What is SWOT analysis and How Can It Help You? – Business Essay
SWOT analysis is a one of the strategic marketing analysis which is basic and straightforward model that provides direction and serves as a basis for the development of marketing plans. In order to accomplish this, it is important to assess the: Strengths of an organization (what an organization can do) Weaknesses (what an organization cannot do) Opportunities
(potential favorable conditions for an organization)
Threats (potential unfavorable conditions for an organization).
SWOT analysis is an important step in planning and its value is often underestimated despite the simplicity in creation. The role of SWOT analysis is to take the information from the environmental analysis and separate it into internal issues (strengths and weaknesses) and external issues (opportunities and threats). After this is completed, SWOT analysis determines if the information indicates something that will assist the firm in accomplishing its objectives (a strength or opportunity), or if it indicates an obstacle that must be overcome or minimized to achieve desired results (weakness or threat) (Marketing Strategy, 1998).
One of the methods to develop a SWOT analysis model is to divide a whiteboard into four and find out the strengths, weaknesses, opportunities and threats of the company. To start with the strengths, it is advisable for the company to consider this from the point of view the consumers the company deals with. It has to be realistic and not too modest. It is best to list down the characteristics of the company which can also be the company’s strengths.
When it comes to weaknesses, the company has to consider the points from internal and external basis – to find out whether the consumers seemed to perceive the weaknesses that the company does not see. It is also advisable to find out whether the competitors are doing better than the company. Possibly best to be realistic and face the unpleasant truths as the soonest.
For the opportunities, it is useful to gather the useful ones such as the changes in technology and markets. The company has to be updated of the latest technology and its markets. Most importantly is the possible change in relations to the government policy which relates to the company’s field. Companies have to adapt to changes to the environment in order to keep up their products successful. Another one would be the changes in social patterns, population profiles, lifestyle changes, economical, etc. Consumers taste differs over time and therefore, companies have to keep up with the needs and wants of the consumers. Last but not least is to pay attention to the local and global events that is happening around, it is a good chance for the company to sell its products through such events.
It is not simply enough to identify the strengths, weaknesses, opportunities, and threats of a company. In applying the SWOT analysis (in figure 1), it is necessary to minimize or avoid both weaknesses and threats. Weaknesses should be looked at in order to convert them into strengths. Likewise, threats should be converted into opportunities. Lastly, strengths and opportunities should be matched to optimize the potential of a firm. Applying SWOT in this fashion can obtain leverage for a company (Marketing Strategy, 1998).
As can be seen, SWOT analysis can be extremely beneficial to those who objectively analyze their company. The marketing manager should have rough outline of potential marketing activities that can be used to take advantage of capabilities and convert weaknesses and threats. However, at this stage, there will likely be many potential directions for the managers to pursue. Due to the limited resources that most firms have, it is difficult to accomplish everything at once. The manager must prioritize all marketing activities and develop specific goals and objectives for the marketing plan (Contemporary Marketing, 1992).