If you asked any group of marketers to name the marketing tools that they use, you’d probably find the SWOT analysis being mentioned by the majority of the group. It is ubiquitous, found in almost every marketing plan that we as a consultancy have seen and yet very, very seldom is it used in a way that actually adds value to any decision-making process.
So, we all use it but very few people use it properly. In this article, we’ll have a look at the SWOT analysis, identify some of the most common mistakes and then show you how to build it in such a way that it adds value to your brand plans.
The basics of the SWOT analysis
Let’s begin with the basics of the SWOT analysis. The acronym SWOT, as you’ll remember from business school, stands for Strengths, Weaknesses, Opportunities and Threats and is built using four quadrants, one for each of the elements.
Anything above the central horizontal line is internal to the firm whilst anything below it is external. In the same vein, anything to the left of the central vertical line is positive and anything to the right of the same line is negative.
How can the SWOT Analysis be used?
There are three main ways in which a SWOT analysis can be used within a brand plan:
- Tabulating & categorising
- Deciding on strategy
- Matching & converting
Tabulating & categorising
This is the way that most of us use the SWOT analysis. A simple summary page within a brand plan where we list everything that we can possibly think of about the brand and the environment within which we operate… and then forget about it.
This approach is both time-consuming and useless, consuming resources at one of the busiest times of the year for the brand team and delivering nothing in return. Long lists of strengths or weaknesses, for example, add nothing to our analysis as we try to glean the key points affecting our brand.
Finally, why spend time on something if it isn’t going to guide your decision-making?
Deciding on strategy
The interplay between the four quadrants provides us with some guidance as to the strategy we should be considering.
When the brand has a lot of strengths and there are lots of opportunities within the marketplace, it makes sense for the brand team to adopt an offensive strategy to try and gain marketshare.
When the brand has a lot of strengths but there are a significant number of threats in the marketplace, possibly during the brand’s late lifecycle, it makes sense for the brand team to try and protect brand market share by adopting a defensive strategy.
In cases where the brand team has a predominance of weaknesses but there are still a lot of opportunities in the market, the brand team may adopt an opportunistic strategy that allows them to minimise the effect of internal weaknesses. These weaknesses may stem from a lack of marketing spend or other resources or possibly even from a limited marketing licence for a product. In this case, the brand team will be very selective with their marketing spend, targeting it very carefully or using cheaper channels to achieve their desired results.
Finally, when internal weaknesses dominate in a market that contains a lot of threats, the strategy becomes one of either survival, minimising spend and reconsidering strategy, or possibly divestment in order to reinvest the freed up capital elsewhere in the business.
Matching & Converting
Quite simply, matching is used to identify competitive advantages against the competition by matching strengths to opportunities. If, for example, there is an opportunity offered by a customer shift to digital channels and you have a strength in this area, you may want to develop this into a sustainable competitive advantage.
Converting, on the other hand, is defined as using the SWOT analysis to identify weaknesses or threats that can be converted into strengths or opportunities with suitable investment and an appropriate strategy. An example might be an threat where prescription of your product is moving from primary care to secondary care and you have a weakness of having no experience of working with that customer group. If you have enough notice, you may wish to invest in acquiring this experience through recruitment or consultancy to convert your weakness into a strength.
How to build an effective SWOT Analysis
There are four key steps to building a valuable SWOT Analysis:
- Never try to build it on your own
- Do not allow talking whilst capturing the initial key points
- Rank the key points from most impactful to least impactful
- Discard any points that will not directly impact your decision-making
Never build the SWOT Analysis on your own
You may well be the smartest person in any given room but seldom do you know everything. It therefore makes sense to build the SWOT analysis in cooperation with the wider cross-functional team, so that you can ensure that you do indeed capture all of the relevant points that will guide your decision-making.
Do not allow talking whilst capturing the key points
As with many brainstorming sessions, one of the key challenges is ensuring that you capture all of the relevant points. Too often key points don’t make it onto the list because team members self-censor them, or you have a dominant member of the team who strongly imposes their views and ideas. The best way to minimise these challenges is by banning talking during the idea generation phase.
Instead of discussion, provide each team member with a pack of post-it notes and a pen and ask them to write as many key points that they can think of, within a given time limit and in silence, by capturing one key point per post-it note for the quadrant in question. The post-it notes are then put up on a flipchart or whiteboard, still without talking. Once they have done this, ask them to group all of the post-it notes into common themes. At no time during this stage should anybody remove a post-it note from the board.
Rank the key points
Once the key points are grouped, it is time to rank them from most important or impactful down to the least important. This needs to be done through discussion within the group. Generally, you will find that the more people who have captured a certain key point, the more important it is likely to be.
Discard any key points that will not directly affect your decisions
The final step is to critically assess which of the points will really impact your decision-making. Any that will not make a difference to your choice of strategy or tactics should be discarded as they will otherwise simply clutter up the SWOT and detract from your story.
Be ruthless and extremely critical when deciding which key points will make the cut.
What are the most common mistakes made when building the SWOT Analysis?
There are five main mistakes that people make when building the SWOT analysis:
- Items in the incorrect quadrant
- Items censored too soon
- Too many irrelevant points included
- No definitive diagnosis written in summary
- Building the analysis and not using it
Items in the incorrect quadrant
Without a doubt, this is the most common mistake that we see. Strengths are often classified as opportunities, weaknesses classified as threats and vice versa.
The key to ensuring that items are placed in the correct quadrants is to ask two key questions. Firstly, is this item internal to the firm or external? Secondly, is this item positive or negative with respect to the firm or brand?
Items that are internal to the firm will be either strengths or weaknesses, depending on whether they are likely to have a positive or negative impact on the brand. Items that are external will therefore be opportunities or threats, depending once again on whether they are positive or negative to the brand.
It is also important to remember that the way a key point is phrased can determine in which quadrant it will be placed, so remember to word your points carefully.
Censoring items too soon
A second critical error that we often see is when team members censor items before they even make it to the SWOT grid. This often happens in teams where you have one or two dominant personalities who are particularly vocal but it also happens individually when participants aren’t confident in their own opinions.
Whilst the final list needs to be concise, it is essential to capture all possible thoughts before editing the list.
Too many irrelevant points included
We have all seen them, SWOT analyses that are so filled with information that they resemble Tolstoy’s War & Peace, but without the engaging story. SWOT analyses that contain too much information are simply useless and become too cumbersome to add any value to your planning process.
Keep the SWOT concise and clear, ideally having no more than 5 or so key points per quadrant. Actually, on that note, please ignore anything that you hear about SWOT analyses needing to be balanced (the same number of points in each quadrant) – there is no scientific basis for this to be a consideration. You, after all, are not going to invent additional brand weaknesses if you don’t have them, simply to “balance” a SWOT analysis.
No definitive diagnosis written for the SWOT Analysis
Too many SWOT analyses are simply compiled and slapped into a marketing plan without any attempt being made to, in turn, summarise the two or three key points that are of critical importance. These two or three key points should be summarised very briefly in a couple of sentences and included with the SWOT.
Building the SWOT and never using it
In almost every brand plan I have seen, the SWOT is treated as a tick box exercise to appease managers who have requested it. The SWOT is a great tool to summarise insights but, if used properly, it can be the tool that guides the brand strategy.
Take the time to build your SWOT analysis properly and use it to guide your decision-making, as well as explaining your key challenges in the market in a simple and concise manner.
The SWOT analysis is a simple but effective marketing tool that, if developed and used properly, can help you describe your current market challenges and help you shape your brand strategy within your marketing plan.
Remember though, to keep it concise and clear, reducing the number of points to only those that will affect your decision-making, and summarise the top two or three key points in a couple of sentences below the SWOT itself.
For more information on how to develop effective SWOT analyses or if would like to see how The Cape Marketing & Consulting Company can help you develop effective brand strategies, please contact Andrew Wilmot at firstname.lastname@example.org.