Before you start writing a marketing plan, you have to learn what the strong and weak points of your business are, what opportunities and risks can occur in its environment. In other words, you should know what the strategic position of the company is and its products on the market. Here, SWOT analysis can be helpful. On this basis, appropriate conclusions for further actions can be drawn.
SWOT analysis is carried out by listing strengths and weaknesses of the company, opportunities and risks. The easiest way to do that is to fill a table with four fields, just like the one below.
Opportunity is a possibility ( present in the surroundings) of positive changes in profits and sales. It is often misread as an unexpected benefit. Yes, it is a benefit, but it is rather a result of research and analyses. Opportunity means larger profits for example, due to attending to a new market segment etc.
In contrast, a threat is an event that can be negative, if certain remedial measures are not taken. The risks is often due to the fact that competition of the company has seen a chance for itself and wants to grab that chance at your expense.
Opportunities and threats underline some problems that require quick decisions, while strengths and weaknesses allow you to choose a long-term strategy. While the opportunities and threats come from outside the organization, its strengths and weaknesses relate to what is inside it. Determine what is the strength of your business, and what is its weakness.
Seeking suitable features to complement the above table, it is important to take into consideration relevant aspects of your business (e.g. customer service, marketing and advertising, financial resources, staff, production, distribution network). Carry out a SWOT analysis for company’s key products, key market segments, the strongest competition, the key markets.
Examples of strengths:
– the company has a good network of distribution,
– qualified managers,
– a good reputation.
Examples of weaknesses:
– the company has strong competitors with an established market position,
– long time deliveries,
– insufficient network of distribution.
Examples of threats:
– the announcement of the competition entry from another country,
– loss of a major customer of the company,
– loss of interest in innovative products in the sector.
Examples of opportunities:
– investments that strengthen the company’s position in relation to the competition,
– the company was acquired by another company, which will decrease the cost of buying innovation,
– the government has announced an increase in spending on innovativeness.
Featured factor can be both a strong and a weak point or both an opportunity and a risk. You should be able to evaluate its importance, because neither every risk has the same ability to influence, nor all strengths will be of the same force to support the company, etc. Therefore it is good to define the importance and the rank of strengths and weaknesses, opportunities and risks taken into consideration (see page swottows.com to know how to evaluate them).
The SWOT analysis will vary depending on the size and type of company it deals with, the market in which the company operates, its management’s objectives (e.g. by placing a stronger emphasis on some aspects, and the other on the underdog). On the basis of the performed SWOT analysis one can try to make the choice of a strategy (see. article SWOT analysis).