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Ask the Experts: SWOT Analysis

May 5, 2011

Last month, you asked Chuck Raymond, the Marketing Manager at Geosyntec Consultants, a few questions. Today, Chuck responds to: “I’ve heard you talk before about the importance of performing a SWOT Analysis. Can you tell us a little bit about why you think it’s so important, and provide any tips for preparing a thorough one?”

One of the most important tasks any firm can do to maximize its marketing ROI is to do a SWOT analysis on themselves. SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats. The reason this strategic analysis is so important is that it can provide helpful information in benchmarking your firm’s staff, talents, and capabilities with the overall competition, and can help you establish a niche within the marketplace. Also, a thorough SWOT analysis can provide a guide to where you want to go and help you avoid areas you don’t want to go. Remember— without a map, any road will lead you there.

An analysis of your firm’s strengths and weakness is an internally focused exercise, typically using primary market research data. An analysis of opportunities for your firm and what the threats might be in the marketplace is more externally focused, typically using secondary data, that looks at factors that are outside your firm’s control. This difference is very important, and any confusion can not only make the analysis difficult but the results ambiguous.

Without going into a MBA short course, the elements of a SWOT analysis are:

  • Strengths: Internal characteristics that make your firm strong and differentiate it in the marketplace.
  • Weaknesses: Internal characteristics that make your firm less competitive.
  • Opportunities: External chances to increase your firm’s share of the marketplace.
  • Threats: External factors that could mean a loss of market share or a decrease in business.

An effective SWOT analysis is done as a group session where ideas are tossed out almost in a brainstorming fashion. As a first pass, there are no bad ideas— these can be weeded out as the process plays itself out. It is also very helpful if the participants are from different functional parts of the firm. In addition to marketing staff, you may want to consider having the President/CEO, technical staff, CFO, accounting, and others (even clients) participate since they will have different perspectives, or be aware of SWOT factors that others may not.

The key aspect though of a SWOT analysis is what you do with the results. If you go through this exercise, do nothing with the resulting information, and just continue doing business as usual, then you have wasted a lot of time and money. Your strengths need to be capitalized on, your weaknesses need to be compensated for or fixed, opportunities need to be acted upon, and threats need to be identified and minimized. You need to come up with specific, actionable items, tied to a person or group of people that will be held accountable to act upon them within a certain timeframe. If you do this and do it effectively, you should see positive results in your marketing program.

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