If you’re like me, then the first time you heard the term “SWOT analysis,” you thought it had something to do with a SWAT team.
In reality, SWOT analysis has nothing to do with law enforcement — but like a SWAT team brought in to solve an urgent, high-risk problem, a SWOT analysis is a powerful and effective tool for mapping out the future of your business while avoiding potential disaster.
A SWOT analysis is a strategic framework used to analyze the performance and market positioning of specific business functions. Using SWOT, an acronym for strengths, weaknesses, opportunities and threats, you can gain a deeper understanding of what you’re doing well, what you need to improve, what kind of opportunities are out there and what kind of threats exist in the market that could have a negative impact on your business.
Often, when companies perform SWOT analysis, they have trouble differentiating between strengths and opportunities, as well as weaknesses and threats. Here’s how we tell them apart:
Strengths and weaknesses are internally focused, so they’re things you have direct control over. Marketing campaigns, SEO strategy, branding and social presence are all examples of potential strengths or weaknesses; all decisions and activities related to these things occur inside your company.
On the other hand, opportunities and threats are externally focused things outside of your control. Usually, these things involve major market events or competitor activities. For example, if HubSpot launches a new product, that’s an opportunity for New Breed, because we’re a HubSpot partner. If we can learn to leverage that product effectively, it can become a strength, but because we’re not involved with product development at HubSpot, a new HubSpot product release is not an inherent strength of ours.
Now that we’ve got that straightened out, let’s dive into the process for conducting a SWOT analysis effectively.
1. Identify the specific function or company characteristic you want to analyze.
Contrary to popular belief, you can perform a SWOT analysis on just about anything. Some people take a company-wide focus to analyze business performance as a whole, but you can conduct a SWOT analysis for any part of the business, from marketing performance to product development.
Before you begin, select an area of your business to analyze. You can be as specific as you’d like; for example, you could analyze high-level marketing tactics or you could narrow in on your social media marketing strategy.
2. Gather all key stakeholders involved in the business areas you’re analyzing.
Depending on what part of the business you’re focusing on, different people will need to be involved for an effective and accurate analysis.
If you’re conducting a SWOT analysis on the company as a whole, all members of the executive team should have the chance to offer their two cents. But if you’re performing the analysis just on your paid advertising strategy, you’ll likely only need the person working directly on paid advertising and the head of the marketing team.
By getting all of the right people together, you ensure that nothing is overlooked in your analysis.
3. Map out your goals and timeline for the analysis.
Without goals, a SWOT analysis is rendered useless. Before beginning the analysis, think about what you really want to get out of it and how you’ll use the insight you gained during the process.
It’s important to note that there’s a difference between the goal of the exercise and the goal of what you’re analyzing. If you’re analyzing your marketing funnel, your SWOT analysis goal might be to identify gaps in your funnel and get a better understanding of how to fill those gaps — not your specific marketing goals, like number of MQLs per quarter.
However, the specific goals of what you’re analyzing will be important for actually identifying the strengths and weaknesses of that function, so you’ll need to have a good grasp on those as well.
4. Analyze your strengths, weaknesses, opportunities and threats in relation to those goals.
Once you’ve set your goals, gathered the right people and done all of the necessary research, it’s time to identify your strengths, weaknesses, opportunities and threats.
A good way to think about this is that strengths and opportunities are anything helping you move toward achieving your goal, whereas weaknesses and threats are anything with the potential to push you further from your goal. For example, if you’re doing a funnel gap analysis and you’re not achieving your MQL goals for the quarter, that’s a weakness.
5. Take action!
Remember, if you conduct a SWOT analysis and nothing comes of it, it’s a waste of time. For example, performing a funnel gap analysis is only a fruitful activity if you later dedicate time and energy to filling the gaps you identified.
Once you’ve completed your analysis and you have a solid understanding of what is and isn’t working for your business, make a plan for amplifying your strengths, mitigating your weaknesses, capitalizing on opportunities and neutralizing threats.
A SWOT analysis is a highly effective tool for getting your bearings and figuring out where to go next. For marketers, it can give you the competitive insight you need to create winning campaigns that drive results.