essential points of execution:
- Understand the primary goals of the analysis.
- Define internal factors.
- Define external factors.
- Create a SWOT matrix.
- Create a strategic plan to apply the findings of the analysis.
Definition of SWOT Analysis Factors
As mentioned, the SWOT analysis highlights a map of factors (external and internal) that allow a company to understand how to position itself in the market and, consequently, create an effective marketing campaign.
Specifically, the internal factors that should be analyzed are defined as PRIMO-F.
The values considered by the internal PRIMO-F factors (strengths and weaknesses) include:
- People (target)
- Resources
- Innovation and Ideas
- Marketing
- Operations
- Finance (budget)
While the external factors (threats and opportunities) that should be analyzed are defined as PEST:
- Policy
- Economy
- Social
- Technology
Examples of SWOT Analysis Values
Specifically, let's see some examples of the four factors of SWOT analysis:
Strengths:
- The Brand identity
- Product Quality
- Support (customer care)
- The Brand reputation
- Distribution and logistics
- Pricing
- USP: Unique Selling Proposition (the unique value that only that product can bring with itself)
Weaknesses:
- Distribution and logistics (it can be both a strength and a weakness)
- Internal bureaucracy
- Tax regime
Opportunities:
Market opportunities that intertwine between the competitors' weaknesses and the company's strengths.
Threats:
There can be many threats but they are always related to external factors such as a competitor's much faster assembly line compared to yours, just to give an example.
Ultimately, the first two points of the SWOT (internal factors) can be actively modified by the company while the external factors (the last two points) are outside of the company's control but can create a context useful for understanding how to improve one's marketing.
How to Create a SWOT Matrix
A SWOT matrix is created by placing the results of internal factors and external factors on a chart and crossing them.
By combining the various areas, you will reach a synthesis where you can evaluate the adjustments to be made.
Therefore, value your strengths (some you may only discover after doing the SWOT), limit your weaknesses, and keep an eye on competitors both in their gaps (which represent opportunities for you) and threats (represented by their strong points).
Conducting a SWOT analysis means understanding where your company is positioned in the market and how to improve your presence across all channels.
You can do it too, you just need a lot of commitment and an excellent marketing and sales platform.
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