There are many things that come and go in business – some are fashionable and shortlived.
Others prove their value and worth and are perpetuated.
It’s clear that the fundamental SWOT Analysis holds its value – many firms understand the mechanics – although they falter when applying the output to their business to generate results.
For the uninitiated – SWOT translates to defining your business’s Strengths, Weaknesses, Opportunities and Threats.
There are many well-established SWOT models that one can Google to master the basics and mechanics.
Select the model that best reflects your preferred style, business orientation, organizational size, complexity, product/service mix, target market (segment), target audience make-up, competitive influences, etc.
What works for AT& T and IBM may not be the right fit for your firm.
This is something that should not be done solo – draw-in some of your best people that have a perspective on the business – representing different functional areas of responsibility – and hopefully views that will differ from your own.
Mix it up.
SWOT Analysis is not a self-serving process – it must be done objectively with a brutal sense of reality or the results will be flawed and misleading.
Most models operate on the basis of corresponding data points.
Once the basics are defined – different combinations prevail.
For example: -Strengths matched with opportunities
-Weaknesses matched with Threats
-Strengths matched with Threats
-Weaknesses matched with Opportunities
and so on – explore all combinations and possibilities – any element or combination of elements may provide the insight needed to make a tangible difference, which will allow you to exploit opportunity or minimize the impact of potentially negative forces.
An organization needs to be effective at Offense and Defense – no matter what its size, age or stage in the business cycle.
Coping with and managing “change” becomes the primary skill and driver.
Most firms get the Offensive part, although they overlook or de-emphasize the Defensive aspect – usually rationalizing that it is not essential or they will be concerned with it at some future period.
It’s important to have the right balance and do it early in the cycle – not later.
View this, as building essential competence and skill.
An underlying message, when utilizing SWOT Analysis is to focus on your opportunities, challenges and problem-set – the big three – and prioritize the output that flows from your brainstorming sessions into (initially) easy-to-define and easy-to-implement tasks that get “your feet wet.”
Allow your team to taste some success and see results, before you take on Giant Leaps.
Break your SWOT Analysis output into bite-sized, chunks instead of attempting to consume the whole elephant in one chomp.
Of course – if your firm is an experienced SWOT user and incorporated this into your core business – Go for the Gold.
Let’s take a look at some examples of key areas that are candidates for SWOT.
We’ll define these, as basic labels:
-Sales Performance and Productivity
-Product Launch and Roll-Outs
-Distribution Channel Development
-Target Account Development/Penetration
-Industry and Media Development
-New Market (Segment) Development/Effectiveness
-Partner/Strategic Alliance Development/Stimulation
-Mergers, Acquisitions & Leveraging
These areas are only representative examples, however let’s see how they work in practice.
1) Competitive Influences/Drivers – as a result of paying attention to market movement, we have determined that a key competitor is repositioning itself in a new, Market segment – which results in leaving a portion of its installed, customer base “high and dry.” No migration or growth path for its existing, family of products.
Clearly – once this is confirmed and the dynamics are understood – this would be characterized, as a Strength-Opportunity on our SWOT grid.
Tactically, we could structure a hard-hitting, campaign that exploits the competitor’s weakness and vulnerability. In other words – take advantage of the competitor’s situation and exploit them to your company’s gain. Bail their existing, customer base out and provide the growth path and continued support needed – be the “knight in shining armor” from the customers’ perspective. This would translate into a Market Programs profile that defines the make-up of the program (various marketing vehicles), conversion tools, financial incentives and collateral to “wage war” against the incumbent.
In practice – one of our clients introduced a program deemed “Mission: Possible,” which was implemented worldwide and generated $4.6 million of competitive replacement revenue, during the campaign period.
2) Distribution Channel Development – a small, technology-based company with limited resources and constrained budget determined that it had to establish a Channel Partner Network. This was one of the key outputs of their SWOT Analysis. The Founders of the company not only designed/developed the product set, they were also the primary promoters for the company in the open-market. They were severely strapped and limited to a small number of customer projects (and, they were not that effective at interfacing with the outside world). This situation also impacted their continuous, product development efforts resulting in product lateness. They desired to extend the business to new areas, plus, their Board of Directors was driving them to show an increased opportunity base. The company classified this, as an Opportunity-Threat. The rationale was that building an effective Channel Network capability was an opportunity to expand/extend the business, although with no experience to do this – it was viewed, as a potential, long-term threat to the company. Further, the company’s primary competitors had already built and established a 3rd Party Program that was showing favorable results. The company’s Board of Directors felt that they were, behind the curve. Add to this the conflict the Founders had attempting to balance product development projects with opportunity development – and, it was clear that this was now a problematic situation that was negatively impacting the company.
A clear threat.
The company enrolled an experienced consulting firm to handle the recruiting and selection process. The consulting firm was familiar and well-connected with their target market and well-established with high-powered, Channel Partners that had a rich, contact network and experience with their class of platform product.
After going through the recruiting and matching process, the company settled on four (4) valued, Channel Partners to extend their capabilities to selected, target accounts.
Within six months, the 3rd Party Network was ramped-up, effective and created an opportunity base that was 4x-5x larger than the company’s baseline forecast.
3) Product Launch/Roll-Outs – a fast-paced, innovative technology company had conceived a breakthrough software graphics product – one that was determined to set new standards in its target market. The company was rolling the dice on this product launch and the key Investors were hot to see a quick-ramp and adoption of this product family. The pressure was on and the company was stumped on the best approach to support this make it or break it product launch/roll-out. From a SWOT perspective, this was classified as Weakness-Opportunity. The rationale was that the company was going into unchartered waters with this product introduction, although the opportunity potential could change the Strategic Direction and fortunes of the company. It was clear that one of the company’s key strengths was the relationship that it had developed with Platform Suppliers (which was the company’s primary distribution channel) to bring products to market. The Platform Suppliers possessed solid image, reputation and large, worldwide sales resources.
It was determined to leverage the Platform Suppliers, as the primary launch vehicle to introduce the new, product family.
To facilitate this, the company created an integrated, Marketing Program hosting a unique, “Try and Buy” kit that was introduced to the Platform Suppliers’ Marketing and Field Sales/Support Teams. This included pre-qualified, leads to support the overall campaign which was seen, as added-value.
This program not only generated $1.2 million of new sales out-of-the-gate, it also strengthened the relationship with the Platform Suppliers resulting in the software company being positioned, as the preferred partner.
SWOT is not rocket science, however these examples demonstrate how SWOT output can be applied to various segments of the business.
This is the primary power of SWOT – the translation and application to the business to generate results.
Otherwise – SWOT is just another interesting model and academic exercise.
Have you applied SWOT to your business?
Can you afford not to?
Performance Marketing Group