SWOT analysis acts like a secret weapon against the competitors
SWOT stands for Strengths, Weakness, Opportunities, and Threats. To formulate a marketing strategy you have to evaluate each of the aspects of your business.
Strengths and weakness focus on the internal aspects of your business. There are many businesses that fail to look outside their company; however they are great at looking inward. Threats and opportunities focus on the external aspects of the company. SWOT analysis plays an important role in determining the opportunities open for you and capitalizing on your strengths.
Your small business will have multiple benefits with SWOT analysis like:
- By using SWOT in your business plan, you can understand the structure of the industry.
- In order to get a competitive advantage in the market place, you have to focus on your advertising and marketing.
- SWOT analysis helps to see the possible threats and helps us react proactively.
- SWOT gives you the perfect solution for the growth of your business.
You can make your own SWOT analysis by considering all the factors in your business. You need to consider each section with a certain degree of practicality and realism. Look at the following examples in order to complete a SWOT for your organization:
Strengths could be anything that you provide to your customers but your competitors do not. For example, you competitors may use a telephone in order to sell their products whereas you use direct face to face selling. Therefore, this can be a possible strength. Some other possible strength could be:
- Product individuality
- Business location
- Proprietary goods
It becomes difficult to write down the weakness as compared to the strengths. You need to think about the objections that were made by the customers during the sales process. Some of the possible weakness could be:
- High cost of production
- Similar service and products that are used by the competitors
- Limited human resource and staff
Opportunities focus on the external parts of the business. Factors like legal, technological, political and cultural environment can influence your small business. Consider things that can make your business obsolete and replace them with the latest practices or technology. Some of the possible opportunities are:
- Adapting new technology or development of new technology
- Softening of government regulation
- Newer markets
Threats could be:
- Price competition
- New products emerging as substitutes
- Economic pressure
You can understand the big picture with the help of a simple SWOT analysis. SWOT analysis helps you take better and informed decisions for your business.