SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis is a prime condition for a successful strategic business and marketing planning.
SWOT analysis could be done in two stages as follows:
External Environmental Analysis
This stage of analysis involves demographic, economic, technological and socio-cultural factors that could affect the business profitability. This stage of analysis also take into consideration the customers, competitors, distributors, suppliers and other related factors that also affect the business goals and profitability significantly. That means the external environmental analysis concerns about the opportunity and threats of the different external factors as mentioned here.
Internal Environmental Analysis
This stage of analysis comprises the different aspects of marketing operations like market share, customer satisfaction, product brands and product quality, pricing system, marketing channels, sales promotion, market size and coverage, etc. This type of analysis also include factors like finance, manufacturing condition, organizational and staffing conditions and the like. That means the internal environmental analysis will deal with the strengths and weaknesses of the internal environment of the company based on different factors as stated here.
Strategic business planning
Effective strategic business planning including formulation of goals and objectives follows the effective SWOT analysis-the external environmental analysis and the internal environmental analysis.
The above descriptions indicates that the SWOT analysis is a sine qua non for any successful strategic business and marketing planning. This suggests that the SWOT analysis should be done by the competent and skilled people in order to get maximum benefit out of it.