I said "SWOT"

In the previous two articles we talked about identifying your target market and business competition, planning product distribution, and pricing strategies.  The most important thing to take away from both of these articles is the importance of gathering data about your target market, customers, and sales.  You don’t have to be a statistician or marketing analyst to do this, just track your sales and get to know your customers.

The next step for your marketing plan is to do a SWOT analysis, an overall look at your company’s strengths, weaknesses, opportunities, and threats.  Identifying strengths and weaknesses requires you to look within your company, and opportunities and threats can be found outside your company.   Big companies hire consultants to do this for them, but there’s no reason why you can’t take an objective look at your business.

Marketing opportunities are simply customer needs your business can fill profitably, and they can be ranked according to their attractiveness and their probability of success.  Your probability of success depends on whether or not your business has the necessary strengths and can outperform your competitors.  In the case of our skateboard accessory business owner (let’s call him Bob) maybe he’s discovered through talking to customers there’s demand for a new kind of helmet but no one is selling them locally yet.  This would be a great marketing opportunity for Bob, but what about the threat of a company selling them online?  As part of his SWOT analysis he may conclude he should sell them in his store and offer custom fitting and adjustments of the helmets for his customers.

Threats are challenges to your business from an unfavorable trend or other development that without action on your part would lead to a decline in sales or profits.  They can be classified by their seriousness and probability of occurrence, and once you’ve identified all your opportunities and threats you’ll have a clearer picture of how attractive your business idea really is.  An ideal business has many marketing opportunities and few major threats, a speculative business has a lot of marketing opportunities as well as a lot of threats, a mature business has few major marketing opportunities and few threats, and a troubled business has few opportunities and many threats.

Strengths and weaknesses are probably best identified by an objective outsider, but there’s no reason why you can’t take a hard look at your operations and do this yourself.  One way to accomplish this strengths and weaknesses analysis is to create a checklist with columns labeled “Major Strength”, “Minor Strength”, “Neutral”, “Minor Weakness”, and “Major Weakness” and rows with the categories of Marketing, Finance, Manufacturing/Service/Sales (whatever is appropriate), and Organization.  Each of these categories can be broken down into subcategories like Company Reputation, Market Share, Customer Satisfaction, Customer Retention, etc., for Marketing and Cost or Availability of Capital, Cash Flow, and Financial Stability for the Finance Category.  Once you’ve made your checklist have key people in your business each fill out the checklist and be brutally honest with their answers.

You can download a free 30-day trial of SmartDraw software which has SWOT templates built in, or you can download free SWOT templates from Businessballs.com or Mindtools.com.   If you have a small staff it would be a good idea to bring everyone together and have a brainstorming session to fill out the SWOT analysis templates.  First go around the room and have everyone take turns identifying strengths, weaknesses, opportunities, and threats.  When everyone has run out of ideas try the “Loop and Group” and “Fill and Kill” techniques to make sense of your list of ideas.  Fill and Kill involves putting everything on the board you can think of (fill) then go down the list and line through anything that won’t work (kill).  Draw circles around ideas similar enough to consolidate and connect them with a line to “loop and group”.  Now you should have a workable list for your SWOT analysis.

In the next article we’ll talk about objectives and marketing strategies. 

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You might also like to read:

1. Develop your own marketing plan – part 4
2. Develop your own marketing plan – part 5
3. Develop your own marketing plan
4. Develop your own marketing plan – part 2
5. How to Sell Jaguars in South Africa