SWOT and PEST analysis
How to identify your business' strengths and weaknesses using SWOT and PEST analyses to examine your business and the external environment.
An honest and rigorous SWOT analysis - looking at your strengths, weaknesses, opportunities and threats - is a good starting point for your marketing strategy document.
Strengths could include:
- good customer service
- special product features or benefits
- specialist knowledge or skills
Weaknesses could include:
- poor cashflow or a lack of capital
- lack of an established reputation
- inefficient accounting systems
Opportunities could include:
- increased demand
- using the Internet to reach new markets
- new technologies that allow you to improve product quality
Threats could include:
- new competitors
- more attractive or cheaper versions of your product or service
- new legislation increasing your costs
- a downturn in the economy, reducing overall demand
See a SWOT analysis example. Having done your analysis, you can then measure the potential effects each element may have on your marketing strategy.
Business environment
Understanding the environment your business operates in is a key part of market planning, and allows you to identify the threats and opportunities associated with your area of business. A 'PEST' analysis helps you identify the main opportunities and threats in your market:
- political and legal changes - such as new regulations
- economic factors - such as interest rates, exchange rates and consumer confidence
- social factors - such as changing attitudes and lifestyles, and the ageing population
- technological factors - such as new materials and growing use of the internet