- I'll take you through a little introduction that explains Professor McDonald's theory on SWOT Analysis;
- Explain what SWOT means;
- Teach you how to understand your customers;
- Give you some interesting tips on how to make it work.
professor McDonald says
SWOT Analysis only works if we do our Market Segmentation properly and we choose only one element at the time. Doing
it differently will make it useless and chaotic and it will turn out
to be just a waste of your precious time.
There are so many different categories for each and every business but in order to beat the competition , segments must be carefully checked. Do you want to be different and beat those ugly competitors? Well, then your SWOT Analysis should be different too.
Unfortunately, most analysis are one and the same and often turn out to be a complete nonsense. Sadly enough the average student is taught to do...average in a world where you can be easily eaten or beaten by the competition. When we talk about SWOT we all know what stands for, right?
S for strength
W for weakness
O for opportunities
T for threats
If you are not very familiar with those four, we will see them all briefly shortly after.
What was I saying? Right, I was talking about SWOT Analysis being done average most times. If you see those done in school, some of the threats and opportunities are so obvious! The weather or possible changes in regulation, as McDoldalds states, will always be there! So you HAVE TO try to be different then and find those opportunities nobody is able to spot.
Let's see those four points together, first of all...because we all say we know exactly what they are, but are we really sure? As repetita iuvant , there is no harm in seeing them quickly.
A SWOT ( strengths, weaknesses, opportunities, threats) Analysis is a simple graphics that helps to spot and understand key issues affecting your business. This doesn't mean SWOT will offer a solution to beat your competitors, however it will help you to focus and develop those points you are doing good at, and make you aware of those other you lack in. SWOT works where you understand your limits meaning what you can achieve and what you cannot. The internal factors of a SWOT Analysis are Strengths and Weaknesses, whereas the external are represented by Opportunities and Threats as shown in the picture below.
When properly used SWOT helps in assessing resources and capabilities underlining at the same time those weak points that need to be reviewed in order to face the competition.
No matter how big or small, how old or new your business is, you will be able to fill in the chart, with some elements of each of the four categories!!!
LET'S SEE THEM ALL NOW!!!
Strengths: i.e. internal resources and procedures that a company does well. These include:
equipment used (the newer the better);
and competent staff;
Weaknesses: internal resources that a company does not do well and need improvement or something the company lacks. These may include:
of experienced staff;
of attention to marketing and marketing plans;
or wrong brand image;
equipment and location, etc...
Opportunities: Growth and profit are based on the company's ability to capitalize on new opportunities. Some of them are realistic while others are not due to the company's lack of internal resources and strengths. Among those:
use of social media;
Threats: what may hinder the company's profitability and competitive edge:
expense of running media ads;
and economic effects;
to be faced;
The above bullets are not a comprehensive list. They vary depending on your product and markets. For each bullet, you need to identify the good points and the bad ones, how to improve and how to defend.
Having said that, what should we do to conquer the market?
Professor Malcolm McDonald says real SWOTS should be more concise and more specific having as its final score the result of a strengths/weaknesses analysis from a customer perspective, showing the status of our company and other competitors. So have you established your strengths and your weaknesses? If the answer is YES, then you are ready to face the impact of threats and to explore new opportunitie!
then, but we said most SWOT are average and all identical,
yours be different and why should you invest your precious time
(because a good SWOT will require a lot of dedication of course!)?
Well well, the main advantage of conducting a SWOT Analysis is that it has little cost...sometimes no cost at all... and can be conducted by your own staff that fully understands what you are talking about! This will allow you and them to concentrate on those factors that affect your business the most. By doing that you will also:
your business better;
weaknesses and reduce them;
advantage of your strengths;
business goals and strategies
We said that to make it work properly, SWOT Analysis has to be applied to a particular segment of your market. However, if you are a business then your SWOT Analysis needs to encompass the whole company. This may be quite difficult, especially if you run a big one because all your employees will have their own opinion... so, what is the best option you have got? You need to get to your CEO and have them running the process!
Once segmentation is done, where do you start from? The answer is very easy: your customers, who will also be your finish point! Once you understand your customers' needs then you have hit the target! If you are starting a new product or service then you will have an idea of who your ideal customers are. Try to deeply understand what they really want and what they really need. Through market research, ask them what their expectations are and when you do it, remember to be as nice as possible. Your good manners will make them love you! Once you have plenty of answers than you have to put them in order and assess your results and see what they really want and how your competitors are doing in that particular segment of your business. Once your results are ready you need to divide all those features into three groups. Some of the answers will be Expected, meaning that, these are the basic features that your product must have. Some others will be so basic that they will be taken for granted! Other answers will be Delighters i.e. things that go above and beyond the basic answer, like improvements needed for the product you are selling to make it more interesting to buy. Last but not least the Dissatisfiers or those things that would leave people unwilling to purchase or unhappy after they did. It is the bad experience they won't forget. At the end of the day your product might not be liked by everybody, but hopefully, this last group of customers will be much smaller than the previous two.
Bear in mind that a SWOT Analysis only covers those issues that can definitely be considered a strength, weakness, opportunity or threat.
To make it work SWOT analysis must also:
- be short
and simple including though, important details like your staff skills
- be tidy:
your results must be listed in order from the most significant to the
multiple perspectives on your business from your staff, customers,
partners, and suppliers;
- be applied to a specific issue, a target or a goal you want to achieve (segmentation!!!);
- be projected
in the future so that you know where you are going;
- be businesslike
to compare your business to others;
- be competitive.
The bottom line is, my friends, that every company is different and segments are different and require different SWOT Analysis, and each and everyone won't be the same. Every company has, therefore, to apply a different policy for the various types of markets available.
SWOT Analysis is a very powerful tool that can be a significant part of the diesel that drives our business but ONLY if properly done. If you have been good then your SWOT will give you the answer you need to be that number one among your competitors that makes the difference!