Back to the Basics: The SWOT Analysis
As we move into the last month of Q1, you’ve liked defined your essential KPIs and strategic growth mechanisms for the year. Your different teams are in alignment, messaging is crystal clear and workflow follows an entirely seamless process across the organization. And, if you’re really lucky, your product or service is top-notch, and it’s reaching audiences in an impactful way.
Sounds just a little too perfect, right? If only you could freeze markets and competitors, you could then sit back and just watch the returns on investment come rolling in, without any interruption from external economic, political or environmental factors.
But the reality, particularly in these current times, is that any truly successful business will constantly evaluate opportunities and threats. With customer behaviors changing, and our customers’ environments consistently evolving around them, there will always be room to stop and identify where improvements can be made, and where challenges can be avoided before they cause any substantial harm to the business.
The SWOT Analysis
A review of market factors are part of what’s called a SWOT analysis: Strengths, Weaknesses, Opportunities and Threats. Strengths and weaknesses are often attributes that companies can look inward to address. Opportunities and threats are more likely to be reflective of the competitive environment: an ever-moving target.
Know Your Strengths and Weaknesses – Really
To set the stage, become an expert on trends, newcomers, and even larger economic and environmental factors. There are a number of ways to stay educated, including:
- Keeping up with trade journals – many have daily newsletters.
- Subscribing to research and data sites like eMarketer, comScore or Nielsen, depending on industry.
- Acting like a consumer, or better yet, be a repeat consumer in your space – sometimes a few searches or purchases will uncover something you didn’t notice before.
- Leaning on resources, whether it’s an internal research department or an agency partner devoted to being experts in the field.
The above steps are critical for both internal and external evaluation. For opportunities and/or threats from the outside, a forward-looking mindset is crucial for identifying key stakeholders, consumer trends and industry shifts that can impact your business.
Sometimes it’s obvious: a competitor closes, which then opens up market share, or a trending topic dovetails nicely with a core product offering. But digging a little deeper can put you ahead of the curve.
Consider these additional factors:
- New technologies and tools may impact business in tangential and unexpected ways. Think about, for example, the intersection of fitness wearables with the health industry, and the athleisure movement. Taking early advantage of new developments can elevate a brand above the competition.
- Consumer behavior is not always predictable, but keeping a pulse on different segments or personas can uncover shifts quicker than trying to analyze a broader group.
If spun correctly, threats can sometimes spark creativity and become hidden opportunities. But the first step is to identify them and figure out a game plan.
Consider these scenarios:
- Greater competition due to new players in the market or expansion by existing competitors could signal greater interest by the broader market, but also means working harder to capture attention.
- Increased costs of doing business may mean smaller margin, but may provide the chance to review vendor agreements and find savings
Yes, It’s Worth It
While it may seem like a more basic exercise, even a quick SWOT analysis can enlighten you to missed opportunities and areas for more creative thinking; on the flip side, it can save you the headache of misguided investments or missed product implementations. It may even give you the opportunity to weave in smaller strategic plans throughout your more comprehensive yearly strategy.