Whilst most often implemented to summarise the internal strengths and weaknesses of an activity or business, and the opportunities/threats available to them, this framework can help your business in other ways too. This can provide a precursor to any company action; including decisions about new policies, the implementation of new technology, and trends or product development.
Lets look at each of the four factors:
These are positive attributes internal to the organisation/situation. This could be a good reputation, brand equity, access to distribution networks, financial resources, or experience and knowledge.
These are also internal factors, and can impede on your businesses ability to meet its objectives. These could be weak brand recognition, high cost structure, lack of patent protection, gaps in capabilities, timescales and deadline pressures, team morale and leadership.
These lay outside of the businesses operating environment. A good starting point is to ask yourself what political, economic, social-cultural, or technology (PEST) changes are taking place within your marketplace? These could include an unfulfilled customer need, loosening of regulations of trade barriers, market developments, technological developments and innovation, and major tenders.
External factors beyond your control that could place the project or organisation at risk. This could include shifts in customer tastes, development of substitute products or new market entrants, political and economic instability, and legal influences.
This model helps to provide a lens through which you can see your business objectively, eliminating the need to consult an external business adviser. Going beyond this, you need to highlight the most important issues previously identified, and rank these in order of importance.
To do this, first order each individual strength and weakness according to their importance for the business within its industry, giving them a number from 0.01 (not important), to 1.0 (very important). When doing this you must make sure that when calculated together they equal 1.0. Following this, the next step is to assign each factor a score from 1-3 according to whether you rate the factor as a major strength/weakness (3) or minor (1) to the company. Finally, by multiplying these two numbers of importance and rating together you will end up with a score enabling you to prioritise strengths and weaknesses in terms of quantifiable numbers.
Similarly, opportunity and threats can be quantified by assigning a number of importance according to the extent external factors might impact the business, 0.01 being no impact, and 1.0 being a very high impact. Again, the sum of all these factors should equal 1. Next, rate the probability of this occurrence having an impact on the business, rated from 1-3 (low probability-high probability). Multiplying importance by probability will provide you with a score in which you will be able to priorities opportunities and threats, being careful to pay attention to the factors having the highest score.
Whilst many businesses can ‘fill in the boxes’, some fail to follow up with the next step, which should be to assess the matches across the matrix to determine future opportunities and counter identified risks. Looking at the SWOT matrix, strengths/opportunities are potentially attractive options, and naturally a priority.
These should be the quickest to implement because they provide the greatest potential Return on Investment (ROI).
Noticeably higher in risk is weaknesses/threats, with a need to assess capability gaps and defend in specific and controlled ways. Ask yourself, is there controlled plans we can put in place to avoid or defend them?
Whilst less obvious, the middle group opportunity (weakness/opportunity matches) should not be dismissed, or your business risks forfeiting what could be a first mover advantage. Finally, strength/threat matches Investment requires awareness, planning and implementation so the organisation is properly informed, meaning that there are no hidden surprises.
As well as identifying strengths, weaknesses, opportunities and threats for your own business, you should also consider these for your competition. Pinpointing what they do really well and not so well allows you to work out a strategy for your business to do it even better and gain competitive advantage.
This gives you an idea of just some of the ways you stand to learn from both the strong and more weak parts of your business model to increase your chances of success!
Remember to ask yourself:
How can we use our strengths to take advantage of the opportunities identified?
How can we use these strengths to overcome the threats identified?
What do we need to do to overcome the identified weaknesses in order to take advantage of the opportunities?
How will we minimise our weaknesses to overcome the identified threats?
Want to learn more?
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As well as the marketing plan template, we also provide two fully completed example marketing plans showing a B2B Manufacturing Business and B2C Fitness Coach business to act as a reference. As a bonus, you also get a marketing strategy eBook full of helpful hints on practical application.
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