SWOT Analysis: See Potentiality To Catalyze Your Competitive Advantage
Underscoring your company’s mission and vision are its core values, which are intrinsic to shaping your important decisions and the catalyst for ethical behavior. Endorsing your core values and mission are excellent employees, whom you’ve hired to move your company in its strategic direction and achieve the company’s goals.
Your personal activities are organized; you usually don’t meander through life aimlessly. Similarly, as company CEO, you’ll plan for successful business growth that is carefully thought out, not impulsive. How will you determine the path of least resistance to lead your company to success? Will you franchise your business? Are you considering buying a competitor? To discern the best path for your company’s future success, you’ll begin by reviewing your company’s past performance, which will help you manage future risks to protect your stakeholders’ interests. A strategic action plan will provide your company with key insights so that when a pandemic or other unforeseen circumstance develops, you’ll be nimble and able to respond instantaneously, thereby minimizing risks.
A helpful strategic technique that you can use to navigate obstacles is the strategic plan hierarchy triangle and the SWOT analysis (strengths, weaknesses, opportunities, and threats) that I’ve created. The SWOT analysis is not a panacea, but a great facilitative tool that provides a realistic view of your company or organization in the industries in which you operate. Companies can use the SWOT analysis in brainstorming sessions in which your employees discuss core competencies and weaknesses, and provide input about unmet opportunities. Additionally, it’s important strategically to foster awareness about competitors who work in the same industries in order to differentiate yourself from them. For threats lurking in the industries in which you participate, the SWOT analysis can help you mitigate them by alerting you to potential hurdles and company weaknesses. Internal weaknesses become threats if not carefully tempered. In identifying them, you’re able to prepare for threats that can unexpectedly ambush your distribution network, supply chain, skill set, products, or services.
You’ve invested much time, money, and creativity in starting this company, and you shouldn’t ad-lib on its strategic direction. You’ll want to navigate your daily operations determinedly by setting realistic goals through the strategic planning process. By fleshing out a strategic action plan that coasts and vacillates with the changing marketing landscape, you’ll be better prepared for unexpected challenges.
Ultimately, your company’s purpose is to create value for your stakeholders: customers, suppliers, investors, and mass media. You create value with financial investments or with cost-cutting measures, but you can also do so by tapping into the talent of employees from all levels of the organization, by innovating, or by diversifying your company’s products or services, among other value-creating measures.
The strategic planning hierarchy triangle (R) is a planning tool blueprint to help your company or organization move from stalemate to success. In last month’s blog, I covered the relatedness of the mission, vision, and core values. Remaining in the bottom blue section of the triangle (not covered in last month’s blog post) are the core competencies and market opportunities, which are my focus for this post. I have also produced a SWOT analysis (below) to help you discern your company’s strengths or core competencies and identify potential market opportunities that you can utilize. Your company creates a competitive advantage and establishes a sustained position, if brief, by seizing on your strengths and applying them to market opportunities.
Some core competencies emerge from blending primary capabilities in which your company excels with other less developed competencies. A combination of competencies creates specialized expertise that is difficult for competitive firms to copy. Combined competencies come from a variety of possibilities, some of which are not obvious—like velocity and agility. Velocity and agility, which lead to the ability to adapt to change quickly, are dynamic capabilities, and these competencies are difficult for competitors to replicate.
Breaking news that occurred during the pandemic exposed shortages in ventilators, face shields, and other PPE. Some companies were able to retool their existing technologies and reposition themselves rapidly to respond to these emerging market needs. Dr. David Teece, cited author, professor, and scholar in the combined field of business and management, asserts that the capability to change depends on the ability to scan the environment, evaluate markets, and quickly accomplish reconfiguration and transformation ahead of the competition. Perceptive employees, if they can imagine a hidden market, can help you beat the competition by getting out ahead of them; and for a short time, you can enjoy a sustainable competitive advantage.
Distinguishing yourself from competitors with unique activities that are difficult for competitors to imitate is the essence of strategic planning. The SWOT analysis reveals areas in which talents and opportunities converge to fulfill customer needs and in doing so, provides an economic boon for the company. Expertise in continuous improvement, idea generation, synergy, IT integration, technology, processes, knowledge absorption, R&D, and superior performance, for example, are strengths that your staff is cognizant of and can readily leverage. The knowledge of employees and expertise in multiple technologies is infinitely more valuable than leveraging products, which become obsolete.
Consider the company, Apple. The company has merged many capabilities and created numerous products in many markets. Its core product innovations come from a combination of several core competencies. What is notable is that the company structure encourages employees to contribute their knowledge and talents freely, not only in their respective business units, but also across the organization.
In addition to Apple’s innovations, its customer relationships are a significant competency for Apple. Apple’s cult-like following is not coincidental. Apple woos customers. The company is proficient at relationship-building. Its store retail staff members have hundreds of conversations with customers every day. They’re trained to listen intently. That simple competency, listening, is at the core of Apple’s business processes. The company is certainly excellent at marketing, but there are no aggressive selling tactics; rather, it’s about appealing to customers’ senses through exploitation of Apple’s superior products. How does the company do this? That too, is incredibly creative.
Apple dropped the name “store” from its branding to promote an aesthetically pleasing, village-square surround. Customers are delighted with the immersive tactile experience of testing the products and interacting with Apple specialists, who listen to their questions and offer product solutions to mull over. The seductive quality of Apple’s products is overwhelming, the compulsion to buy, immense. Apple capitalizes on customer emotion.
In forging such a broad fan base with its retail and online presence, Apple has created a sustainable competitive advantage that few companies in the same sphere can duplicate. The customer relationship imbued into Apple’s products is a big differentiator that results in another core competency: loyalty. As Apple churns out new products and their complements emerge, loyalists wait expectantly, and the cycle continues.
After Completing Your SWOT Analysis, What’s Next?
Once your employees identify your strengths and weaknesses, which are internal to your company, consider the externalities. Be inspired by the opportunities and remain vigilant about the threats. Ask employees to review your strengths in the strengths quadrant. Rank them (from 1–10, with 10 being best) according to ease of enhancement or implementation.
Apply the same ranking to the opportunities quadrant, emphasizing the tasks that can be tackled swiftly. Being first to market often brings a competitive advantage for a short time until others enter to grab some of the market share. Velocity and agility reign.
To build a winning dynamic capability, see whether one or two strengths from the SWOT analysis can integrate well with an opportunity. For example, brand identity in the strengths quadrant is a marketing strategy. Global expansion in the opportunities quadrant is a sales strategy. Combining a new brand identity package (marketing strategy) with entering new global markets (sales strategy) are two complementary strategies that form a powerful strategic barrier that is difficult for competitors to penetrate and replicate.
“Enthusiasm” in your strengths quadrant is a skill that you’ve instilled as part of your HR department’s workforce training for the customer engagement and sales departments. Clearly, these employees are your strongest brand ambassadors. You’ve successfully sprinkled enthusiasm as a core value into your brand identity. Enthusiasm, when effectively infused at all touch points in the customer journey, helps nurture relationships. Enthusiasm spawns loyalists, referrals, advertising partners, the best suppliers, and repeated sales. Maybe you hadn’t thought about enthusiasm as a strength, but we’ve seen it used effectively by Apple through the tactile, emotional high that customers get simply from bonding with Apple’s products.
We’ve also noted that Apple has displayed dynamic capabilities with its ability to adapt to consumers’ needs with velocity and agility, by quickly offering iterations of products with expanded features that customers have grown to love and value. Some companies master this (Apple) whereas others have failed to innovate because headstrong managers continued down a hard-nosed path of the same old technology. While the world evolved, innovation in markets advanced rapidly, and those companies became bygone memories (Polaroid and Kodak). Indeed, innovation and strong leadership are important competencies that are relevant to successful business growth and when combined, can thwart competitors.
Decisions, decisions—After you’ve combed through everything in your SWOT analysis, decide which competencies in your strengths quadrant are springboards for market opportunities and elicit consumer desire or engagement. Take action!
Think with clarity when you review the opportunities quadrant. If it’s financially feasible for you to make an acquisition to increase your reach or expand your capabilities, then do it. Take a risk!
When developing company-wide strategic goals for your strategic action plan, it is vitally important that they reflect your company’s mission, vision and core values. A common acronym for measuring goals is SMART. It stands for specific, measurable, achievable, relevant, and time-bound. After refining your company-wide strategic goals, consider your measurable objectives.
Objectives are specific, quantifiable, and highly focused actions that particular departments or employees perform daily to achieve the company’s mission. Use the same acronym, SMART, to manage your objectives. Derived from the objectives are your tactics.
Tactics are concrete, essential, short-term tasks that an individual or a department team performs to meet the company’s objectives within a specific time frame to bring about a competitive advantage for your company.
The Resources in your strategic action plan are what your staff needs to achieve the tactics. These resources include databases, cash, equipment, patents, machinery or technology tools, and employees with specific skills.
Timelines are important for reaching certain milestones within a designated period, whether weekly, monthly, and/or quarterly, or for completion of a project that coincides with achieving an objective.
The Outcome Metrics pertain to analytics and measures that you’ll put in place to illuminate company growth and profitability. In this blog post, our Strategic Goal #1 is to increase the profit margin by 17%, which will require outcome metrics that measure business performance. Your marketing and sales departments will provide evidence that you are meeting your customers’ needs. One criterion that reflects your company’s bottom line is net profit: Use this equation: Net Profit = Total Revenue – Total Expenses.
Please see the basic strategic action plan grid that I’ve formulated listing one company-wide strategic goal to help you get started with your strategic planning.
YOUR COMPANY/CORPORATE MISSION
(Write it)
YOUR COMPANY/CORPORATE VISION
(Write it)
Strategic Goal #1: Increase the profit margin by 17% (company-wide)
(Broad-based problem that aligns with your vision)
1) Objective: Increase brand awareness by 5% (marketing teams)
(Specific to strategic goal #1 with tactics to accomplish the objective)
Tactics
- Rewrite all marketing and sales collateral (Marcom Dept.).
- Assist with generating high-quality leads through aggressive PPC ads and email campaigns across all marketing channels, especially social media, and responsibly track leads (Social Media Dept.).
- Create attractive new brand identity package; clarify messaging to attract your target market; modernize the logo and typeface; review color palette, taglines, and visual elements in all marketing materials for consistency (Digital and Social Media Depts.).
- Incentivize all employees to become brand ambassadors (live tweets, photo posts) on social media, and provide rave reviews about the company on professional business sites (Digital and Social Media Depts.).
- Create a new media kit when the Marcom Dept. completes the rewriting of all collateral (Social Media Dept.).
- Organize quarterly company events and provide free company swag, which is a write-off (Marcom Dept.).
- Prepare a quarterly internal newsletter or company intranet. Deliver interesting, shareable company news to employees, and ask employees from each department to contribute newsworthy company stories (Digital and Marcom Depts.).
2) Objective: Increase sales by 7% (sales teams)
2) Objective: Increase sales by 7% (sales teams)(Specific to strategic goal #1 with tactics to accomplish the objective)
Tactics
- Employ upselling, bundling complementary products, and cross-selling techniques for existing and new customers.
- Achieve higher sales (designated $ per week), and receive a deeper commission incentive.
- Increase customer value using a loosely scripted sales pitch about introduction of new complementary products.
- Increase service contracts by upselling maintenance agreements.
- Be flexible with key customers and provide discounts when possible. Keep loyal customers secure and enamored with the company.
- Refine internal sales processes, streamlining sales phone etiquette and online response to customer inquiries.
- Increase attendance at trade shows, promoting the company’s unparalleled products with superior collateral.
3) Objective: Reduce expenditures by 7% (finance teams)
(Specific to strategic goal #1 with tactics to accomplish the objective)
Tactics
- Have finance department audit each department for imprudent spending.
- Preapprove expenditures, and cap departmental capital expenses.
- Negotiate lower supplier pricing and contractual agreements.
- Reduce travel expenses.
- Review, streamline, and provide oversight to department budgets.
4) Objective: Increase customer loyalty by 7% (customer experience, call center, sales teams)
(Specific to strategic goal #1 with tactics to accomplish the objective)
Tactics
- Improve customer experience processes and revamp the dialogue scripts for answering the phone.
- Provide exceptional customer service and communicate a quick (scripted) core value phrase before transferring the call.
- Communicate the company’s appreciation to customers and educate them on a new loyalty promotion.
- Delight customers, be hospitable, and always greet customers with enthusiasm.
- Review your key customers’ social media feeds to reveal their activities. Surprise them with a special, unexpected, branded gift.
- Woo customers and suppliers; don’t get complacent. If customers or suppliers sense a detached or disinterested customer experience, competitors are waiting in the wings to welcome them.
- Administer post-communication customer satisfaction surveys through IVR (interactive voice response). Ask for feedback regarding personnel, product, department, company, and efficiency.
The maneuverable quality of both the strategic action plan and the SWOT analysis helps inspire your employees to realize their strengths and weaknesses and use the knowledge for continuous improvement. In meeting your company’s objectives, these strategic tools prepare upper management to respond accordingly to unforeseen trends, unmet market needs, and abrupt market changes, making adjustments and moving with agility and velocity.
When you engage in markets with fierce competition, floundering is not an option. The strategic planning process enables you to garner marketing research, set organizational or company-wide policies and procedures, scrap products that aren’t profitable, and enter markets you hadn’t considered. While there is quite a bit of up-front work to create a SWOT analysis, matching your resources and competencies to the competitive environment in which you operate helps you to see potentiality and catalyze your competitive advantage. Operational excellence requires acumen and preparedness to meet unexpected challenges; and for those reasons, strategic planning is a resourceful use of time.
By Patti Kondel, CEO, Savvy Swan Communication and Marketing, MBA from the University of Massachusetts, Lowell, and MA from Emerson College, Boston. Patti is a business and marketing specialist, brand booster, lover of the arts, yoga practitioner, content creator, and cookie connoisseur—the sweet variety—and for marketing consumption, Internet cookies too! Let me help you trumpet your business to the world! Contact me today!
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