03.24.2010

SWOT Analysis - Your Secret Weapon

A SWOT analysis is not a James Bond mission. SWOT simply stands for: Strengths, Weaknesses, Opportunities and Threats. While running your business forces you to focus on the issues and fires burning today, a SWOT analysis will help you quickly understand the big picture and position yourself ahead of competitors tomorrow.

View keyword as a box on a grid. Filling in each section forces you to look inward (Strengths and Weaknesses) and externally (Opportunities and Threats). All four elements combined help create a solid marketing strategy.

Developing a SWOT requires honest assessment. If you think you are great at everything and have no competitors, think again.

Put yourself in your customers’ shoes. How do they really perceive you? Ask trusted outsiders for help. Their unvarnished perspective may help uncover opportunities like:

• Untapped growth potential and new markets
• Ways to focus your advertising and marketing to give you a competitive advantage 
• Identifying and addressing looming threats

The most important take-away from this exercise is to apply this knowledge to your small business. Take all necessary actions to reduce the threats to your company and position yourself to take advantage of the opportunities.

Strengths — Consider your strengths from your customers’ perspective in relation to your competitors. For example, do your competitors rely on phone sales, while you sell face-to-face? Anything a customer wants that you provide and your competitor doesn’t is a strength.

• Business location or product exclusivity 
• Patents or proprietary goods 
• An established distribution channel

Weaknesses — Identifying strengths is easy; weaknesses are more difficult. What objections do customers raise during the sales process? How do your competitors sell against you? Is there any truth to what they say?

• Limited human resources and staff 
• High cost of production 
• Products or service similar to competitors’ 

Opportunities — External forces influence your small business: legal, political, technological, and cultural factors. Each can open a door for expanding your market or creating growth.

• Government regulation softening
• Development of new technology
• Growing trend and customer base

Threats — Consider what can make your business obsolete and what will replace it. Threats can become opportunities or vice versa.

• New substitute products emerging 
• Price competition 
• Economic pressure