Topic: To Perform SWOT Analysis

Message

    How to Perform SWOT Analysis

A valuable step in your situational analysis is assessing your firm's
strengths, weaknesses, market opportunities, and threats through a SWOT
analysis. This is a very simple process that can offer powerful insight
into the potential and critical issues affecting a venture. 

The SWOT analysis begins by conducting an inventory of internal
strengths and weaknesses in your organization. You will then note the
external opportunities and threats that may affect the organization,
based on your market and the overall environment. Don't be concerned
about elaborating on these topics at this stage; bullet points may be
the best way to begin. Capture the factors you believe are relevant in
each of the four areas. You will want to review what you have noted
here as you work through your marketing plan. The primary purpose of
the SWOT analysis is to identify and assign each significant factor,
positive and negative, to one of the four categories, allowing you to
take an objective look at your business. The SWOT analysis will be a
useful tool in developing and confirming your goals and your marketing
strategy. 

Some experts suggest that you first consider outlining the external
opportunities and threats before the strengths and weaknesses.
Marketing Plan Pro's EasyPlan Wizard will allow you to complete your
SWOT analysis in whatever order works best for you. In either
situation, you will want to review all four areas in detail. 

Strengths 

Strengths describe the positive attributes,tangible and intangible
attributes, internal to your organization. They are within your
control. What do you do well? What resources do you have? What
advantages do you have over your competition? 

You may want to evaluate your strengths by area, such as marketing,
finance, manufacturing, and organizational structure. Strengths include
the positive attributes of the people involved in the business,
including their knowledge, backgrounds, education, credentials,
contacts, reputations, or the skills they bring. Strengths also include
tangible assets such as available capital, equipment, credit,
established customers, existing channels of distribution, copyrighted
materials, patents, information and processing systems, and other
valuable resources within the business. 

Strengths capture the positive aspects internal to your business that
add value or offer you a competitive advantage. This is your
opportunity to remind yourself of the value existing within your
business. 

Weaknesses 

Note the weaknesses within your business. Weaknesses are factors that
are within your control that detract from your ability to obtain or
maintain a competitive edge. Which areas might you improve? 

Weaknesses might include lack of expertise, limited resources, lack of
access to skills or technology, inferior service offerings, or the poor
location of your business. These are factors that are under your
control, but for a variety of reasons, are in need of improvement to
effectively accomplish your marketing objectives. 

Weaknesses capture the negative aspects internal to your business that
detract from the value you offer, or place you at a competitive
disadvantage. These are areas you need to enhance in order to compete
with your best competitor. The more accurately you identify your
weaknesses, the more valuable the SWOT will be for your assessment. 

Opportunities 

Opportunities assess the external attractive factors that represent the
reason for your business to exist and prosper. These are external to
your business. What opportunities exist in your market, or in the
environment, from which you hope to benefit?

These opportunities reflect the potential you can realize through
implementing your marketing strategies. Opportunities may be the result
of market growth, lifestyle changes, resolution of problems associated
with current situations, positive market perceptions about your
business, or the ability to offer greater value that will create a
demand for your services. If it is relevant, place timeframes around
the opportunities. Does it represent an ongoing opportunity, or is it a
window of opportunity? How critical is your timing? 

Opportunities are external to your business. If you have identified
"opportunities" that are internal to the organization and within your
control, you will want to classify them as strengths. 

Threats 

What factors are potential threats to your business? Threats include
factors beyond your control that could place your marketing strategy,
or the business itself, at risk. These are also external – you have no
control over them, but you may benefit by having contingency plans to
address them if they should occur.

A threat is a challenge created by an unfavorable trend or
development that may lead to deteriorating revenues or profits.
Competition – existing or potential – is always a threat. Other threats
may include intolerable price increases by suppliers, governmental
regulation, economic downturns, devastating media or press coverage, a
shift in consumer behavior that reduces your sales, or the introduction
of a "leap-frog" technology that may make your products, equipment, or
services obsolete. What situations might threaten your marketing
efforts? Get your worst fears on the table. Part of this list may be
speculative in nature, and still add value to your SWOT analysis. 

It may be valuable to classify your threats according to their "seriousness" and "probability of occurrence." 

The better you are at identifying potential threats, the more likely
you can position yourself to proactively plan for and respond to them.
You will be looking back at these threats when you consider your
contingency plans. 

The Implications 

The internal strengths and weaknesses, compared to the external
opportunities and threats, can offer additional insight into the
condition and potential of the business. How can you use the strengths
to better take advantage of the opportunities ahead and minimize the
harm that threats may introduce if they become a reality? How can
weaknesses be minimized or eliminated? The true value of the SWOT
analysis is in bringing this information together, to assess the most
promising opportunities, and the most crucial issues. 

An Example 

AMT is a computer store in a medium-sized market in the United States.
Lately it has suffered through a steady business decline, caused mainly
by increasing competition from larger office products stores with
national brand names. The following is the SWOT analysis included in
its marketing plan. 

Strengths 

Knowledge. Our competitors are retailers, pushing boxes. We know
systems, networks, connectivity, programming, all the Value Added
Resellers (VARs), and data management. 

Relationship selling. We get to know our customers, one by one. Our direct sales force maintains a relationship. 

History. We've been in our town forever. We have the loyalty of customers and vendors. We are local. 

Weaknesses 

Costs. The chain stores have better economics. Their per-unit costs of
selling are quite low. They aren't offering what we offer in terms of
knowledgeable selling, but their cost per square foot and per dollar of
sales are much lower. 

Price and volume. The major stores pushing boxes can afford to sell for
less. Their component costs are less and they benefit from volume
buying with the main vendors. 

Brand power. Take one look at their full-page advertising, in color, in
the Sunday paper. We can't match that. We don't have the national name
that flows into national advertising. 

Opportunities 

Local area networks. LANs are becoming commonplace in small businesses,
and even in home offices. Businesses today assume LANs are part of
normal office work. This is an opportunity for us because LANs are much
more knowledge and service intensive than the standard off-the-shelf
PC. 

The Internet. The increasing opportunities of the Internet offer us
another area of strength in comparison to the box-on-the-shelf major
chain stores. Our customers want more help with the Internet and we are
in a better position to give it to them. 

Training. The major stores don't provide training, but as systems
become more complicated with LAN and Internet usage, training is more
in demand. This is particularly true of our main target markets. 

Service. As our target market needs more service, our competitors are
less likely than ever to provide it. Their business model doesn't
include service, just selling the boxes. 

Threats 

The computer as appliance. Volume buying and selling of computers as
products in boxes, supposedly not needing support, training,
connectivity services, etc. As people think of the computer in those
terms, they think they need our service orientation less. 

The larger price-oriented store. When they have huge advertisements of
low prices in the newspaper, our customers think we are not giving them
good value. 

Author	Message
sudha Newbie Joined: 04Apr2007 Online Status: Offline Posts: 1	Topic: To Perform SWOT Analysis Posted: 04Apr2007 at 12:27am
	How to Perform SWOT Analysis A valuable step in your situational analysis is assessing your firm's strengths, weaknesses, market opportunities, and threats through a SWOT analysis. This is a very simple process that can offer powerful insight into the potential and critical issues affecting a venture. The SWOT analysis begins by conducting an inventory of internal strengths and weaknesses in your organization. You will then note the external opportunities and threats that may affect the organization, based on your market and the overall environment. Don't be concerned about elaborating on these topics at this stage; bullet points may be the best way to begin. Capture the factors you believe are relevant in each of the four areas. You will want to review what you have noted here as you work through your marketing plan. The primary purpose of the SWOT analysis is to identify and assign each significant factor, positive and negative, to one of the four categories, allowing you to take an objective look at your business. The SWOT analysis will be a useful tool in developing and confirming your goals and your marketing strategy. Some experts suggest that you first consider outlining the external opportunities and threats before the strengths and weaknesses. Marketing Plan Pro's EasyPlan Wizard will allow you to complete your SWOT analysis in whatever order works best for you. In either situation, you will want to review all four areas in detail. Strengths Strengths describe the positive attributes,tangible and intangible attributes, internal to your organization. They are within your control. What do you do well? What resources do you have? What advantages do you have over your competition? You may want to evaluate your strengths by area, such as marketing, finance, manufacturing, and organizational structure. Strengths include the positive attributes of the people involved in the business, including their knowledge, backgrounds, education, credentials, contacts, reputations, or the skills they bring. Strengths also include tangible assets such as available capital, equipment, credit, established customers, existing channels of distribution, copyrighted materials, patents, information and processing systems, and other valuable resources within the business. Strengths capture the positive aspects internal to your business that add value or offer you a competitive advantage. This is your opportunity to remind yourself of the value existing within your business. Weaknesses Note the weaknesses within your business. Weaknesses are factors that are within your control that detract from your ability to obtain or maintain a competitive edge. Which areas might you improve? Weaknesses might include lack of expertise, limited resources, lack of access to skills or technology, inferior service offerings, or the poor location of your business. These are factors that are under your control, but for a variety of reasons, are in need of improvement to effectively accomplish your marketing objectives. Weaknesses capture the negative aspects internal to your business that detract from the value you offer, or place you at a competitive disadvantage. These are areas you need to enhance in order to compete with your best competitor. The more accurately you identify your weaknesses, the more valuable the SWOT will be for your assessment. Opportunities Opportunities assess the external attractive factors that represent the reason for your business to exist and prosper. These are external to your business. What opportunities exist in your market, or in the environment, from which you hope to benefit? These opportunities reflect the potential you can realize through implementing your marketing strategies. Opportunities may be the result of market growth, lifestyle changes, resolution of problems associated with current situations, positive market perceptions about your business, or the ability to offer greater value that will create a demand for your services. If it is relevant, place timeframes around the opportunities. Does it represent an ongoing opportunity, or is it a window of opportunity? How critical is your timing? Opportunities are external to your business. If you have identified "opportunities" that are internal to the organization and within your control, you will want to classify them as strengths. Threats What factors are potential threats to your business? Threats include factors beyond your control that could place your marketing strategy, or the business itself, at risk. These are also external – you have no control over them, but you may benefit by having contingency plans to address them if they should occur. A threat is a challenge created by an unfavorable trend or development that may lead to deteriorating revenues or profits. Competition – existing or potential – is always a threat. Other threats may include intolerable price increases by suppliers, governmental regulation, economic downturns, devastating media or press coverage, a shift in consumer behavior that reduces your sales, or the introduction of a "leap-frog" technology that may make your products, equipment, or services obsolete. What situations might threaten your marketing efforts? Get your worst fears on the table. Part of this list may be speculative in nature, and still add value to your SWOT analysis. It may be valuable to classify your threats according to their "seriousness" and "probability of occurrence." The better you are at identifying potential threats, the more likely you can position yourself to proactively plan for and respond to them. You will be looking back at these threats when you consider your contingency plans. The Implications The internal strengths and weaknesses, compared to the external opportunities and threats, can offer additional insight into the condition and potential of the business. How can you use the strengths to better take advantage of the opportunities ahead and minimize the harm that threats may introduce if they become a reality? How can weaknesses be minimized or eliminated? The true value of the SWOT analysis is in bringing this information together, to assess the most promising opportunities, and the most crucial issues. An Example AMT is a computer store in a medium-sized market in the United States. Lately it has suffered through a steady business decline, caused mainly by increasing competition from larger office products stores with national brand names. The following is the SWOT analysis included in its marketing plan. Strengths Knowledge. Our competitors are retailers, pushing boxes. We know systems, networks, connectivity, programming, all the Value Added Resellers (VARs), and data management. Relationship selling. We get to know our customers, one by one. Our direct sales force maintains a relationship. History. We've been in our town forever. We have the loyalty of customers and vendors. We are local. Weaknesses Costs. The chain stores have better economics. Their per-unit costs of selling are quite low. They aren't offering what we offer in terms of knowledgeable selling, but their cost per square foot and per dollar of sales are much lower. Price and volume. The major stores pushing boxes can afford to sell for less. Their component costs are less and they benefit from volume buying with the main vendors. Brand power. Take one look at their full-page advertising, in color, in the Sunday paper. We can't match that. We don't have the national name that flows into national advertising. Opportunities Local area networks. LANs are becoming commonplace in small businesses, and even in home offices. Businesses today assume LANs are part of normal office work. This is an opportunity for us because LANs are much more knowledge and service intensive than the standard off-the-shelf PC. The Internet. The increasing opportunities of the Internet offer us another area of strength in comparison to the box-on-the-shelf major chain stores. Our customers want more help with the Internet and we are in a better position to give it to them. Training. The major stores don't provide training, but as systems become more complicated with LAN and Internet usage, training is more in demand. This is particularly true of our main target markets. Service. As our target market needs more service, our competitors are less likely than ever to provide it. Their business model doesn't include service, just selling the boxes. Threats The computer as appliance. Volume buying and selling of computers as products in boxes, supposedly not needing support, training, connectivity services, etc. As people think of the computer in those terms, they think they need our service orientation less. The larger price-oriented store. When they have huge advertisements of low prices in the newspaper, our customers think we are not giving them good value. Post Resume: Click here to Upload your Resume & Apply for Jobs

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