3 Benefits of Including a SWOT Analysis in Your Marketing Plan

Dec 9, 2014

A detailed SWOT analysis has become an important component of an effective and actionable marketing plan because it provides a critical view of the company’s current and forward-looking position in the marketplace. SWOT analysis identifies a company’s strengths that can be capitalized on, weaknesses that must be compensated for, opportunities that can be exploited, and threats that must be overcome in order to realize those opportunities.

swot analysis

Exactly What is SWOT Analysis and How Will it Help My Company?
Harvard-educated business and management consultant Albert S. Humphrey championed the use of SWOT analysis during the 1960s as a strategic planning method; the actual creator has apparently been lost to history. The SWOT model is used to assess and evaluate a business venture in terms of:

  • Strengths – This section of the SWOT analysis typically focuses on the company’s competitive advantages. These advantages may become a focal point in the overall marketing plan. For example, a business with strong production and quality attributes may position itself as the leader in high-quality products.
  • Weaknesses – By evaluating and understanding its weaknesses and limitations, a company is in a better position to seek ways to either overcome or downplay them.
  • Opportunities – This section lays out specific areas of improvement and growth. By regular review of appropriate market opportunities, a company is well positioned to take advantage of changes in the marketplace.
  • Threats – External threats to a company may include competitive activities, environmental issues, governmental regulations, the impact of new and emerging technologies, and changing consumer tastes and trends. A thorough assessment of possible threats that may jeopardize the business allows management to take appropriate proactive steps to deflect or minimize the damage.

Competitive analysis is an important part of any marketing plan, and a SWOT analysis of your major competitors will provide valuable insights to help your company compete more effectively. While you won’t have access to the full range of data for your competitors, create as complete a picture of your competitor’s strengths and weaknesses as the available data allows.

How to Conduct a SWOT Analysis
The first step is to designate a team of employees from your company to conduct the actual SWOT analysis. Be sure to include people from all levels of your organization. You want to ensure that your entire business and its day-to-day operations are evaluated from as many perspectives as possible.

Next you should analyze your company’s strengths. These are the internal factors over which you have the most control. Your goal is to identify as many positive factors that can be used to develop a competitive differential for your business. Focus on those factors that will add value to the customer experience.

In the next stage you will analyze your company’s weaknesses and limitations. These are the internal factors that will hamper your marketing efforts if left unaddressed. Any critical limitations that cannot be overcome should be downplayed in your marketing campaign.

Opportunities represent those factors that are external to your business that could be exploited to give your business a competitive advantage. Competitive weaknesses fall into this category, as do positive changes and trends in the marketplace.

Identifying the threats to your company is the final stage of SWOT analysis. Threats are external factors that will affect the success of your marketing efforts. Identify and prepare countermeasures for as many threats as possible.