Marketing managers seldom start with limitless
resources and a blank sheet of paper. They will have existing
products, existing retailers or distributors, existing location
and a legacy of brand attitudes and previous marketing communications.
They will also have only finite resources with which to exploit
opportunities. This means that a manager must carefully review
internal factors against the external environment and competitor
This review of an organisation’s strengths and weaknesses
should lead to an identification of opportunities and threats.
It is often referred to as a SWOT analysis. This is an acronym
of the headings used:
- Strengths identified within the company;
- Weaknesses identified within the company;
- Opportunities identified when strengths are related to the
- Threats identified when weaknesses are related to the external
Understanding an organisation’s strengths and weaknesses
Brace, Sales & Marketing Manager,
Bournemouth International Airport.
Weaver, Marketing Manager, Bournemouth
A manager needs to review all of the organisation's activities
and make a judgement about their merits relative to the competition
and taking into account the external environment. Where the judgement
of any aspect of the organisation is positive, they would be said
to be a strength; where it is negative, this would be a weakness.
Although many large organisations will support decisions with
sophisticated market and internal data, this is really a creative
exercise involving judgement. Insight into new competitive advantages
may come from attempting to review aspects of the organisation's
operations in new ways. The main areas than might be considered
- sales volume;
- sales growth;
- market share;
- customer base and loyalty (number of active/repeat customers)
- customer attitudes to the brand;
- customers' uses for the brand;
- the organisation's physical resources;
- the organisation's intellectual resources (staff knowledge
and copyrights and patents);
- relationships with suppliers, distributors and retailers.
Understanding an organisation's opportunities and threats
Opportunities and threats follow directed from the assessment
of internal strengths and weaknesses against the external environment
including competitor activity. Opportunities are identified from
an assessment that suggests that an organisation is in a very
strong position relative to competitors in an area with a very
favourable external environment.
Threats are identified from an assessment that suggests that
some aspect of the organisation's activity is very weak compared
to competitors and /or were that activity faces a problematic
The more insightful, detailed and imaginative the analysis of
strengths and weaknesess, the more likely that this will produce
meaningful and exploitable opportunities and the more likely a
organisation is to be able to respond to threats before they become
From these assessments priorities can be identified. Opportunities
and threats can be ordered according to which are likely to have
the biggest impact on the organisation in terms of:
- profit or loss;
- market growth or decline.
Opportunities and threats may also be considered to be short
term (less than a year) or longer term.
Example or PEST and SWOT analysis
Holidays specialise in cheap family holidays in camping and
caravan parks in Great Britain . This has been a market in decline.
In the long term, a more affluent UK population, changing demographics
(smaller families), the growth in cheap European flights, changing
attitudes to holidays (people take more than one a year) and changing
attitudes to the EU (people are more comfortable with European
travel), are reducing the demand for this sort of holiday. However
in the short term recession means that families have less money
to spend, the pound has fallen in value against the Euro (making
European travel more expensive) and international terrorism means
that some people do not want to fly. In addition, young people
are staying at home longer, other than when they are at University.
Young people therefore have more disposable income and a greater
desire for short breaks away from the family home. In the long
term Haven's existing focus on low-cost holidays in the UK may
have been seen as a significant weakness, but in the short term
at least they are in a much stronger position. There are opportunities
to exploit the market for people who do not wish to travel abroad
and to exploit the market for shorter, second holidays. The longer
term threats might be addressed by a focus on shorter breaks and
a change in accommodation types to cater for smaller families
or even for groups of young adults.