SWAT Analyses for the Positioning Strategies

SWAT Analyses for the Positioning Strategies

The overall evaluation of a company’s Strengths, Weaknesses, Opportunities, and Threats are called SWOT analysis.

Strengths and Weaknesses Analysis

It also called internal environment analysis. It is one thing to discern attractive opportunities and another to be able to take advantage of these opportunities. Each business needs to evaluate its internal strengths and weaknesses. Clearly, the business does not have to correct all its weaknesses, nor should it gloat about all its strengths. The big question is whether the business should limit itself to those opportunities where it possesses the required strengths or whether it should consider better opportunities where it might have to acquire or develop certain strengths. Sometimes a business does poorly not because its departments lack the required strengths, but because they do not work together as a team.

Opportunity and Threat Analysis

It also called external environment analysis. The business unit should set up a marketing intelligence system to ‘track trends and important developments. For each trend or development, management needs to identify the associated opportunities and threats. A major purpose of environmental scanning is to discern new marketing opportunities. A marketing opportunity is an area of buyer need or potential interest in which a company can perform profitably.

Some developments in the external environment represent threats. An environmental threat is a challenge posed by an unfavorable trend or development that would lead, in the absence of defensive marketing action, to deterioration in sales or profit.

Once management has identified the major threats and opportunities facing a specific business unit; it can characterize that business’s overall attractiveness. Four outcomes are possible:

  • An ideal business is high in major opportunities and low in major threats
  • A speculative business is high in both major opportunities and threats.
  • A mature business is low in major opportunities and low threats.
  • A troubled business is low in opportunities and high threats.