SWOT - Strengths (Strengths, Weaknesses, Opportunities, and Threats). In order to make a good marketing strategy for your company, after segmenting the market and defining the niches, it is time to analyze the strengths and weaknesses of the company, the advantages you have and the possible threats on the way to the realization of your business.
Strengths. Here you will examine and describe what advantages your company has over others and what you do better than them. Are you a better artist than the competitor, with a higher qualification or, unlike him, besides portraits, you also paint landscapes. Again, this is where you will indicate whether your firm has access to unique or low-cost resources that other firms do not have. If you are a beautician and use completely organic products or a product that is difficult to find in the general market, this would be a serious advantage.
Part of the strengths are also the presence of factors through which you will make your sales. If you sell online and use discounts with the couriers you will work with, this is a strong point. As well as if you start franchising a well-known brand. It is also a strong point if you already have a good reputation among your potential clients and in general in society, clean as a person and in character. In general, anything that can put you ahead of the competition is a strong point.
Easy steps company registrations - EOOD and OOD
Weaknesses. They are those things that should be avoided. This is also the place to indicate what else can be improved in the future. It will be helpful if other companies in your industry point out what your weaknesses are, so you will have an outside perspective. What would be the possible reasons for the company not having good sales? This can include the lack of a brand or patent, if you have a bad reputation as a person or a bad credit rating (for example, you decide to take out a loan from the bank, but your financial history is not good, you are not a reliable payer for various reasons - this could delay the loan or not get it at all). In the group of weaknesses will fall the resources that you will use if they are expensive or difficult to access. Let's say they open a publishing house, it is good to know that in the last months of 2022 the price of paper increased dramatically. Difficult access to distribution is also considered a very weak point. If you produce vegetables in a village, but you don't have a car or you're not a driver, it becomes difficult and expensive to market your produce.
Sometimes the same element can turn out to be both a strength and a weakness in a different period. If let's say you have a small bakery, you have stocked up on raw materials (flour, eggs, etc.) and harnessed all your production capacity to bake snacks and sell. You have the ability and resources to sell 5,000 items per day. However, for some reason, the turnover is sharply decreasing. Then this opportunity for 5000 pcs. daily becomes a weak point because you can't really use your full potential, and that brings losses. Here I will give an example of a small restaurant in a small town. According to the analysis, the highest turnover occurs on weekdays and in good weather. On a weekday, many people choose the place to eat during their lunch break (employees from nearby shops, you serve a municipal administration that is nearby, mothers with children in good weather prefer the place because there is a wide square for children to play safe). At the weekend and on holidays or in bad weather, the turnover drops sharply. Therefore, the owner offers one main menu at a time, which is always up-to-date, and every weekday a different lunch menu, alongside the main menu.
12 STEPS FOR THE STARTUP ENTREPRENEUR - part 1
The possibilities. They are related to the company's strengths. I.e. here it is analyzed whether individual strengths can lead to new opportunities. Or, by eliminating weaknesses, it opens up new opportunities. Let's say you are an accountant by training. Economic knowledge generally gives a very broad general culture. But in this case, this strong point of yours will enable you to save on bookkeeping costs if you can do the bookkeeping yourself.
If you are a vegetable producer, a weak point may be the lack of a greenhouse. Then you will produce only seasonal vegetables and depend a lot on the climate. However, if you invest money in this facility, you eliminate this weakness, giving you the opportunity to produce more or to produce tomatoes outside of their prime season.
Another type of opportunity is changes in state regulators and regulatory requirements. If, say, the law provides new requirements for the production of a given commodity, which you already have, and the competition does not yet, this gives you a serious advantage, at least for a certain period.
Threats. Here you will focus on analyzing the competition and the possible difficulties from the external environment that the company may face. For example, you decided to open a hair salon because this is your element. This service even in troubled times is sought after; after all, we live in the 21st century, no one wants to walk around with disheveled hair, even during a pandemic. However, if you are in a small town or neighborhood of a large metropolis, where such services have certainly been offered for a long time, competition will be the main threat. And here is the time to be different: in the type of services offered, the quality of services, etc. You can say offer your services at different working hours than others (later hours, on weekends or on call). Or you can sell the products you use anyway (shampoos, hair masks, etc.). In this way, you literally turn a threat into an opportunity.
Another type of threat is company weaknesses that could eliminate the company from positions and in the market. If you have a translation agency but do not work with certified translators, this can be a serious problem. Or new technologies enter your business and industry that you cannot afford. Or the competition offered substitute products at lower prices but with the same quality. Another potential threat is government regulators. When the state introduces new requirements for farmers or meat processors, if you have a small dairy, you may not be able to meet all the new regulations and lose your license.
Changing consumer behavior can also be a threat. Let's say you have a small shop where you mainly sell fast moving goods such as waffles, energy and soft drinks, snacks, etc. similar. These are goods that are widely used among children and young people. However, if there is a large-scale campaign in the area for healthier eating, your turnover will drop.
As a summary of the SWOT analysis, we can note that the first two elements - strengths and weaknesses are actually the internal factors that influence the company, and the opportunities and threats are the external ones. It is important to know that you can influence the internal factors, but not the external ones, and to clearly distinguish the elements of the SWOT matrix. Basically, internal factors are analyzed by collecting data from the company's customers and employees through surveys, financial-economic analysis, etc. While the external factors are identified by analyzing the economic environment, information is sought on innovations in the industry, new trends, new rules or phasing out of old ones, etc.
© 2023 Iliana Dechkova