Although times have changed and the way of selling has turned 180 degrees, there are some techniques from the old marketing that we can inherit to know the scenario where a brand, a product, a company develops. That is the case with SWOT analysis .
Also known as SWOT or Dofa analysis, it is a very effective method to know everything that can influence the growth or decline of a brand, product or company.
Eventually, companies settle for knowing the competitive advantage that can help to highlight their product and, based on that data, create strategies to strengthen their brand and make it survive in the market .
It turns out that with SWOT analysis, there is not only an opportunity to know the advantages that put you above the competition. This method will give details that go beyond knowing channels to connect with the niche.
This type of analysis will make you see clearly everything that has to do with the process of reaching success and staying as firm as possible. External factors such as political, environmental and cultural can be managed if you know how to take a proper approach.
What is a SWOT analysis
SWOT is the acronym for Strengths, Weaknesses, Opportunities, and Threats . In what we know as SWOT or SWOT and it obeys the weaknesses, opportunities, strengths and threats. This method can be used both to make a simple personal decision, and to make decisions that change the direction of a company.
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There are those who believe that deciding the future of a company through SWOT analysis is simple, but the truth is that this goes beyond being aware of weaknesses and strengths.
In theory, it may sound very practical, but when you start to know details about the environment of your company, you will see that the matter is serious and there are many factors that affect the image of your brand.
Wha é says wikipedia?
“It is a tool to know the real situation in which an organization, company or project finds itself, and to plan a future strategy. This resource was created in the early 1970s and produced a revolution in the field of business strategy. The objective of the SWOT analysis is to determine the competitive advantages of the company under analysis and the generic strategy to be used by the same that suits it best based on its own characteristics and those of the market in which it operates. “
To give continuity to the concept of Wikipedia , we believe that those who practice it have solid foundations to create and implement strategies that refuse to die despite the difficulties of the environment. This is so, because from now on, you can predict what will happen in the future.
Wha é says Thompson and Strickland on the SWOT analysis?
Both earned part of their reputation as university professors in the United States and as business strategists. AJ Strickland sees Dofa analysis as building a strategic balance sheet.
This should be based on creating strategies with stronger competitive assets than competitive liabilities.
For his part, Arthur A. Thompson, clarifies that the most important aspects of SWOT analysis are strengths and weaknesses . It recommends taking into account strengthening elements such as:
The capabilities of the key areas of the company (Customize it to the issue you want to evaluate)
And contrast them with the aspects that weaken the strength of the company:
Deficiency in monitoring strategies.
Delay in monitoring and development (company, product, service, brand, etc.)
Weak distribution network.
It is clear that these points are referential and in each case should be evaluated cu to are their true weaknesses and strengths.
Situations in which a SWOT analysis is useful
As we mentioned a few lines ago, SWOT analysis is not only useful to know the environment of a company, there are situations in which this method will be of great help to define the destination of the object to be studied. We recommend implementing it, in situations like these:
Scenario to make a new acquisition.
Know the market . In this case, to know if a product or service will have a growth opportunity.
New business idea.
Analyze new methods or instruments to distribute products.
Questions to ask yourself to put the SWOT study into practice
Learning to know yourself is a basic principle of life itself and in the field of business it is more valid than we can believe. Doing a Swot analysis will help you to get to know yourself as a company and in turn to understand the environment in which your online business lives.
But in order to find the answers that will make you create a successful marketing plan , you have to learn to ask yourself the right questions. With regard to strengths, ask yourself the following questions:
Is it price, value or quality that sets me apart from the competition? If none of this can make you stand out, the next question would be:
Wh to l is my competitive advantage?
What innovative elements will make me stand out in the market?
Does my market prefer value and quality over price? or on the contrary
Is the price of my product and / or service what you prefer?
In reality, there are many questions that can arise when you start studying the competition . These may be the most common.
Get together with your team of marketers and brainstorm ideas. They are great for finding solutions and answers.
Now, we will try to generalize the questions that will arise when analyzing your weaknesses:
Wh to to them the disadvantages of my proposal ?
Disadvantages when covering my capacity in the market?
Does my proposal lack competitiveness?
Is my reputation good enough that the client will accept me?
Will I be able to meet the stipulations of price, date, value or quality of the product in the long term?
If you are an entrepreneur looking to position a brand by fist force, it is likely that at the end of the SWOT analysis, you feel that you have more weaknesses than anything else.
Do not be overwhelmed, when weaknesses are solved, you can turn the environment into a world of opportunities, even if new questions arise, such as:
Wh to are they the failures of competition ?
Where are the market trends heading?
Will I be able to launch new products or services in the face of market trends in the near future?
Is there an opportunity to expand my capabilities in the market?
Ż C or how I can manage my favor influences the market?
In general, opportunities arise as the business goes, it ‘s a matter of having the ability to catch them as time goes by.
Threats are the point of instability of any business, you have to be prepared to face them and be able to keep the business stable, despite the difficulties. Let’s do a review:
Wh to l is the situation pol í tica, economic and social environment where I intend to develop my business idea? Are these optimal for me?
Wh to l is the positioning of competition in the market ?
Wha é puts them at an advantage over me?
Wh to are the weaknesses they could not overcome?
What is the market demand? Can I meet the needs? Will my finances allow me to cover the needs of the niche?
There are external factors that we must look and study carefully, such as: The seasons of the year, fashions or trends, among other things.
SWOT analysis example
Let’s imagine that you are the owner of a shoe business that is located in the center of the city with several branches in places with a lot of influx of potential customers and consumers in general.
You are a 60-year-old man married to a 55-year-old woman, together with their two children they make up the Esposito family.
Your grandparents and parents have been part of a generation dedicated to the footwear trade and they know everything about the product. In total she has more than 100 years in the shoe business.
Now your family is dedicated to the business, your wife and eldest son work full hours, while your youngest son partially, since half of his time is dedicated to studying for his university degree.
The business has registered few sales because fashion is focused on a more “modern” and cheaper type of footwear. Your shoes are styled after a line of classic Italian footwear. A luxury, but expensive
Your oldest son is 30 years old, he has a wife and a baby who has just arrived in this world, he depends on the profits of companies to support his family.
With the economic situation so heavy, he thinks it would be a good idea to start his own shoe business, but this time by becoming a supplier, he wants to make shoes.
But doing that requires hiring more knowledgeable staff and managers to grow the shoe factory.
However, not everything is bad, the Esposito family has a great store that, when investing money, can be the perfect location to start the shoe factory.
While your youngest son is about to get his college degree in entrepreneurship, but would not want to go into the family business.
Now, in front of this fictitious scenario, we are going to carry out a SWOT analysis taking into account the whole family situation.
The Esposito family has been in the market for more than 100 years. They know how to support themselves in times of crisis.
They don’t spend much on employees, as the family helps in the business.
His shoe style is elegant and classic. According to the style of the shoe, they already have a niche (You may not know it)
They have a relative (youngest son) who knows about entrepreneurship.
There is no invention. They have stayed with the classic line in their footwear.
The business must support two families. Less capital to invest.
The youngest son does not want to continue working in the shoe business.
They will need to hire more staff for the new project.
They are strategically located in areas. The sales opportunity can increase by leaps and bounds.
Your oldest son has great business ideas that will grow your business income. They will be able to cover more space in the market.
They have the potential to become a large industry in the field.
They own a store that has the potential to become a shoe factory.
The competition is gaining ground, while they lose customers.
Her youngest son, who knows about entrepreneurship, does not want to continue collaborating in the family business. There are risks of losing a great help, a true talent.
The market presents better and cheaper options.
The trends of the market and consumer tastes have changed.
With this example, we hope we can make it clear how to do a SWOT analysis to study the environment of your company, brand or product.
Tips for doing an analysis of your environment
You have to try to be as honest as possible about the weaknesses of your brand or company. It is useless that you are clear about the opportunities, if within your defects you will find obstacles to advance.
To do a #SWOT Analysis you have to be honest about the weaknesses
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Do not extend yourself more than you should, do not try to find solutions to everything, prioritize the inconveniences of your company.
And finally, don’t just stay with Swot analysis, there are more methods that can help you refine details, such as PEST analysis .
Although many often confuse it, it must be clarified that it is not the same. The main differences are that the PEST is based on analyzing external factors , those that are capable of affecting the business, but without the minimum performance of it.
That is why we recommend using it, as it will assist you in knowing all the details outside of your actions to know the growth opportunities of your business.
In general, it is done before doing the SWOT analysis and based on the data that it gives you, you will be able to evaluate if it is necessary to deepen with the PEST.
Remember, start it up, being aware of your mistakes and threats.