What is a SWOT Assessment and Why Is It Important?
There are many marketing tactics that continue to be taught in business marketing courses around the world. Why? Because they are very effective methods of understanding a company’s value proposition, target audience, competition, and industry positioning. Competition grows more fierce, each year, as business niches become saturated with a wide range of successful freelancers, small start-ups, and medium to large corporations – all working to maintain or exceed leadership positioning. The Internet leveled the online platform and provides an alternate dimension for thought leadership, brand awareness, and prospect or customer engagement. To gain an edge and differentiate a business, it is necessary to fully understand its current climate along with notable strengths or weaknesses for continued growth. This is why the SWOT assessment is such an important practice for companies, both large and small to adopt on an annual basis.
You’ve probably heard the acronym more than once if you took any business or marketing courses in college. SWOT represents an analysis of the following: Strengths, weaknesses, opportunities, and threats. This type of assessment provides an organized method of considering these key components for improved business success. The SWOT assessment is often included in any thorough business or marketing plan and is often reviewed and updated annually as part of regular business development, marketing, and financial planning functions. There is no special format or magic required for completing a SWOT analysis for your company. Often, this information is simply presented in bullet points under each main heading.
The true value in this exercise is in the useful information your key leaders obtain. This process arms these leaders with valuable intelligence that can be used to navigate all facets of business direction in order to achieve company growth goals and market positioning. The basics of a SWOT require an individual or a team to sit and mull over the following areas that concern a business.
- Strengths – Define and list some of your business’ strengths. What does it do really well? What do customers brag about? Is your technology/service/support exceeding client expectations? What makes your brand shine?
- Weaknesses – Define and list some of your business’ weaknesses. What could your company improve on? Is there a specific niche or industry you target that your presence is weak? Is there an internal workflow issue that creates some misalignment, or perhaps an issue with innovation?
- Opportunities: Define and list some opportunities that exist for your business. Are there any new niches or markets you wish to expand or enter into? Have any unique marketing or referral opportunities been presented? Do you have a new product to develop or launch? Investments in R&D?
- Threats: Define and list some threats that exist for your company. Include threats relevant to the economy and its impact on related industries or innovations and other wins by leading competitors. You can list any threats you think of that may be relevant to your particular business.
For a thorough SWOT you’ll also want to involve leaders from various business perspectives. This includes your colleagues, partner organizations, industry associations, and even selected customers. This gathering of information can be as low tech or as high tech as you desire. If you’re a freelancer or very small business, even making a few phone calls between associates and customers may provide some helpful insight. If you’d like to reach out to your entire customer base efficiently, consider using an online survey service like SurveyMonkey or Constant Contact. Have your leaders talk with their teams and prepare their own individual SWOT notes. Meet to hash out the most common denominators from your research. Organize and group this information together, then create a final consensus to be included in your annual business plan.