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How to Perform a SWOT Analysis

In business, it is important to strategically look at all of your possible alternatives to any given proposal or solution. But before doing so, it is helpful to perform a SWOT analysis on your company, your industry in general, or depending on the situation, even on yourself. "SWOT" is essentially an acronym for strengths, weaknesses, opportunities, and threats. When performing this type of analysis, you must assess your current situation using these four components of the SWOT framework.

Your situational assessment of your company and your industry will naturally consist of internal and external factors. Strengths and Weaknesses are the two components of the SWOT framework which focus on your internal situational assessment. The other two components, Opportunities and Threats focus on your external assessment of the given situation.

For example, take a fast food company, Company A, that is looking to expand its operations into a new country. Before doing so, it will likely want to conduct a SWOT analysis. Its assessment of its internal conditions will consist of an examination of the company's strengths and weaknesses:

Internal Environment - Strengths
  • Company A's domestic fast food sales have increased 75% over the past three years.
  • Company A has made heavy investments into advertising and promoting its products.
  • It currently enjoys a fast food market share of 55% in Region X.

Internal Environment - Weaknesses
  • Company A's product packaging, while appealing in appearance, is quite costly compared to that of its competition.

This process would continue until the company has looked at its internal strengths and weaknesses to a degree that it feels comfortable with. The next step then, is for the fast food firm to assess its external conditions by looking at the opportunties and threats. These two aspects differ from the strengths and weaknesses in that they are externally-focused; that is, they examine what's going on with the competition, the industry in general, and everything outside of the company itself:

External Environment - Opportunities
  • Overall industry fast-food sales have increased steadily over the past five years, and the trend looks like it will continue over the next few years.
  • Market studies have shown that the new market in which we propose to expand has a deep affection for our brand and the people there are anxious for our entry into the market.

External Environment - Threats
  • The cost of ingredients have increased slightly over the past year. This affects the entire industry, but especially hurts Company A's bottom line.

This process would again continue until the company feels confident in its assessment of the major external variables which could impact its ultimate decision: "Should we expand into the new market?"

Numerous other examples of SWOT analysis templates exist for you to see how they help managers make strategic decisions which potentially have a large impact on their organizations. The SWOT analysis is a therefore crucial first step in providing you with a complete assessment of your organization's capabilities and deficiencies, as well as of the external opportunities and threats in the marketplace.

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Developing a consumer-oriented marketing strategy

Not long ago, marketing activities were constructed to simply promote product sales and focus on building market share; strategies that focused on how companies could move the most units of merchandise were considered the right way to go. In today's competitive business environment however, marketing activities are constructed to fulfill the needs of consumers.

Consumer-oriented marketing strategies give the marketing manager the tools required to examine which stores/distribution channels should carry the product; the price-sensitivity of the product or brand, and which segments of the population are the purchasers of the product.

Therefore, for an organization to take on a consumer oriented approach, it will have to ask the following questions:
  1. How is the market segmented? For instance, are the primary consumers brand loyalists, cost-conscious, or conspicious consumers looking to purchase luxury items for status?

  2. What is the profitability of each of these segments? Once the segmentation of the market is known, the organization should then determine the size and profitability of each of these segments. The potential for large, underserved segments of the population to exist is there and organizations that have clearly identified these potentially profitable segments can find great success.

  3. What are the common characteristics of the consumers in each segment? Now that the company has defined the segments and the profitability of each one, the marketing management must then look at the characteristics, habits, values, and influencing factors of these potential customers. By doing so, the managers can better predict whether the segment is more likely to grow or to shrink in the future. This will undoubtedly have an impact on future campaigns and marketing strategies
A final point worth mentioning is that marketing management should also ask themselves if the existing customers are actually satisfied with the current products and services offered by the organization. Ideally, this is done after the market segmentation has taken place; this way the organization can better tailor its offerings to the needs of specific customers.

By determining who the customers are and customizing and tailoring their offerings to these customers, marketing managers can benefit by: a) fulfilling the needs of underserved consumers; and b) creating long-term value and growth opportunities for their respective organizations.

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How to sell: Developing the killer instinct

Jason Steadman, sales executive and CEO of Entronics USA, has compiled a list of ways that describe how he has found success in selling his company's products and services to other organizations.

The advice he provides is a culmination of the experiences and lessons he has learned from a Special Forces officer named Kurt Semko. Steadman suggests that in order to achieve sales success, one must:
  • Be creative by looking for new opportunities for business
  • Look for ways to help your potential clients, and not just try and sell to them
  • Don't try to oversell your products or services; only sell them what they need
  • Learn to read people - a very important (and attainable) skill for any sales person
  • Don't show off; nobody likes a braggart!
One of the more interesting points in the article is that it is inevitable that you will fail before you succeed; in fact, you pretty much have to fail before you can succeed according to Steadman, who compares this aspect of selling with a player at bat in baseball:
"What matters is moving on, making the necessary adjustments, and stepping up to face the next client believing that you will close the deal."
I recommend this article by Steadman which contains a brief foreward by author Joseph Finder, whose book Killer Instinct is based upon Steadman's real-life success stories. The complete article is available here for you to read.

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