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Why and how the SWOT analysis is still an essential marketing effectiveness tool for modern marketers

The humble SWOT analysis has been a mainstay of the marketing planning process since it was first introduced in the 1960s by Albert Humphrey at the Stanford Research Institute. Humphrey and his research team conceived the SWOT model to bring accountability and objectivity to the planning process, and it has been popular ever since.

But it gets a little heat because of its overtly subjective nature and how many companies misuse it. This often means it doesn’t provide the value it is capable of.

In this post we’re breaking down why SWOT is still relevant and how to conduct a SWOT analysis in a way to provide deeper insights for better decision making – with the goal of demonstrating your status as a Pivotal Marketer.

Why is SWOT analysis still relevant for marketing professionals

SWOT stands for Strengths, Weaknesses, Opportunities, and Threat, which means a SWOT Analysis is a technique for assessing these four aspects of your business. Applied intelligently and expansively, you can use SWOT Analysis to make the most of the resources and foundations you have to help your organisation’s take advantage.

SWOT analyses can be used at the top of the business to identify major trends or in specific aspects of your business such as your positioning, pricing, distribution – anything where you need to fully understand your current situation in relation to the wider market and opportunity.

What can go wrong with a SWOT analysis

According to Harvard Business Review, one significant drawback of a SWOT analysis is that it can oversimplify the type and extent of strengths, weaknesses, opportunities and threats facing the company. This is often because it is a secondary research exercise, with the results created from curated internal thinking, without firm evidence to support.

SWOT analysis is used in marketing planning particularly as a basis for strategic and tactical planning but is often boiled down to a one-hour team meeting with post-it notes. And when implemented like this can ignore some of the strengths and weaknesses of other companies that could affect your business.

Other marketing models we’re discussing on the blog – and that are covered in all our CIM qualifications and modular and membership packages – such as Porters Five Forces are where you’d look for this.

Setting a strategy on ambiguous and unqualified insights is a dangerous approach to any organisation.

The modern approach to building an effective SWOT analysis

According to Harvard Business Review, one significant drawback of a SWOT analysis is that it can oversimplify the type and extent of strengths, weaknesses, opportunities and threats facing the company. This is often because it is a secondary research exercise, with the results created from curated internal thinking, without firm evidence to support.

SWOT analysis is used in marketing planning particularly as a basis for strategic and tactical planning but is often boiled down to a one-hour team meeting with post-it notes. And when implemented like this can ignore some of the strengths and weaknesses of other companies that could affect your business.

Other marketing models we’re discussing on the blog – and that are covered in all our CIM qualifications and modular and membership packages – such as Porters Five Forces are where you’d look for this.

Setting a strategy on ambiguous and unqualified insights is a dangerous approach to any organisation.

The modern approach to building an effective SWOT analysis

The priority has to be to replace anecdotal views with evidence based insight. Here’s how this can be applied to the four areas.

Strengths

Answer these three questions:

  • What do you do well?
  • What unique resources can you leverage?
  • What do third parties see as your strengths?

The very best way to understand what your core strengths are, is to ask your customers. There are a number of ways of doing this depending on your type of business. All have their place, but the key thing is you need to systemise this to make it a habit in the business and also to make it as easy as possible to collect.

Strengths ultimately become part of your competitive positioning so you’re looking to focus on things like strong employee attitudes, excellent customer service, large market share, personal relationships with customers, leadership in product innovation, highly efficient, low-cost manufacturing, high integrity, fast turnaround, great prices.

This can be achieved in the following three ways:-

  1. Direct to customer businesses like Sky, BT and British Gas will send text messages or links to simple surveys after an interaction. Often any interaction. It is designed to be highly focused on level of satisfaction and likelihood to recommend. Doing this regularly builds up a solid picture and also identifies areas to focus on.
  2. Professional services and b2b businesses can apply a similar model and also have their customer service or account representatives follow up after a purchase, consultation or product installation. Little and often is always better than a grand once a year survey few customers have time for.
  3. Replace the grand once a year survey above with a face to face discussion, always leading on asking for something good you did, something that wasn’t so good and asking for one specific thing you could improve. Then make sure you make good on that and report back.

These are essential tools in winning and retaining customers and also help you clarify what your strengths really are.

Weaknesses

Answer these three questions:

  • What are we less good at and needs improvement?
  • What resources do we lack?
  • What do competitors do better?

Like strengths, weaknesses are internal factors in a business. Identifying these can help identify areas of improvement. Doing this lets organisations design measures to rectify and control their weak points, which in turn help the company grow.

Objectively understanding your weaknesses helps establish to what extent you might need to spend time and resources improving them. Some organisations accept their weaknesses and focus only on their strengths, recognising you can’t be good at everything for everyone. This can then be used in positioning.

And if you need to, you can create defensive statements to justify why you focus on other things so you are very transparent and also consciously play up strengths at the same time.

Again this can be sourced from customer feedback, third party resellers and distribution agents and your own research.

Opportunity

Answer these three questions:

  • What opportunities are there available to us? (You may elect to conduct an Ansoff assessment based around product and market opportunities in the short term and long term.
  • How can you leverage your strengths?
  • What trends can you take advantage of?

Opportunities refer to favorable external factors that could give an organization a competitive advantage. For example, if a country cuts tariffs, a car manufacturer can export its cars into a new market, increasing sales and market share.

The reality is that opportunities can be found everywhere: in existing markets, in new markets, in new customer markets and in diversifying your product/service offering to new markets or different uses.

And with the rise of technology, we’re seeing massive shifts in markets, especially B2B  moving to direct to consumer (DTC), dropship outsourcing, ecommerce and use of online platforms and mobile apps.

Be sure to think outside the box and look at what is happening in related sectors to see if you can bring an “industry first” to your customers.

Threats

Answer these three questions:

  • What threats in the market can affect your plans?
  • What is your competition currently doing?
  • How significantly do your weaknesses expose you?

It is important not to plan in isolation, but it is also fair to say you shouldn’t base everything you do on the external operating environment. That said, seismic events like pandemics, Brexit, specific legal and compliance issues in some sectors and new laws will all have an impact and it’s important to be mindful of them.

Think too, about things that might impact your customers (not just you) as they will affect your customers decision making and spending power. This is particularly important in markets with global supply chains that are impacted by production and shipping delays thousands of miles away.

Think too outside of your traditional competitor thinking. We have to consider conglomerates with divisions beginning to specialise in what we do and solution providers in totally different categories that may offer cheaper or higher specification options.

Regularly run incognito Google searches to test “real world” search as this is what customers actually see when they are looking for solutions and solution providers.

Are you using SWOT, effectively?

This and many other essential marketing models are broken down in our CIM courses and membership and coaching packages.

To find out more about how MMC Learning can help you improve your career prospects, contact our team today.

Call 0161 826 4644 or click the book a discovery button below.