Prince Dawn B.

Macasieb

V. SWOT Analysis :
Framework for Developing Marketing Strategy

1. SWOT analysis is only one stage of business planning

Business planning requires several pieces of data, research, and analysis. SWOT analysis is only
one of the many components. Depending on your topic, it may be a major contributor to your
planning. But relying wholeheartedly on it isn’t advised.

You’re likely to need more than a SWOT analysis for adequate business planning. You’re out to
make the most appropriate and intelligent decisions for your business. You want it to grow, be
profitable. To achieve that, you’ll want as much information as possible. Unfortunately, SWOT
analysis only concentrates on four primary functions. So, you’re only getting a small percentage
of research.

2. A lack of hierarchy leads to problems

You know how SWOT works. It’s a study of four categories: Strengths, Weaknesses,
Opportunities, and Threats. These four categories are the only points included in the analysis. If
it doesn’t fit into one of these four, it’s shoved to the side.

The problem lies in the lack of hierarchy. Which section needs your attention first? Which one
needs it the least? Only you can decide because SWOT analysis doesn’t say. Be warned: if
deciding wrongly could jeopardize your success in the future.

3. Too much structure leads to poor decision-making

In SWOT analysis, you’re expected to categorize attributes in only one of the four categories.
You can’t overlap. Meaning, once something is defined as a weakness, it can’t ever be placed in
the other three categories. A strength is a strength, never a weakness. An opportunity can never
be a threat. You get the idea.

Such a black and white approach will lead to problems. Guaranteed. Because the real world
doesn’t follow strict rules or guidance. A person can be charismatic but also a con artist. A
business can have neverending customers, yet still sit in a financial hole. Nothing is ever just one
thing. You should think of SWOT analysis similarly.
4. SWOT analysis becomes impossibly subjective without the
right information
All strategic business decisions should be based on reliable and relevant information. In most
cases, this means using facts and data from reputable sources. SWOT analysis typically goes
against this format. Unlike other formal analyses, SWOT doesn’t require scholarly information
to be successful. In 10 minutes, you can start and finish your analysis. Or you could dedicate
hours to it.

Whatever works for you. Regardless of time, people recommend brainstorming throughout the
SWOT analysis process. Unfortunately, doing this makes it more prone to bias. Without formal
data, the only thing a person can use is their own opinion. Whether that’s true or not affects the
integrity of the analysis. Not only that, but the information can also become outdated within a
matter of hours

5. Information overload affects your results

As I said above, most people sit down and brainstorm during their SWOT analysis. No idea is
too small or dumb to be added. You can add it as a bullet-list or expand each point until your
fingers cramp. Although this can be a selling point for the analysis, it’s also a hindrance. Before
long, you’ll have a ton of information on your hands. And not all of it may be usable.

As you now know, SWOT analysis doesn’t tell you where to focus your efforts. It also doesn’t
have a threshold for information. You’ll never know if you have too much or too little. Although
that can be a problem, the real issue lies elsewhere. Specifically, you may have too much
information for a section that doesn’t matter as much as another.
SWOT analysis is a tool for auditing an organization and its environment. It is the first stage of
planning and helps marketers to focus on key issues. SWOT stands for strengths, weaknesses,
opportunities, and threats. Strengths and weaknesses are internal factors. Opportunities and
threats are external factors. A strength is a positive internal factor. A weakness is a negative
internal factor. An opportunity is a positive external factor. A threat is a negative external factor.

Dia
gram: A SWOT Analysis

We should aim to turn our weaknesses into strengths, and our threats into opportunities. Then
finally, SWOT will give managers options to match internal strengths with external
opportunities. The outcome should be an increase in ‘value’ for customers – which hopefully
will improve our competitive advantage.

The main purpose of the analysis has to be to add value to our products and services so that we
can recruit new customers, retain loyal customers, and extend products and services to customer
segments over the long-term. If undertaken successfully, we can then increase our Return On
Investment (ROI).

Simple rules.
 Be realistic about the strengths and weaknesses of your organization.
 It should distinguish between where your organization is today, and where it could be in
the future.
 It should always be specific. Avoid grey areas.
 Always apply the tool in relation to your competition i.e. better than or worse than your
competition.
  Keep your audit short and simple. Avoid complexity and over analysis

A strength could be:

 Your specialist marketing expertise.

 A new, innovative product or service.
 Location of your business.
 Quality processes and procedures.
 Any other aspect of your business that adds value to your product or service.

A weakness could be:

 Lack of marketing expertise.

 Undifferentiated products or services (i.e. in relation to your competitors).
 Location of your business.
 Poor quality goods or services.
 Damaged reputation.

Opportunities and threats are external factors.

For example:

An opportunity could be:

 A developing market such as the Internet.

 Mergers, joint ventures or strategic alliances.
 Moving into new market segments that offer improved profits.
 A new international market.
 A market vacated by an ineffective competitor.

A threat could be:

 A new competitor in your home market.

 Price wars with competitors.
 A competitor has a new, innovative product or service.
 Competitors have superior access to channels of distribution.
 Taxation is introduced on your product or service.
Directives for a productive SWOT Analysis

1.Stay Focused
-It is a mistake to complete one generic SWOT analysis for the
entire organization or business unit.
- When we say SWOT analysis, we mean SWOT
analyses
.
2. Search Extensively for Competitors

-Information on competitors is an important aspect of a

SWOT analysis.
–Look for all four types of competition:
*Brand competitors
*Product competitors
*Generic competitors
*Total budget competitors