For marketers, it is definitely impossible to ignore SWOT – a tool to help you set up a strategy for your business. Building a detailed SWOT model will be a premise to help businesses know their strengths, weaknesses, challenges and thereby find opportunities for sustainable development.
1. What is SWOT?
SWOT is an acronym from the first letter of the following four words: Strengths – Weaknesses – Opportunities – Threats (corresponding to the meanings of strengths – weaknesses – opportunities – threats, respectively). With this in mind, the information analyzed from the SWOT model has been applied in almost all business strategies of every business.
The concept of SWOT
About its historical origin, SWOT was born in the 1960s – 1970s by the invention of Albert Humphrey through a research project. Drawing from the data of 500 businesses with the top revenue in the US at that time, he understood the reason because the business strategies of these businesses were still incomplete.
Previously, the SWOT model was originally called SOFT, representing Satisfactory – Opportunities – Fault – Threat. And then until 1964, it was Albert and his associates who changed “Fault” to “Weaknesses” so that SWOT was officially born. Since then, there have been no other changes to this model.
2. SWOT analysis
To start a business strategy, you need to analyze in detail the 4 elements in the model below:
2.1 Strengths – Strengths
One of the indispensable elements in that model is the strength. And certainly each business has its own strengths.
The strengths are listed as:
- What jobs does the business do well?
- What qualities make your business stand out from the competition?
- Internal resources: professional skills, professional knowledge and mindset of employees.
- Tangible assets: are machines and equipment advanced or not?
- Intangible assets: proprietary technology, patents, inventions, etc.
In addition, ask questions around this strong point such as:
- What do customers love about your business or product?
- What does your business do better than other businesses in the same industry?
- What is the most attractive brand attribute of your business?
- Those unique sales ideas that your business is cherishing?
- Resources that your competitors don’t have?
If you can answer all of the above, you will identify the core strengths of the business. But you should also note that there must be a multi-dimensional view from the position of insiders, customers to competitors in the same industry. Because if you say your quality is a strong point, the quality of your competitors’ products also makes you wary. Therefore, when you encounter difficulties, you just go out because maybe it will become a strong point for you to exploit.
2.2 Weaknesses – Weaknesses
And when there are strengths, surely every business has certain limitations. Just how to overcome weaknesses is how each business does.
Some of the weak points that your business needs to mention can be mentioned as:
- What are the limited aspects or expertise of the business?
- What things do your competitors do better than you?
- Resources are still limited at what stage?
- Are the terms of the contract clear?
Or you can also list the existence according to the most objective assessment such as:
- What do your customers dislike about your business or product?
- What are the reviews or customer reviews that your business often receives?
- Is the product price more expensive than competitors?
- Are the sales channels your business implements effective?
- Has the support service met the needs of the customer?
- Give a reason why customers have to choose your product over your competitors?
- Have the advertising campaigns reached potential customers or not?
As for the weakness, you must also have an objective and subjective view. Moreover, you also have to face weaknesses to quickly give the right and timely solutions.
The next element in the SWOT model is opportunity. In this section, list opportunities such as “Is your marketing team generating a flood of leads?” or “Is your business idea keeping up with trends?”. Besides, to be able to find business opportunities for businesses, you should take advantage of factors such as: trends in technology and markets, changes in government policies, changes in society. society, population, lifestyle, customer trends, etc.
- In addition, to know what opportunities the business has, you need to have answers to questions such as:
- How to improve sales process, support existing customers as well as potential customers?
- What types of communication drive the customer’s buying process?
- How to optimize effective workflow?
- What potential tools or resources have businesses not exploited yet?
- Potential advertising channels or image promotion campaigns that the business has not yet implemented?
In short, in order to find opportunities, you need to review your strengths as well as your weaknesses. Because from your strengths you will have an idea of exploiting more opportunities as well as from weaknesses, how should you overcome and turn it into an opportunity?
2.4 Threats – Challenges
Of course in business, we cannot avoid risks and this is one of the factors that occupy a place in the SWOT model. Challenges that businesses face can be mentioned as: emerging competitors, changing legal policies or consumer trends that make businesses need to quickly make changes to suit their needs. fit the times. All in all, we can leverage our strengths and opportunities to make our weaknesses and challenges less of a burden.
3. The significance of the SWOT model in business strategy planning
Meaning of the SWOT model
Business strategy is a key point that determines the development process of the whole enterprise. Therefore, every step in this process should always be done in a methodical manner. And certainly indispensable to perform the analysis from the SWOT model.
The current data that are aggregated and detailed statistics contained in the SWOT matrix are extremely important data from which businesses can determine what they need to do next and what their new goals will look like. Especially, for businesses that are on the way to developing and creating a brand in the market, this will be a basis for conquering new goals. The connection of information from the criteria included in the analysis table is also a way for businesses to connect their values together.