The purpose of a SWOT Analysis is to evaluate the current position of your brand or product relative to achieving a specific objective. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. For marketers, a SWOT can be a useful tool as part of a strategic planning process. It requires identifying internal Strengths and Weaknesses that either help or harm your ability to achieve your objective. It also involves identifying external Opportunities and Threats that either provide an advantage or place a barrier to achieving the objective. A two-by-two matrix is used to build the SWOT Analysis. Once completed, you can better understand your competitive position and identify potential actions.
How are we currently positioned based on internal and external factors?
- Identify the objective that will frame your SWOT Analysis. All factors listed in the SWOT need to have a material impact on your ability to achieve this objective (e.g., grow market share by 20%).
- Considering this objective, identify the most important internal factors that increase your ability to achieve it. For example, brand equity or intellectual property. Write these in the Strengths quadrant.
- List the most important internal factors that reduce your ability to achieve the same objective. For example, reputation issues or gaps in expertise. Write these in the Weaknesses quadrant.
- List the most important external factors that are favourable to you which you may potentially exploit to your advantage. For example, new markets or customer trends. Write these in the Opportunities quadrant.
- List the most important external factors that present challenges to you, that you may need to mitigate to achieve your objective. For example, new competitors or declining economy. Write these in the Threats quadrant.
- Once completed, look for connections between internal and external factors to find strategic priorities.
- Complete as a team to align on an objective and build a common understanding of competitive position.
- Update your SWOT Analysis when your objective, brand, or marketplace changes significantly.
The SWOT Analysis is credited to Albert S. Humphrey