People who are married to their two-by-two SWOT analysis squares should just stop here. If you feel your standard analysis of your company’s strengths, weaknesses, opportunities, and threats are working for you, there’s no point in reading further.
However, if you’re like many other self-reflective marketing and sales leaders and me, you’ll realize your typical SWOT analysis rarely provides beneficial insights and offers no clear path of action.
In fact, many professionals conduct a SWOT analysis as a glorified brainstorming session to list and categorize internal and external factors that impact your business offerings. Most of the items within the list are short phrases that often aren’t accompanied by explanations, meaning that this also contributes to short-sightedness when focusing on the opportunities section.
Before we get too focused on all the ways you’re doing SWOT analysis wrong, let’s take a look at how you can create more opportunities and generate more leads with realistic action items by giving your SWOT analysis a major glow-up.
Forget What You’ve Always Been Taught and Flip the SWOT Script
Okay, don’t completely forget what you’ve been taught. The knowledge you’ve gained through the traditional SWOT analysis process can still be useful. Just tuck it away for use at another time.
Because we are most familiar with our brand and processes, many people focus on internal factors first and foremost when conducting their SWOT analysis—which, when you think about it, is pretty odd. External factors are the items that make internal factors relevant in the first place. So why are we starting with evaluating the strengths and weaknesses of our internal processes when external factors give us even more insights into those strengths and weaknesses?
The moral of the story: Focus on your external factors first. Identifying your opportunities and threats will give you more realistic and specific action items throughout your strengths and weaknesses analysis that will positively impact your prospecting efforts, sales tactics, and marketing strategies.
Set Your SWOT Foundation by Identifying Opportunities and Threats
Whether you are using the PEST, PESTEL, or STEEP techniques to begin cataloging your opportunities and threats, identifying environmental elements comes down to six factors:
- Social: Social trends rise and fall and seem to change as frequently as a month-by-month basis. These are important to monitor. However, social trends impact the demand for your company’s products and services, which in turn affects how your company should operate. For example, as more people throughout the United States become more and more health conscious, health insurance providers began partnering with HR departments to provide discounts to employees who wear fitness monitoring devices. While this benefits the participant financially, it also benefits the health insurance provider by reducing the participant’s health risks in the long run—thus, saving them money as well.
- Environmental: Environmental factors include aspects like weather, climate, natural disasters, and more. We’ve all experienced an example of an environmental factor that many businesses for a while found as a major threat: Covid-19. Many businesses felt and are still feeling these effects.
- Technological: Technological factors include aspects of automation, research and development, and other innovations in technology. Being constantly aware of disruptive technological changes can determine your company’s decision on certain spaces to enter and when to enter them. For example, many companies are now increasing their investment in technology to enable more remote work for employees, as this is a trend that has greatly increased over the past few years.
- Economic: We are seeing economic trends impact many industries right now as a recession becomes more and more of a concern for many in America. Economic factors include growth, interest and exchange rates, and also inflation. As all businesses are created to profit, economic factors can be of the heaviest threats to companies.
- Political: Political factors impact to what degree the government gets involved in a company’s dealings on a local, state, or national level. Any influences the government has on your business could be seen as a threat or opportunity—tax credits, trade policies, labor laws, EPA compliance, etc.
- Legal: In order to exist as a business, it is obvious that companies need to be aware of the legalities that pertain to their businesses, products, and services. Being aware of changes in legislation that impacts your company is a necessity as well. Legal factors overlap with political factors and could include laws like GDPR and CAN-SPAM.
All six of these factors can be used to identify opportunities and threats within your SWOT analysis. Make sure you’re considering each area with a broader perspective to see how all items identified tie into each other to meet your goal. And that’s key here: Your opportunities and threats should be directed toward your agreed-upon objective for the analysis. Each item in your SWOT analysis should be detailed, whether it’s a phrase or a sentence.
Once your opportunities and threats are identified, you can more easily move on to the internal factors impacting your strengths and weaknesses.
An extra pro SWOT analysis tip for you: Our brains are programmed to identify negative items more easily than positive ones. Threats may be easier for you to come up with than opportunities. At the end of the day, we want to ensure all teams are identifying how your products and services can be successful amongst the competition and adapt to the ever-changing environment.
From a Red to Blue Ocean Strategy: Choose the Lead Generation Shade That’s Right for You
I’m totally stealing Professors Chan Kim and Renée Mauborgne’s analogy of the blue ocean strategy.
Your SWOT analysis moves your brand, products, and services from the crowded, highly aggressive areas of the “red” ocean, where there is more competition for limited demand, to the “blue” ocean. By tying in all detailed items from your full SWOT analysis—reviewing and connecting all opportunities, threats, strengths, and weaknesses—your teams will be better prepared and informed when developing prospecting, sales, marketing, and recruiting strategies.
Oftentimes, reviewing the overall SWOT chart provides clarity on factors you were previously unaware of and would not have captured without the full deep dive, beginning with external factors. However, in order to get the full benefits of a SWOT analysis, you need to walk away with action items.
Take Your SWOT Analysis Out for a Night on the Town and Generate More Leads
You’ve done the work. It’s time for the rewards. You know what your business does well and how to avoid the areas where your company falls short. Because you have a better understanding, you’re now able to align your offers and services with your target market, ultimately positioning your sales and marketing tactics to attract your ideal customer.
The extent to which your internal factors mirror external factors determines a strategic fit for the companies you are trying to gather into your pipeline. You’ll then use the strengths and opportunities identified in your SWOT analysis to formulate more effective communications with your prospects, as well as use your weaknesses and threats to identify where improvements throughout your sales and marketing strategies can occur.
However, just like with a great face of makeup, none of that is possible without first setting the proper foundation. Trust me, this is the glow-up your SWOT analysis has been waiting for (and your pipeline has been too).