SWOT analysis stands for Strength, Weaknesses, Opportunities and Threats. It is a really useful analysis techniques for business planning for all types of businesses, no matter their age or size. It was invented in the 1960s by a management consultant name Albert Humphrey and still remains one of the most commonly adopted techniques in business planning.
What is SWOT Analysis?
As the acronym suggests, SWOT analysis involves writing down all the Strengths, Opportunities, Weaknesses and Threats which affect your business. The results can be really interesting and the more people you ask to carry out this exercise for your business the better. Everyone will have a different perspective of your business from the CEO to Administrators and even customers.
Strengths & Weaknesses generally relate to the internals of the business. Here are some examples of questions to ask yourself:
- What does your business or team do better than anyone else in the market?
- What can you offer your clients that your competitors can’t?
- Do you have unique products, services or skills that your competitors don’t?
- Do you have strong customer relationships you can exploit or build upon?
- What does your business lack that prevents it from reaching the next level? Funding? Expertise? Resource?
- Why have you recently lost out on sales to your competitors?
- Do you lack a service offering that perhaps your competitors do offer?
These will be drawn out by noting down Opportunities & Threats, such as:
- Do you have opportunities to sell to existing clients?
- A happy customer service record to draw upon
- Are there high value of low value services or products which have high margins?
- Have there been recent regulatory changes which may open up new sales opportunities?
- Vertical integration;
- Highly competitive industry;
Once all your colleagues, stakeholders and customers have completed their SWOT analysis collate your results and begin to bring all the points together. From here you can start to use this data to develop your sales strategy.
Using SWOT Analysis to Develop a Sales Strategy
SWOT Analysis can help with developing a Sales Strategy by:
- Identifying your areas of strength that you can focus your sales efforts behind;
- Draw out service lines which your business offers and your competitors don’t, which may give you the competitive edge you need;
- Indicate areas of weakness that other parts of the business need to work on to support your sales activity like marketing or financing;
- Where have your sales efforts failed in the past and where can improvements be made;
- Establish areas your competitors are making sales and how you can offer this service, but at an improved quality.
SWOT analysis is a great management tool to help you develop your Sales Strategy. Using a very simple format you can quite quickly see where you are and see ideas for where you can be, all contributing to an effective sales plan. SWOT analysis is something that shouldn’t be overlooked!
Read More: What is a Sales Strategy?
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