It's difficult to develop effective strategy for any business without understanding the business’s strengths and weaknesses in relation to the market.
This helps a business identify which marketing and sales channels to invest in, how to craft messaging, how to invest and hire, and how to plan for long term success.
One tool that simplifies this is the SWOT analysis.
This analysis is a simple and yet powerful tool that helps businesses and organizations to assess their internal and external environment, helping them to identify potential risks and opportunities.
What is a SWOT analysis?
Common mistakes in conducting a SWOT analysis
Being too vague: Listing broad or generic factors like “good customer service” as a strength without specific evidence or context can limit its usefulness. Use data-driven insights whenever possible.
Focusing only on the present: SWOT should assess both current conditions and future possibilities. Failing to anticipate external trends or threats may lead to outdated strategies.
Skipping stakeholder input: Leaving out perspectives from diverse stakeholders, such as employees, customers, or partners, can result in an incomplete analysis.
Neglecting external factors: Overemphasizing internal strengths and weaknesses while ignoring external opportunities and threats can lead to missed growth potential or unpreparedness for challenges.
Overloading the matrix: Including too many points in each category can dilute focus and make prioritization difficult. Keep entries concise and impactful.
By addressing these common mistakes, your SWOT analysis will be more precise, balanced, and effective.
How to create a sales SWOT analysis
Sales SWOT Analysis
Strengths
- Thought leadership within the sales team
- Core product differentiation and innovation
Weaknesses
- Low budget
- Poor brand recognition compared to competitors
Opportunities
- Build system to enable sales reps to build LinkedIn thought leadership AI & training
- Emphasize AI features in outreach emails and incorporate into demo
Threats
- Economic decline causing tightening budgets and slower cycles
- Competitors could copy unique features
Here is an overview of a sales SWOT analysis, broken down step-by-step, outlining the strengths, weaknesses, opportunities, and threats of the organization.
What are strengths?
Strengths refer to the internal positive attributes of a company that give it an advantage over competitors.
These can be tangible or intangible, ranging from unique product features to an experienced sales team or a widely recognized brand.
Strengths are the foundation upon which a company builds its value proposition and competitive edge, shaping its ability to meet customer needs and achieve sales goals. Often, identifying and leaning into unique strengths is a more impactful activity than trying to shore up weaknesses.
How to identify strengths
To identify their strengths, brands need to take a thorough, introspective look at their operations and compare that with their competition and the market as a whole.
The first step is to review their past performance data and key performance indicators (KPIs). This could include sales growth rate, customer retention rates, or sales closing ratios. High performance in any of these areas could indicate a strength.
This could also include non-sales metrics, such as brand awareness or brand recognition within a given industry.
Additionally, brands should solicit feedback from both employees and customers.
Employees, especially those on the front lines of sales and customer service, can provide invaluable insights into what the brand does well.
Customer feedback, on the other hand, can help identify what sets the brand apart in the eyes of the market. Surveys, focus groups, user testing and UX research, and customer interviews can all be effective tools for gathering this information.
Examples of strengths
Some examples of strengths that sales teams might uncover include:
A dedicated, skilled, and highly motivated sales team that consistently meets or exceeds targets.
An established brand with a strong reputation and high customer loyalty.
A unique or superior product offering that meets customer needs better than competitors.
Strong relationships with key stakeholders, such as suppliers or distribution partners, which ensure a reliable supply chain and efficient distribution.
Advanced technological capabilities, such as a robust CRM system, that enhance sales efficiency and customer service.
What are weaknesses?
Weaknesses refer to the internal factors that put a company at a disadvantage compared to competitors.
These could range from lack of expertise, poor infrastructure, or inefficient processes. They are areas where the company fails to excel and which could potentially hinder the achievement of its sales objectives.
How to identify weaknesses
Uncovering weaknesses requires candid self-evaluation.
Brands can begin by critically examining areas where they consistently underperform.
Analyzing sales data, such as lower conversion rates, poor product adoption or declining customer segments, decreasing customer retention, or falling short of sales targets, could indicate potential weaknesses.
This data-driven approach gives an objective perspective on where improvements are needed.
Seeking external perspectives can be revealing as well.
Customers and partners often have a clear view of a brand's shortcomings.
Regularly collecting and analyzing customer feedback, and maintaining open dialogues with business partners, can yield interesting insights.
Companies should be open to criticism, using it constructively to drive improvement. Software review sites, forums, and social media are all passive ways to collect this data. Independent research firms can also monitor and showcase this data for a given market.
Examples of weaknesses
Some examples of weaknesses that sales teams might uncover are:
Insufficient knowledge or expertise in the sales team, resulting in poor sales performance.
Limited resources or budget, hindering marketing or product development efforts.
Outdated technology, causing inefficiencies in the sales process.
Poor internal communication, leading to coordination issues and missed opportunities.
A weak brand image, making it difficult to attract and retain customers.
What are opportunities?
Opportunities represent external factors that a company could potentially leverage to its advantage.
These might include market trends, technological advancements, regulatory shifts, or changes in consumer behavior.
Opportunities provide a path for growth and enhancement, which, if seized upon, could significantly boost the company's sales performance.
Typically, opportunities spring from the company’s strengths as well as external trends and openings.
How to identify opportunities
Identifying opportunities often starts with market research, including industry trends, emerging technologies, and shifts in customer behavior.
Sales leaders can use market research firms, industry reports, and news outlets to gather this information. Being aware of the market landscape enables companies to spot new opportunities that align with their strengths.
Brands should also engage with their customers and partners, gathering their perspectives on emerging needs or changes in the industry.
This could involve social listening, surveys, or direct conversations. Regular interaction with different stakeholders can provide unique insights into new potential avenues for growth.
Examples of opportunities
Building on the previously mentioned strengths, some examples of opportunities that sales teams might uncover are:
With a dedicated and skilled sales team, a company might identify an opportunity to expand into new markets where their expertise could provide a competitive edge.
A strong brand reputation and high customer loyalty could open opportunities for upselling or cross-selling, further enhancing revenue streams.
If a company has a unique or superior product offering, it could find opportunities in untapped customer segments who have unmet needs that their product can satisfy.
Strong relationships with stakeholders might present opportunities for strategic partnerships or collaborations to boost market reach.
If a company has advanced technological capabilities, it might identify opportunities to leverage this to improve customer engagement or to pioneer new sales channels, such as e-commerce or mobile commerce.
Definition of Threats
Threats refer to external factors that could harm a company's performance or hinder its growth.
These can be economic conditions, competitive actions, regulatory changes, or even shifts in customer behavior.
Threats pose risks that business leaders need to prepare for and mitigate to ensure sustainability and resilience.
How to Identify Threats
Brands can identify threats by monitoring their competitors and external factors that could influence consumer behavior.
Regularly monitoring the market landscape, industry trends, and competitive actions is vital.
This includes tracking competitor activities, changes in customer preferences, regulatory shifts, and broader economic indicators. Using tools such as competitor analysis, market research, and PESTEL (Political, Economic, Social, Technological, Environmental, Legal) analysis can help in spotting potential threats.
And as always, brands should have a robust feedback mechanism from customers and partners, as they often provide early warnings about potential threats. This could involve maintaining open lines of communication, monitoring social media sentiment, and conducting regular surveys or focus groups.
Examples of Threats
Drawing upon the previously outlined strengths and weaknesses, five examples of threats that sales teams might uncover could be:
If a company has insufficient knowledge or expertise in the sales team, a threat might arise from competitors introducing more skilled sales teams or advanced sales strategies.
Limited resources or budget could pose a threat if competitors escalate their marketing efforts or if market entry costs rise.
Outdated technology might become a threat as competitors who adopt newer technology could provide better customer service or more efficient sales processes.
Poor internal communication could become a threat if it leads to missed opportunities or misunderstandings that harm client relationships.
If a company has a weak brand image, a threat could arise from competitors strengthening their brands or new entrants with more appealing branding.
S.W.O.T analysis examples and use cases
Business planning
Product development
Market analysis
Human resources
Sales strategy
5 Steps to conducting a SWOT analysis
The first step to conducting a SWOT analysis is to ask, “what’s the ideal outcome of this analysis?” Deciding on an objective helps align stakeholders and ensures the research is actually used to inform decisions.
Next, assemble a team of relevant stakeholders. For sales teams, this should include the head of sales and the head of marketing, as well as C-suite leaders such as the CEO and CFO. Depending on the organization, it may be important to include representatives from customer support or product marketing to get additional viewpoints.
Third, collect data through various methods, including customer surveys, behavioral data, market research, customer interviews, and third-party research. This should also include a review of opinions of internal leaders and employees.
After the data has been collected, find patterns among the data and responses and prioritize the key strengths, weaknesses, opportunities and threats into the matrix.
Finally, develop an action plan that aligns with the results of the SWOT analysis.
How to prioritize insights
Creating a SWOT matrix is only the beginning; the real value lies in acting on the insights.
Here’s how to prioritize effectively: Use an Impact vs. Effort matrix: Categorize each item based on its potential impact and the effort required to address it. This helps allocate resources efficiently.
Focus on high-impact areas: Identify the factors with the greatest potential to influence your objectives. For example, a strength that aligns directly with a key opportunity should be prioritized over less relevant strengths.
Link to business goals: Align the most critical factors in your SWOT analysis with your overarching business objectives. This ensures the analysis drives meaningful outcomes.
Look for connections: Pair strengths with opportunities, and link weaknesses to threats. This synthesis can reveal actionable strategies (e.g., using strong customer loyalty to mitigate a new competitor threat).
Prioritization transforms raw data into actionable strategies, ensuring your efforts focus on what truly matters.
When not to use a SWOT analysis
Although SWOT analysis is a versatile tool, there are situations where it may not be the best choice. Understanding its limitations ensures you select the right approach for your needs:
- When you need quantitative data: SWOT is a qualitative tool and may not provide the numerical insights required for financial modeling, ROI analysis, or detailed budgeting.
- For rapid decision-making: The SWOT process requires time for data collection, stakeholder alignment, and thoughtful analysis. It may not be ideal in time-sensitive situations where quick decisions are critical.
- When external expertise is crucial: If your company is entering an unfamiliar market or dealing with complex issues like legal compliance, a SWOT analysis alone may not suffice. Consider consulting external experts or using specialized frameworks.
- For in-depth competitive analysis: While SWOT helps identify broad competitive threats, more nuanced tools like Porter’s Five Forces or competitor benchmarking may offer deeper insights.
- If overused or misapplied: Relying solely on SWOT for every strategic decision can lead to tunnel vision. It should complement, not replace, other analytical tools.
Recognizing when not to use SWOT analysis ensures you apply the right tool for the right situation, maximizing its effectiveness.
Conclusion
A SWOT analysis is a universal planning tool used by everyone from business school students learning how to evaluate companies to marketing and sales executives revamping their paid media or sales strategies.
It’s great to conduct a SWOT analysis regularly and update existing beliefs about the state of the business and the market.
Conducting a SWOT analysis is a simple process, and it can be adapted to different areas of business, such as product development, marketing, human resources, and sales.
Particularly important to sales executives, a SWOT analysis can help define a brand’s competitive position, refine their sales strategy, and make informed business decisions on everything from hiring to partnerships, sales scripts, and more.