In business, it’s important to understand what you’re capable of achieving, as well as the challenges you’ll face. That's where a SWOT analysis comes in. In this post, we'll cover what a SWOT analysis is and how it can help your online business.
In your online business, it’s important to understand what you’re capable of achieving, as well as the challenges you’ll face. That’s where a SWOT analysis comes in. In this post, we’ll cover what a SWOT analysis is and how it can help your online business. Let’s get started.
SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats. It’s a type of situation analysis, which is an important part of creating a marketing plan.
If you’re talking with a professional marketer, they will tell you that before you put together any kind of marketing plan or create a new product or communication plan, the first thing you need to do is a situation analysis.
There are different ways people do a situation analysis, but ultimately, it’s about looking internally and externally to figure out what the situation in your world is and how that affects your marketing.
What is it that your company is particularly good at doing? This can sometimes be directly related to what you do, such as the particular service you provide or the particular product you sell, or it might be something separate from it.
Where is it that you truly shine? When you’re doing this, you need to think about yourself but also about how your business compares to other businesses.
Think about how ways that you’re better positioned than your competitors. You can also think of these as areas where you have an unfair advantage as compared to other businesses.
Now with our types of companies (personal brands and knowledge brands), the strengths often tie into understanding what your core competencies and strengths are as an individual.
For example, if you’re an influencer by nature and can communicate and influence people, that’s one of your strengths. On the other hand, if you’re a great strategic thinker, you’re really strong with strategy. For other people, it’s about deeper relationships with people.
Your strengths can also be where you have expertise that other people don’t or where you have credentials. Now, I’m not saying you have to have a credential merely for having a credential, but if you have a credential that will make people sit up and notice you over your competitor, that’s one of your strengths.
The other side of the coin is your weaknesses.
Where is it that you’re lagging behind your competitors? Some of this could be that maybe you don’t have things in place that they do have. For example, if someone were trying to catch up with me on the legal stuff, one of their weaknesses might be that they don’t have the tech backbone that we have in our legal generators.
When I say weaknesses here, I want you to understand that these aren’t necessarily weaknesses by any kind of objective standard. There are likely things that you have intentionally decided not to focus on.
For example, if you’re an introvert, you can consider it as a weakness in some sense because you’ll recognize that doing the stuff of being around other people and spending time with them is going to drain you. That probably means you won’t want to create a product, a marketing plan, a communications plan that is built around being a social butterfly.
Identifying weaknesses is simply taking stock of those places where you’re not going to do things and what your limitations are.
Opportunities and threats are the positives and the negatives in the external macro world. This isn’t necessarily about comparing you to other competitors. Instead, it’s looking at opportunities and threats in the broader market.
For example, one opportunity could be finding a gap in the market, something that no one in the market is doing. That’s an opportunity.
Now to be clear, that doesn’t necessarily mean that you should pursue that. First, you have to figure out whether that opportunity fits with your strengths.
If you identify that no one in the online marketing space is focusing on fundamental traditional marketing concepts and teaching online marketers how to do that, you might consider whether you could fill that gap.
Finding these opportunities could be about identifying emerging trends and considering whether you should jump on the trend.
You could also look at things like what markets might open. These are external opportunities.
What are potential threats in the space? Again, this is looking at a macro level. You should consider things like regulatory issues that might come up.
You might see a big player over here that has entered a parallel market. They haven’t entered your market yet, but they might, and all of a sudden, you might have to compete with Google, for example.
For me, looking at the online marketing space and people with these courses, I think the trend is that’s going to go away. And part of the reason is the threat from companies like Masterclass, which is like $100 for the year.
If they entered the online marketing space and started offering courses there and you’re building a business based on selling courses for $1,000, you’re going to be up the proverbial creek without a paddle.
Putting Your Marketing Plan Together
Once you’ve done this situation analysis, once you’ve identified your company’s strengths and weaknesses and the opportunities and threats in the market, that’s when you start to put together a marketing plan.
When you see an opportunity, you can assess it. Identify whether that opportunity fits your strengths and look at your weaknesses and potential threats in the market.
This analysis will help you form your plan for your business.
You see why doing this analysis is incredibly important because it lets you be strategic. If a strategy is not one of your strengths, SWOT gives you a framework and a matrix for thinking strategically about business and marketing.
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