Marketing Q&A By Al Jabaly

Al Jabaly is a certified marketing and business consultant with over 20 years of small business experience. Email your questions to al@FloridaBA.org. All questions will be answered via e-mail. Some of the most interesting questions will be posted in this weekly column. For further information, Al can be reached at 1-888-899-3190

"Al, what does (swat), in marketing, mean & please show me how it can help my business."

It is actually spelled SWOT and it stands for Strengths, Weaknesses, Opportunities and Threats. SWOT is a very valuable tool for every business owner of any size. It is a very simple analysis that every owner must use, at least once a year, to get a clear insight into potential and critical issues affecting the business. The primary purpose of a SWOT analysis is to identify and assign each significant factor, positive AND negative, into one of four categories and allows you to take an objective look at your business. SWOT develops and confirms your goals and your marketing strategy. Without SWOT, it will be like trying to find your way out of a thick jungle without a compass or a map! Let me walk you through the steps involved in doing a SWOT analysis for your business!

Take a standard piece of paper and draw two lines to divide it into 4 equal quadrants. Start with the top left quadrant and write STRENGTHS (Internal). Move to the next quadrant (top right) and write WEAKNESSES (Internal). Now move to the bottom left quadrant and write OPPORTUNITIES (External) and finally move to the bottom right quadrant and write THREATS (External). “Internal” are factors within your control. “External” are those factors outside your control. When you start filling up these 4 quadrants, you need to be 100% honest with yourself!

Let us start with STRENGTHS. In this quadrant, write down the positive, tangible and intangible assets, internal to your business. Examples are your capabilities, unique selling points, experience, knowledge, your location, your prices, quality, accreditations, your reputation, people who work for you and the skills they bring, available capital, equipment, customer base, years in business, etc. Strengths are the positive aspects internal to your business that add value or offer a competitive advantage. Write the STRENGTHS which you want to maintain and add to.

Now move to the top right quadrant titled WEAKNESSES. Write the internal weaknesses within your business that are within your control and detract your ability to obtain or maintain a competitive advantage. Ex. lack of expertise, limited resources, lack of access to skills, lack of needed equipment, poor location, poor customer service, etc. These weaknesses are under your control but, for a variety of reasons, are in need of improvement to achieve your marketing objectives, and are factors that need to be diligently worked on to be removed or reduced.

Move to the bottom left quadrant: OPPORTUNITIES. These are external to your business. What opportunities that exist in your market that you can or hope to benefit from. Opportunities may come as a result of market growth, lifestyle changes, seasonal, weather changes, fashion influences, major contracts awarded locally, etc. 3 simple examples: you are a janitorial service company and you see a whole new and large shopping center, or an office building, being finished. That represents an OPPORTUNITY for you to increase your business. You own a security alarm business and you read in the paper about an area of town that was hit by burglaries. That represents an opportunity for you to sell your service. Many homeowners are facing huge increases in their mortgage payments because of the ARM deals they were sold. If you are a mortgage broker, you can be making a lot of money helping these people refinance their homes and replace these ARM mortgages with more affordable ones!

Lastly, move to the last quadrant: THREATS. These are factors beyond your control that could place your marketing strategy, or even the business itself, at risk. A threat is a challenge created by an unfavorable trend that may lead to deteriorating revenues or profits for you. Ex. price increases by your suppliers, government rules, economic downturns, devastating media or press coverage, shift in consumer behavior, introduction of technology that may make your service or product obsolete, etc. Write your worst fears, some may be real and others speculative in nature. Classify these threats according to their seriousness and probability of happening.

Now that you have filled in your SWOT analysis, start thinking about how to increase your strengths, minimize your weaknesses, take better advantage of your opportunities and minimize the harm threats may introduce if they become a reality and how you can plan to adjust to them. The true value of a SWOT analysis, in the above organized written form, is to give you a very clear picture of your business, the market and its place in it.