If you want to thrive in a competitive marketplace, you have to assess the condition of your business, inside and out. Internally, you have to understand what you’re doing well, and where you could improve. Externally, you have to consider where to take your business next, and predict emerging market challenges you’ll likely face.
Attaining this information may seem like a tall order, especially if you’re a small business owner or work as a marketer for a smaller company, but it doesn’t need to be complicated. To start, all you need is a pen and paper.
In this guide, we’ll explore the SWOT analysis and TOWS analysis. Taken together, these strategies will allow you to evaluate your business, streamline your business planning, and develop a stronger business strategy.
A SWOT analysis is the process of uncovering and examining different aspects of your business, and organizing your discoveries into a simple 2X2 grid template. Each quadrant of the grid corresponds to one letter of the acronym SWOT. The acronym stands for strengths, weaknesses, opportunities, and threats.
Here’s a breakdown of what each word means in the context of a SWOT analysis:
Since the information is presented in an easy-to-read grid, SWOT analyses are quick and straightforward assessments. And Once everything is organized, the condition of your business is easier to assess.
There’s no right or wrong time to do a SWOT analysis. There are, however, times when a SWOT analysis can be particularly useful.
Here are 4 times when it’s a good idea to look inward and outward:
Now that we’ve described what a SWOT analysis is and when you might want to do one, let’s look deeper at the process of creating a SWOT analysis by focusing on each quadrant.
One of the true benefits of a SWOT analysis is that it’s easy to conduct. All you really need is a way to write down ideas and a willingness to look squarely at your business.
While you can conduct a SWOT analysis on your own, it helps to bring other people to the table. Brainstorming with others can help identify things you might have otherwise missed and clarify ideas that aren’t fully formed.
In person, you can use sticky notes or a white board to do your analysis. Remotely, you might consider software like MIRO.
Once you’ve drawn your grid and gathered your team, it’s time to start working through the four quadrants of your SWOT analysis. As you brainstorm, record ideas in the correct quadrant.
The strength quadrant of your SWOT analysis will include things your business or team is doing well. Remember, strengths are internal, so you’ll need to look inward to discover them. It’s also important to hold onto the idea that strengths are things you have control over, so you can build on them later.
The weaknesses quadrant of your analysis will include areas where your business or team needs improvement. Like strengths, the weaknesses section requires you to look inward. And no matter what you uncover, don’t despair! Weaknesses are things you often have control over and can improve.
The opportunities quadrant will include strategies or resources you can currently use as a business. Opportunities are not controllable by you, as they are external to your business. Knowing where the opportunities are, however, allows you to move toward them.
The threats section of your SWOT analysis will include potential issues or challenges you could face as a business. Again, threats are external factors, so they’re things happening outside of your business. They aren’t controllable, but you can actively plan for them.
Here’s an example of what a SWOT analysis template looks like when it’s all filled out.
Now that we’ve covered the basics, let’s look at some SWOT analysis real life examples. We’ll cover 3 areas in business where a SWOT analysis can be helpful:
As we explore each of these areas, we’ll offer examples of tools you can use to sharpen your analysis and derive useful data-driven insights.
In marketing, a SWOT analysis is often a standard part of a strategy review or competitive analysis. It can help you understand where your marketing strategy is strong or weak, and how you can out-market your competitors. You may want to consider things like:
While companies always want to look at their own internal analytics for data on their marketing efforts, Semrush’s . Trends tools can help uncover useful insights about the competition that can complement any SWOT Analysis.
Let’s look at some top vehicle makers to see where we can discover some strengths, weaknesses, opportunities, and threats among them.
To compare data between competitors, we could use Semrush’s Market Explorer tool. The tool offers a Benchmarking report that shows side-by-side comparisons of several metrics. Let’s start with the Market Share by Channel graph.
Based on this graphic, we can see that Ford Motor gets the most traffic overall, and also captures the most traffic from direct search (30.97%), referral (24.56%), and search (27.55%). This indicates that they have good brand recognition, good relationships with other companies who send them traffic, and strong SEO. Jeep beats them when it comes to traffic garnered from social media sites, and Toyota wins when it comes to paid traffic.
With this information, Chevrolet might add marketing across different channels to their SWOT weakness examples. While they aren’t at the bottom of the heap, there’s plenty of room for improvement.
Next, we can look at the Traffic Generation Strategy report to get a sense of where companies are getting their traffic, and where our strengths, weaknesses, opportunities, and threats lie.
Looking at this chart, it’s clear that Chevrolet’s direct traffic is on par with or even slightly higher than most of their competitors. We could mark this as a strength and an opportunity in our marketing SWOT analysis. Direct traffic indicates good brand awareness, as visitors are coming to their site without needing to use Google or being referred in another way. We could also add this brand awareness to our SWOT opportunities examples because a strong brand presence is something we can build upon.
Which brings us to the Market Traffic vs Selected Domain Trends graph, which shows traffic trends over time for your competitors.
If we look at traffic coming through social media for the past six months, some interesting trends emerge. From May through August, there’s been a large downswing in traffic coming from social media across the market, overall.
This could present an opportunity or a threat for our SWOT analysis, depending on the reason for the downswing. In one sense, there might be an opportunity for Chevrolet to make investments in marketing on social media to capture some of the traffic other companies were engaging from March to May.
On the other hand, if less people are using social media, leading to a major downswing in traffic and subsequent sales, that could indicate a market shift that could pose a threat to automakers.
When it comes to Ecommerce, it’s all about products and sales. An Ecommerce SWOT analysis can be especially useful when you’re launching new products or experiencing rapid growth. You may want to consider things like:
Again, Semrush .Trends tools can help you uncover strengths, weaknesses, opportunities, and threats when it comes to Ecommerce. Let’s begin with the Traffic Analytics tool. We can use the Top Pages report to gain insights about competitors’ businesses.
Looking at Ford’s top pages, a trend emerges. Pages that allow customers to customize or “build” their own vehicle receive a massive amount of traffic.
For Chevrolet, who may not have as many customization options, this could present a threat or an opportunity. If they have the capacity to increase customization options for their vehicles, they might move toward that opportunity. If not, they will surely lose online customers who prefer the customization options through Ford’s website.
We can examine the metrics for a specific page on Ford’s website, which can come in handy for tracking newly released products. For example, if Chevrolet was releasing a vehicle similar to Ford’s new Bronco, they’d want to benchmark their data against the metrics of the Bronco landing page.
With this graph, the buzz around the Bronco becomes clear. Of all page visitors, 88% are using search and being directed to the Bronco landing page. If Chevrolet recently released a similar vehicle, and aren’t getting the same level of traffic, they might mark this in their SWOT analysis as an example of a threat.
Finally, we can use the top pages report to get a sense of Ford’s monthly sales numbers and benchmark that against our own. To do this, filter the Top Pages report using the word “confirm”, which will bring the purchase confirmation page metrics into view.
Here, the graph shows Ford’s “/buy/reserve/confirmation.html” page received 41.9K unique page views between May and August. While this number doesn’t necessarily reflect the number of cars sold, it can provide a general sense of the effectiveness of Ford’s sales funnel. We can then benchmark this number against our own to uncover strengths, weaknesses, opportunities, or threats.
Changing market conditions can lead to precarious situations for any businesses. A SWOT analysis focused on your place in the market can help you stay aware of your position and ready for your competitors’ moves. You may want to consider things like:
You could begin by looking at Market Explorer’s Growth Quadrant. Setting the chart to show year over year growth (YOY) can illuminate trends that help you fill out your SWOT chart.
As an established player, Chevrolet might note their stability as a strength in their SWOT analysis. This past year, they only experienced a slight decline in traffic and traffic growth compared to some other companies.
In terms of threats, Honda and Toyota both moved from the Established Players Quadrant toward the Leaders Quadrant. In general, these companies could pose a threat to Chevrolet moving forward.
We can also view the Market Geo Distribution report, which shows the distribution of market traffic by country and changes since the previous month. We switched the chart to reflect top changes to see where the growth is happening internationally.
Depending on Chevrolet’s activity in these countries, they could use this information to confirm strengths, weaknesses, opportunities, or threats. For example, if they are already selling a lot of cars in France, this could indicate a strength because they are engaged in a growing market.
To the contrary, if they hadn’t broken into the French market, but had the means to do so, they might mark this as an opportunity. Either way, seeing the growth in these markets provides useful information for completing the SWOT Analysis.
Once you’ve brainstormed strengths, weaknesses, opportunities, and threats, and written all of your ideas into your 2X2 SWOT template, the question becomes: What do I do with this information?
While SWOT analyses are a great way to understand your business, they don’t necessarily lead to actionable strategies you can use to move forward. This is where a TOWS analysis comes in handy.
As an expansion of the SWOT analysis, a TOWS analysis allows you to see the relationship between internal and external factors, and strategize based on these insights for better business outcomes.
For your TOWS analysis, you’ll need to expand your 2X2 SWOT matrix with four additional boxes, and label them:
By deepening your original SWOT analysis with a TOWS analysis, and looking at the relationships between the quadrants, you’ll discover strategies for moving forward. Below, we’ll use Chevrolet as an example to dig into the TOWS analysis process.
Businesses that thrive are both inward and outward looking. They take time for self-reflection, while also studying their environment. Before you can get where you want to go, you have to understand your position, and The SWOT analysis process provides a clear path for this kind of holistic understanding.
Once you’ve assessed your position, you can employ the TOWS process to figure out how to move forward. By cross referencing the different points found on your SWOT analysis, the TOWS analysis provides insights on powerful strategies for realizing your goals. There are also many other options as well, such as the “pest analysis”, which can illuminate additional insights.
Taken together, these tools provide a powerful process for looking inward, outward, and toward the future.
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