If you run a multinational conglomerate or a corner store, a B2B or a B2C, or anything in between – if your business makes, sells, or distributes a service or product – you need to be doing SWOT analyses.
SWOT analyses are a crucial part of understanding your business and its overall place in the market. If you want your business to get on top and stay there, a SWOT analysis should be the first step in your plan.
Before one dime is spent on a new marketing campaign, before any new product rolls off the production line, and at least once a year, a SWOT analysis should be conducted by your business.
What is a SWOT Analysis?
A SWOT analysis is a comprehensive cataloging of the state of your business, your competition, and your industry. In order to understand where you need to go, you first have to understand where you are.
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. These four areas will provide your business with an idea of where it is and where it needs to go in order to succeed.
There are two categories that these four areas fall into – internal and external factors. Internal factors can be controlled by you, while external factors are outside of your direct control but still affect your business.
Strengths and weaknesses are internal factors, which means that you have direct control over them. These two factors rely solely on the decisions your business makes.
The quality of your product, the knowledge and experience of your employees (as well as their motivation), and your advertising or marketing strategy are all examples of internal factors.
Whether or not those examples are strengths or weaknesses depends entirely upon you.
The strengths of your business should be highlighted, showing why your product or service is superior to the competition. Weaknesses should be improved upon and turned into strengths.
Opportunities and threats are external factors, existing outside of your business but still affecting your bottom line. While these factors may be outside of your business, they are not completely outside of your control.
In order to capitalize on opportunities, you first need to know that they exist. Likewise, in order to prepare for threats against your business, you need to understand what those threats are.
Emerging markets or new technologies are examples of opportunities, while new government regulations or increased competition could be considered threats.
Put it Together
A SWOT analysis is a breakdown of the current state of your business, your competition, and the current and future state of the market.
Putting together a list of your business’s strengths, weaknesses, opportunities, and threats can show you what moves you need to make to get your company where it needs to be in order to take the lead in your industry.
Pros and Cons of a SWOT Analysis
Your business can definitely benefit from a SWOT analysis, but there are some pitfalls to be wary of during the process.
If you’re not aware of both the negative and the positive aspects of a SWOT analysis, you may not be making the best decisions for your business.
Let’s take a look at some of the pros and cons:
There are many positives that come from conducting a SWOT analysis:
- Understand your own business better. By listing the strengths and weaknesses of your business, you may reveal new information or see old information in a new light.
What you thought was a strength may not be, and may even be considered a weakness. An experienced workforce may be expensive or stuck in their ways. This may be holding back your business instead of providing an advantage.
Alternatively, some weaknesses may turn out to be strengths. A limited distribution network may mean less overhead and allow for the discovery of new methods of delivery.
- Understand the competition. A thorough study of the competition may reveal things previously unknown. Recent upgrades may have gone unnoticed by the right people in your organization.
On the other hand, the competition could have made errors that your business can take advantage of. If the competition just lost a contract with an important client, it may have a significant impact on both of your businesses.
- Understand the market. There may have been changes to the market that your business hasn’t capitalized on or prepared for. Proposed regulations may have passed, or a new technology may be available.
- Promote your strengths / capitalize on opportunities. Once you understand what your strengths are, you can begin to promote those strengths to your potential customers. These added value propositions help you convert visitors to clients.
SWOT analysis may also show you opportunities you were previously unaware of, allowing you to capitalize on these situations.
- Correct deficiencies/deter threats. You can’t solve a problem if you don’t know it exists. Once a SWOT analysis shows you weaknesses, you can take steps to correct the issues.
Likewise, once threats have been discovered, you can take steps to eliminate or minimize any possible damage.
SWOT analysis also contain some negative aspects, including:
- Time consuming. These analyses take a lot of time to complete – putting the right people together, gathering the best data, and asking the right questions can take anywhere from days to months to complete, depending on the size and complexity of your business.
- Limited information. No SWOT analysis will be 100% accurate for one simple reason – data. It is impossible to gather all the data you’ll need.
You don’t know what information may be useful, and useful information may not be available. Do the best with what you’ve got (or can get), but keep this limitation in mind.
- It won’t prioritize for you. A SWOT analysis can tell you what steps you need to take, but it won’t tell you which steps are the most important. Prioritizing your actions will need to be done separately once the analysis is complete.
- You need the right people asking the right questions. In order to get the right answers, you first need to ask the right questions. The first step to asking the right questions is putting together the right team.
Contrarians should be included in any good SWOT analysis. If your group is an echo chamber, then the results will reflect this. Different opinions are critical to this process.
A SWOT analysis is a useful process, but like anything else it has strengths and weaknesses. Make sure you’re taking full advantage of the process by understanding the pros and cons.
Do your best to minimize the negative aspects and get the answers your business needs to succeed.
How Can a SWOT Analysis Help My Business?
You may be thinking that you understand your own business, keep tabs on the competition, and have a handle on the market, so why do you need to conduct a SWOT analysis?
The minute – the very second – that you get comfortable, that’s when you’ve started losing ground. You should always be asking yourself these questions:
- What could we be doing better?
- What is the competition doing better?
- What are we going to do tomorrow?
“That’s the way we’ve always done it” is the thing you always hear right before “I don’t understand what went wrong.”
Office parks are littered with newly renovated office space formerly inhabited by companies that stopped asking these questions. If you want to keep your landlord from hanging a “For Lease” sign where your company logo used to be, then you should be doing regular SWOT analyses.
These analyses will keep your business at the top of your market and ensure that you stay on the cutting edge of industry trends and new technology. They help to foster a culture of innovation, experimentation, and communication that will keep your business from stagnation and apathy.
Regular SWOT analyses will keep you asking the right questions, helping you stay on top of the competition and maintaining your status as an industry leader.
How Often Should a SWOT Analysis Be Done?
Businesses should be conducting SWOT analyses on a regular basis in order to stay on top of the market. You should be taking stock of your business’s state of affairs at least once a year.
Different departments within a business should run their own analyses as well, since each department has its own goals. It may also be the case that sections within individual departments need SWOT analyses. If a group is large enough to have its own goals that are measurable against a competitor, it will benefit from a SWOT analysis.
If you’re launching a new product or marketing campaign, you should be doing an analysis that is specific to that event. Of course questions should be suitably altered to take these circumstances into account.
You should not only be asking “What are the strengths, weaknesses, opportunities, and threats of/to this business?”, but also “What are the strengths, weaknesses, opportunities, and threats of/to this campaign/product?”
There are seemingly endless examples of companies that did not ask enough questions or include enough contrarians in the creation process when designing advertising or marketing campaigns (we’re looking at you, Pepsi).
A thorough SWOT analysis can help you determine weak points in a campaign or product before the Twitterverse has the opportunity to point them out to everyone. Having a viral marketing campaign is usually a good thing, but you want people to be talking about your brand for the right reasons. Despite what they say, not all press is good press.
Digital Marketing and SWOT Analysis
Digital marketing requires its own version of a SWOT analysis, specific to the aspects of a business that exist online. While the analysis itself is carried out in the same manner, the team you put together, the questions you ask, and the post-analysis campaigns and monitoring all have features that are unique to the digital environment.
What is Digital Marketing?
First, it may be helpful to discuss what we mean by digital marketing. Of course it’s easy to say (as we did above) “aspects of a business that exist online”, but what specifically does that cover?
The first and most obvious part of a company’s online presence is its website. This is the storefront for your business in the digital space. If your business doesn’t have a website stop reading this blog finish reading this blog and go get one.
Your website will contain landing pages for your marketing campaigns, business and product information, inbound marketing content, lead generation forms, calls-to-action (CTAs), it will provide access to any deliverables, and anything else you can think of/cram in there.
Your company’s website should be the biggest profit driver in the digital space, and all other parts of your digital presence should feed into your website.
Inbound marketing uses content to attract attention (i.e. leads) to your business. This content can take a variety of forms, including blogs, infographics, social media posts, and video.
Inbound marketing is designed to draw visitors to your website by providing information or entertainment to viewers and demonstrating your business’s expertise on a particular topic.
The goal is to bring in viewers with the content, generate leads among these viewers, and then market to those leads in order to convert them into customers.
Social media platforms are an integral part of any company’s online presence. Social media provides a way for your business to interact with your customers that is unparalleled anywhere else online.
It provides a way for a business to create and maintain customer loyalty as well as gather feedback. In addition, the immediate nature of social media provides companies with an excellent way to promote contests, specials, or limited time offers.
Pay-Per-Click (PPC) or other types of search engine marketing (SEM) are paid ads inserted into search engine results pages (SERPs), websites, or apps. PPC is a crucial element in driving traffic to your website, drawing attention to marketing campaigns, and raising brand awareness.
Search engine optimization (SEO) is the companion to PPC, and the two work in concert to drive traffic to your site. SEO is the basis for how search engines rank websites and determines where your site is listed on a SERP.
The better your SEO, the better your chances of showing up higher on a SERP. Of course the higher you place on a SERP, the higher the chances of people clicking on your site.
SEO can be broken down into two distinct types – local and organic. Both of these types are crucial to getting your business found online.
Local SEO is designed to provide information about specific physical locations, while organic SEO is more about driving traffic to a business’s online presence. Most businesses use both local and organic SEO to drive traffic.
Buyer personas are fictional customer representations that businesses create to help them understand their target markets. If you have multiple distinct customer bases, buyer personas help you create content for those different bases.
Instead of creating one general campaign, buyer personas give you a specific customer to write content for. A different campaign is usually created for each persona, helping businesses target specific segments of the market in order to appeal more directly to them.
There may be other areas where your business is present on the internet. These areas are a part of digital marketing as well. Anywhere your company is found online is a part of digital marketing – after all, the point of having an internet presence is to attract business, and attracting business is the point of marketing.
Digital SWOT Analysis
A Digital SWOT analysis uses the same framework (strengths, weaknesses, opportunities, and threats), but with a digital focus. Questions should be centered on the digital aspects of the business and the team should be made up of appropriate personnel.
All of the above areas of digital marketing should be included in your analysis, and every aspect of your online presence should be analysed both by itself and as a part of a whole.
This way you will get the most complete understanding of your digital marketing efforts and standing, as well as a better idea of the future of digital marketing.
Here are some of the areas to cover, as well as specific aspects of those areas. (note: this list is a guide only – your business will have its own needs that may not be covered here.)
Your website analysis should include the following areas of your site:
- Overall design
- Lead generation pop-ups
- Meta data
- Landing pages
- Analytics data
Social media analysis should cover:
- Posting times
- Analytics data
- Types of content posted
Your PPC campaigns should be analysed for:
- Ad Rank
- Quality Score
SEO analysis should include:
- SERP Ranking
- Meta data
- Directory listings
- NAP info
Buyer persona analysis can’t be conducted in the same manner as the other items, but a review of your buyer personas should be done regularly. Sales data should be used to confirm that your personas are up-to-date with your current demographics to ensure that you’re targeting the right markets.
How to Perform a Digital SWOT Analysis
Doing a digital marketing SWOT analysis is a little more complicated than simply making a list. Before you begin, there are things you can do to help ensure your success.
We’re going to start with a list of best practices for your SWOT analysis:
- Take your time. A SWOT analysis is a time consuming process – putting together a team, research, the analysis itself, and finally taking action on issues – it may take weeks or even months of work before the process is complete.
- Be honest. It’s not going to help anyone if people are afraid to be honest about weaknesses (or anything else). If you have bad information going in, you’ll get bad information coming out.
- Use with other tools. A SWOT analysis is a great tool, but it doesn’t provide you with everything. Make sure you are using these analyses as a part of your retinue, not as the one and only answer to your problems.
- Don’t focus on the negative. Sometimes groups will focus on fixing the weaknesses and protecting against threats to the detriment of everything else. Don’t just focus on these aspects! Make sure you come up with a plan that prioritizes your responses according to what will do the most good for your business.
With these things in mind, you can begin the process. Don’t jump right into it, though – there are steps to follow when conducting a SWOT analysis.
Define Your Objective
It all starts with choosing an objective. Before you can do anything else, you need to know what you’ll be analysing. An analysis covering the entire business will have different needs than one dealing with a specific marketing campaign or product.
Make sure you have an objective laid out before you do anything else, and stick to it. There will be a lot of topics up for discussion during the analysis, so make sure your team focuses on the objective.
Pick Your Team
Now that you know what it is you want to accomplish, you can start selecting the best people for your team. It’s important to choose people with different specialities and points of view when making your selections.
It is unlikely that any one person will be an expert in every topic you need to discuss, so choose a team that has the knowledge and skills to provide you with the best information possible.
Make sure you include team members with differing opinions, as well. If everyone on your team already agrees (or is a “yes person”), then you won’t get a complete picture of your business needs.
Ask the Right Questions
Asking the right questions during your analysis will make sure you get answers that help your company make the best decisions. Clearly defined objectives will start you out on the right track, and asking the right questions will keep you on it.
While the specific questions will vary from business to business, there are some general ideas that apply everywhere.
- How is our product/service better than the competition?
- In what areas do we have more expertise than the competition?
- In what areas are we outperforming the competition?
- In what areas is the competition outperforming us?
- What experience are we lacking?
- What resources are we lacking?
- Is there more we can do for our existing customers?
- Are there potential markets we aren’t reaching?
- Are there new or existing technologies that can help?
- What is the competition doing that we aren’t?
- How is the market changing?
- Are there any pending government regulations that might affect us?
There are certainly going to be more specific questions that you’ll need to ask that depend on your particular markets and objectives, but these questions should act as the basis for any SWOT analysis.
Do Your Research
GIGO – garbage in, garbage out – sums up this section perfectly. If you start with bad information, you’ll end up with bad information. You need to research topics thoroughly and make sure that you get the best information possible.
You should verify any information whenever possible and vet your sources. If a source is questionable, don’t use it. Make sure you don’t use secondary sources, either. Using primary sources reduces the possibility that the information was misinterpreted by someone along the way.
When you use a primary source, if the information is misinterpreted, at least it was you who made the mistake.
Research can be a time consuming process, but it’s important that you don’t take shortcuts here. Improper research can invalidate all of your conclusions. Take your time and get the best information possible.
Keep in mind that certain information may not be available, or certain sources may be less than ideal when it comes to the competition and the market.
Sometimes using questionable sources or not having all of the information you’d like is necessary. Just keep this in mind when you are drawing your conclusions.
This is, after all, the best policy.
You need to make sure that team members understand that hiding or ignoring facts can destroy this entire process.
Sometimes employees can feel like their work is being scrutinized during this process, which can lead them to present things in a less harsh light, or to cherry pick facts about their work.
It’s important to the SWOT analysis that this not be allowed to happen. GIGO applies here as well – if bad information is introduced into the system, bad information will come out the other end.
Define Your SWOT
The individual strengths, weaknesses, opportunities, and threats will vary greatly from one company to the next, so it won’t be possible to discuss specifics here, but there are a few guidelines you can follow to keep you on track.
- For something to be considered a strength, it needs to be unique to your company. Anything in this category must be unparalleled in the industry.
If you produce a quality product, it can only be considered a strength if it is objectively better than the competition.
Many people consider iPhones superior to Android devices, but objectively they are equal.
- Weaknesses should include anything your competition does better than you. Here’s the time for more honesty! Don’t rate your product higher out of pride.
Pepsi knows their advertising is nowhere near Coke levels, and a SWOT analysis is the perfect time to admit it.
- For opportunities and threats, outside factors are the key. A PEST analysis should be done here to help complete this section of the SWOT analysis.
PEST (political, economic, social, and technological) analyses highlight the main outside forces that affect a business.
Remember that strengths and weaknesses should be benchmarked against the competition. The quality of your product is relative to the quality of the competition’s.
Also, make sure you take into account perceived value vs. real value. The longer a company has been on top, the more there is a danger of them believing they are still the best based on history instead of data.
Data should be used to reinforce any decisions – in a SWOT analysis or anywhere else.
Even in the digital age, and even for a digital marketing SWOT analysis, a whiteboard should be used. Whiteboards help people focus their attention, visualize problems, and take ownership of ideas.
Team members should be encouraged to make additions to the board personally. This fosters a sense of contribution and ownership that a digital document may not.
Pro tip – make sure you buy the markers that wipe off!
Take Action on SWOT Analysis Results
You’ve done your prep work, your research, you put together a team of digital marketing geniuses, you asked all the right questions, and you came up with some quality answers. Now the hard work begins!
Now is when you take what you learned and you craft a marketing plan that will lead your company into the future.
Not everything you’ve learned is of equal importance. Some items will need immediate attention, while others are more of the “if we have the time” sort of things. Sure, there’s an opportunity to expand in Newfoundland, but maybe first you should take care of the supply chain issues you’re having.
Make sure you look at every item on your list, not just weaknesses and threats, then decide what can do your business the most good or the most harm and focus your attention there first.
Here is one of the traps we talked about earlier, so be careful. Too many businesses focus on the weaknesses and threats part of the analysis when these aren’t necessarily the most important items on the agenda.
Plan Campaigns Using SMART Goals
SMART stands for Specific, Measurable, Assignable, Realistic, and Time-bound. It’s a way of ensuring that you set goals, measure their performance, and stick to a schedule.
- Specific – Choose specific areas to work on. A goal of increasing overall sales is a good idea, but increasing sales of a specific product in a specific region by a specific amount gives you a much more actionable plan.
- Measurable – Determine the metrics you will use to gauge success before you begin. Knowing beforehand what is considered a success helps you plan the party when you reach your goal.
- Assignable – Specify a person or group who is responsible for the task. This way you know either who to blame or who to steal the credit from.
- Realistic – Make sure your goals are achievable. Assigning an impossible task will lower company morale and lead employees to believe that their efforts are wasted.
- Time-bound – Set a specific time frame for each goal. Time frames provide a sense of urgency and also lets the employee/team know that they won’t be doing this forever.
Set specific, measurable, and realistic goals, assign the right people, and give them a time frame to completion.
Have your team provide regular status reports detailing their progress and make sure that they’re meeting their goals. If they have any issues or need any support, make sure that they get what they need as soon as possible.
SMART goals give you focus and allow you to track the progress of your projects. They also allow you to show that progress to your superiors, which is important when it comes time to take credit.
A SWOT analysis is a crucial part of planning for the future of your company. Understanding where your business stands in relation to the competition and to the market in general is the first step in moving your company into the future.
By following the above steps, you can learn what you need to do to get ahead of the competition and stay there.
Now that you’re ready to do a SWOT analysis, download our SWOT Analysis Checklist to help get you started!