Editor’s Note: This article was originally published by Web Marketing Today. Practical Ecommerce acquired Web Marketing Today in 2012. In 2016, we merged the two sites, leaving Practical Ecommerce as the successor.
Restaurants ought to make bigger napkins, since some of the most productive business ideas seem to come to mind over a meal. The SWOT analysis technique lends itself to napkin planning and snapshot insights. To conduct a SWOT analysis, draw a vertical line in the center of your napkin (or whiteboard or flipchart), intersected by a horizontal line. Now you have four quadrants where you’ll sketch your company’s situation.
Though a great deal of research may lie behind what’s in each box, keep it simple and incisive. Collecting these facts and ideas together in one place energizes you to see the big picture. Use it as a brainstorming tool. A strategy formation tool. Note that the first pair of categories — strengths and weaknesses — refer to your company’s INTERNAL nature, while the second pair of categories refer to EXTERNAL opportunities and threats.
In the first box list all the strengths your company possesses. Don’t be modest. Spell them out. If you do this with others, you might begin by brainstorming words that characterize your company and writing them down as fast as people say them. Then use those ideas to construct a profile of your company’s strengths.
In the second box list weaknesses, areas your business lacks or doesn’t have the personnel to cover well. Be honest. It’s better to face the bad news now rather than construct an unrealistic marketing plan that is doomed to failure.
The third box is for opportunities. When you look at the market (and we’re looking particularly at the Internet market in this series), what do you see? What AREN’T your competitors doing that customers need? Look for gaps. Of course, this is related to a competitive analysis; none of these elements of a marketing plan stand alone; they’re all interrelated. Gaps may not last long. What you see as an opportunity today may not exist in three months. A SWOT analysis is only a snapshot in time, not a permanent document.
The final box is to list threats to your business. What trends do you see that could wipe you out or make your service or product obsolete? What are your competitors doing to push themselves ahead? What new dot-com start-up is trying to move into the market?
Here’s an example of how a SWOT Analysis might look for a fictional animal greeting card site, CrawlyCards.com, specializing in pictures of ground-clinging creatures such as slugs, snails, and puppydog tails.
Obviously this company has some real problems — no effective revenue model — but at least they’re looking at alternatives. This is what a SWOT analysis can do for you, and may be the germ of an idea that will revolutionize the snail and slug card business as we know it.
(To those of you from a different culture, this example is a joke. Please don’t take it seriously, just an example of Yankee poor taste. It helps lighten up an otherwise dull subject.)