Marketing and Science Start with Observation
Scientists begin their process by observing their environment. Good marketers do the same thing, studying industry trends and market conditions to identify new opportunities. A S.W.O.T Matrix is often used to organize and analyze the information they observe.
The S.W.O.T Matrix
This tool outlines the factors (both internal and external to your business) affecting your success. A S.W.O.T analysis is the starting point for the development of action plans: capitalizing on your strengths, compensating for your areas of weakness, taking advantage of marketing opportunities, and addressing market threats.
The S.W.O.T. Matrix begins with a listing of your strengths. For most small business owners, this is both the strengths of your business and the personal skills you bring to the company. For example, a small Software Consulting firm might create a list like this:
- Existing relationships with key decision makers
- Strong technical skills
- Microsoft® certifications
- Established referral relationships with hardware vendors.
- Experience in several key industries
The second element in the S.W.O.T Matrix is an analysis of your weaknesses. This is always harder to do, but it is extremely valuable to critically assess areas for improvement. For the same consulting firm, the weakness list might look like this:
- Small client base and low brand awareness
- Limited marketing funds
- Not enough contacts outside a few core industries
- No administrative support
The internal factors, your strengths and weaknesses, are things you can directly control. Direct action on your part can improve a weakness; possibly even converting it to a strength. The internal factors make up only a part of the S.W.O.T Matrix.
The next two sections are comprised of external factors, opportunities and threats in the market place. These factors cannot be controlled directly. They do, however, have the potential to affect your business in a positive or negative manner.
Opportunities are market conditions and events which create a need for the products or services you provide. The software consulting firm in our example might describe include the following factors in their description of their environment:
- Growth of mid-size companies in local market
- New technologies offering customers dramatically improved access to information
- Major competitor signs exclusive agreement with one company, effectively taking them out of the market place for other projects
Like opportunities, threats are outside of your direct control. These external factors must be identified, and dealt with. A consultant might face the following external challenges:
- Sluggish economy makes key clients cautious about investing in new development projects
- Tight job market creates larger than normal pool of qualified consultants
- New management at key client
One final note on opportunities and threats; often one situation can be both. For example, a downturn in the economy may reduce the number of new projects but increase the requests for cost-reduction work. In this case, it is appropriate to list the situation as both and determine action plans to address both the opportunity and the threat.
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