Notes on the SWOT Analysis for Strategists

The trusty SWOT analysis has been around for so many years now. To be specific, people started using this tool around the 1960s. It was developed by Albert Humphrey of Stanford University which was actually based on the Team Action Model research project. Basically,

The SWOT analysis is considered to be one of essential tools that almost all companies use to carefully assess the industry. In addition, companies also use such tool to be able to come up with some strategies to keep up with the tight competition in the market.

The first step in planning just about any business activity is to conduct a SWOT (Strength Weakness Opportunity Threat) analysis on your business. Surprisingly, many businesses have never done a SWOT analysis… but advertising planning time of year is as good an excuse as any to get this vital business function done. Today we investigate the whys and also the hows of SWOT analyses in an advertising planning context.

Why Do I Need a SWOT Analysis for Ad Planning?

To begin creating your advertising planning strategy, you’ll need two key pieces of information. These are:
– An assessment of the marketplace.
– An assessment of how your company and product/service fits into the marketplace.

It is useful to think about your business’ positioning in the marketplace in terms of what your current assets are (Strengths), what opportunities exist to leverage those assets (Opportunities), the liabilities or weaknesses of your company (Weaknesses), and the ways that others might exploit those weaknesses (knowingly or unknowingly), to take clients or profit or reputation away from your business (Threats). You could answer the two questions above any way you liked… but the advantage in doing a SWOT analysis is that the path is well-trodden.

How to Conduct a SWOT Analysis

You’ll need to consider the features of your company itself and the products or services you sell as a unit when conducting your SWOT analysis for ad planning purposes. However, in most industries, the product or service will guide the end advertising planning strategy far more.

Start by analyzing your company’s and products’ strengths and weaknesses. These are internal factors. Some examples of strengths which may apply to your company, or may help you identify your unique strengths, include:
– Your physical location
– The quality of your products
– The innovativeness of your products
– Your quality control procedures
– Specialist expertise

Some examples of weaknesses that may be relevant to your ad planning strategy:
– Lack of differentiation (or USPs) with regard to your products or services
– Poor reputation
– Relative newness in the market
– Products or services with quality issues

If your Strengths and Weaknesses are internal factors affecting your business, Opportunities and Threats are external factors. Your list of Opportunities may include things like:
– A competitor vacating the market
– New markets – either new platforms, such as the internet, or new export markets, for example
– Changing social perceptions (note that these can be opportunities or threats… sometimes the same shift can be both things to the same company!)
– Changing government regulations (again, they can be threats or opportunities)

Some examples of Threats facing your organization, product or service may be:
– Changing technologies that outdated your product
– New competitors
– A heavily price-driven market that encourages price war.

Most Threats and Opportunities fit into one of the six PESTLE factors – Political, Economic, Social, Technological, Legal and Environmental factors.

Having a sound understanding of your products (and company’s) Strengths, Weaknesses, Opportunities and Threats is the first key step in formulating an advertising planning strategy.

Importance of Conducting a SWOT Analysis to Your Business

SWOT Analysis done by experts help the company or organizations in analyzing their potential and developing strategies for their business. A review of a well crafted SWOT Analysis Sample enables the investors to overview the business they’re being asked to get involved in.

Before understanding the benefits of conducting SWOT Analysis it is important to understand first what SWOT means. SWOT is a combination of four letters that stand for Strength, Weakness, Opportunities and Threats. In simple words, SWOT can be defined as a company’s actual business review which is based on current facts and situation analysis that provides an insight into the future consequences and threats. A well-written analysis is a simpler description of the strategic position of an organization that is less complex and easy to understand as it does not involve the technical aspects. In general, one can say that it is the meat of a business proposal or the introduction of a more detailed business plan.

Following are the benefits of getting a SWOT Analysis Sample done from the company’s point of view:

A SWOT Analysis Sample would enable the management to acknowledge the strengths and weaker areas of business and work towards preparing better strategies for improving them.

It helps the management to overview the internal factors as well as external factors and the distinctive capabilities of the organization that is used in favor of the company’s development.

It provides the management with a better understanding of the internal strengths and the external threats so that they can adapt to better policies for changing threats into opportunities.

With the help of a well-researched analysis, the management can respond to the opportunities quickly and maximize their profit share.

Following are the benefits of getting a SWOT Analysis Sample done from the investor’s point of view:

A nicely drafted SWOT Analysis Sample would bring in more investment for the company by inspiring confidence in the investors for initiating their moves.
The investors would be in a better position to evaluate the exact return-on-investment (ROI) by comparing the sums to be invested in a project with the earnings expected over the period of the investment.

It provides the investors with a better understanding of the context for the business being proposed, allowing them to observe what’s happening with that business rather than giving them complex business statistics and technical details.

It is one of the most crucial aspects that can help the investors immensely in their decision-making process and review of their Capital Investment analysis.

With a better understanding of their Capital Investment Analysis, the investors will be in a much better position to evaluate their profit share and risk factors as the business involves a large sum of money.

A SWOT Analysis can help the management and the investors in numerous ways. Lucintel is a premier global market research and management consulting firm that creates excellent analysis reports for various segments of the industry.

About Sandra Nelson