Strategic Sales Management

Starting from the 80 of the last century, SWOT analysis has been actively and successfully used as one of the most important management tools, and over all these years the technique has not lost its relevance. SWOT analysis is a technique that allows you to analyze internal resources and the external environment, assess risks, as well as current and future competitiveness of a product or service.

I see the goal

A group of goods or an entire company, a project or a country, or even an individual person can also equally act as objects of swat analysis. Swot analysis is also practiced for ... competitors, which allows you to be prepared in advance for their tactical and strategic actions.

Based on the SWOT analysis, it is possible to create a competitive advantage of the product, develop an action plan for the development of the company, the growth of its sales and profits. Swot analysis is the first step towards developing a successful development strategy.

It is usually recommended to conduct a Swat analysis at least 1 once a year, this allows you to reduce the number of risks during the formation of budgets and strategic planning.

How do you decipher this acronym and what does it mean? Strengths = strengths, or more precisely, the advantages of your product or company as a whole. Weaknesses = weaknesses, or more precisely, shortcomings. Opportunities = opportunities. Threats = threats. That's why in Russia it's sometimes called SWOT analysis (strengths, weaknesses, opportunities, threats).

Let's talk more about each of these concepts.

The essence of the swat analysis is that you need to determine and evaluate all the pros and cons of a product (company, person, country) from the point of view of its internal environment (what it is) and from the point of view of the external environment, its environment. Strengths and weaknesses in swat analysis are what we can control, these are factors of the internal environment, and threats and opportunities are factors of the external environment, that is, that which we cannot control. But we are in a position to operate with these opportunities and avoid threats with minimal losses.

A product or service's strengths are where you excel over your competitors, where your product is more stable, and where you have clear advantages. Clearly, strengths are responsible for increased sales, profit growth, and market share, etc. The goal is to reinforce these strengths and actively leverage them in customer communications. Examples include: high product quality, company recognition, innovative technologies, low cost, a close-knit, experienced, and motivated team, customer satisfaction, high-quality equipment, a wide product range, fast order processing, extensive distribution channels, etc.

Weaknesses are the shortcomings of a product or service. They're the areas where you perform worse than your competitors, such as why people aren't buying your product or why people are buying it less. Consequently, these weaknesses are what hold you back, impacting losses not only today but also in the long term. The goal is to continually identify areas where the company or product is weaker and develop and implement programs that leverage the company's strengths to minimize risks.

Examples: lack of working capital, poor reputation, narrow product line, weak distribution, lack of strategy, low employee motivation or competence, lack of after-sales service, etc.

Opportunities are favorable factors in the external environment—those opportunities presented to you from the outside that allow you to increase sales and profits. The goal : analyze the market, develop, and implement plans to take advantage of all opportunities.

Examples: new technologies, developing a unique selling proposition, increasing advertising to the target audience, capturing related segments, demand trends = new fashions, needs, new types of products, government support, public relations, etc.

Threats are negative environmental factors, i.e., what the outside world threatens you with, what could reduce sales and decrease company profits. The goal is to assess threats and, where possible, take them into account in strategic planning, as well as in terms of the likelihood of their occurrence in the near future. Develop practical solutions to minimize them.

Examples: new market players, fake products, new legislation, lobbying by competitors, seasonal downturns, economic crises, etc.

We collect and sort information

To begin, create a table in which all factors are entered. ( The table is a rectangle divided into four boxes, and it is advisable to list the factors in order of priority: from least important to most influential.) First of all, formulate what exactly you want to analyze. The object of analysis must be specific (market, product, service, company, store). If you start to embrace too much, the analysis will simply lose its meaning. It is necessary to collect information in the cells of your SWOT table as objectively as possible, which will only benefit further planning. It is advisable to involve outside experts in narrow fields, as well as people interested in decision-making. Remember that the same point can be both a strength and a weakness. Choose what is most important in it. And another important point: more specifics! Avoid vague formulations and downplaying internal weaknesses. Don't write that employees are highly motivated. It is better to say that the salespeople receive weekly bonuses based on sales results, which means they are highly motivated. Or, for example, underestimating the motivation or loyalty of your staff, as well as the quality of the stitching in your shoes, can have a fatal impact on the development prospects of your business.

Step one . Based on an analysis of internal factors , identify the strengths and weaknesses of the product (service, company, project, etc.). Evaluate the following parameters in terms of their advantages and disadvantages:

* packaging and appearance of the goods

* product properties

* brand image, its reputation

* customer loyalty to the brand

* price * breadth of assortment

* cost price

* technologies

* distribution

* representation (calculation)

* promotion

* development investment

* company flexibility, flexibility

* staff.

You can also create your own list of parameters by adding the necessary and removing unnecessary ones (for example, the location of the office or store, the ability to choose ...)

Step two . Based on an analysis of external factors, threats and opportunities are identified. Assess using the following parameters:

* New markets and entry barriers

* access to CA and change in its behavior, habits, quantity

* product update technology

* a variety of advertising methods

* state of the economy

* leaving / appearance of large players, competitors

* change of law

* cost-price ratio.

Add specifics: for example, opportunities - expanding the geography of sales, threats - the transition of the target audience to a cheaper product.

Step three. Review all the points in the table, remove any unnecessary ones, and retain only the most important ones. Be more specific and eliminate repetitions. For example, if you've included factors in your Strengths that don't impact profits or the customer experience, or that don't differentiate you from competitors, they're redundant.

Based on the SWOT matrix, conclusions are drawn about the necessary actions, indicating priorities and deadlines.

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How swot matrix works

Actions SO = Growth Strategies

The main challenge is to determine how to maximize the strengths of the product when each opportunity arises. Otherwise, how to throw all the available internal advantages of the product for the implementation of the emerging opportunities from the outside.

WO Actions = Security Strategies

The main task is to determine which of the weaknesses to overcome (and how) to maximize the opportunity presented. Simply put - to protect an opportunity that has arisen in the external environment from the influence of internal shortcomings (product or company)

Actions ST = Security Strategies

The main task is to determine what benefits and how can help in the fight against threats, in minimizing risks. Otherwise, use the strengths of the product in the fight against threats from the outside.

WT Actions = Security Strategies

The main task is to determine which internal weaknesses of the product can increase the threat from the outside. Calculate how to reduce the deficiency to reduce the risk of the threat.

A good example

Let's consider the swat analysis on the example of the retail network of LLC "BASHMACHOK"

Strengths

- Relations with direct suppliers / manufacturers of shoe products

- A famous actor buys shoes in our store

- We sell shoes only from natural materials

- We have a well-established logistics

- we have high competencies and extensive experience in the shoe market

Weak sides

- we have limited our own financial resources

- we have a lot of obsolete shoes

- we are forced to rent office, retail and warehouse facilities

- we have complaints from customers about the quality of service

- we are limited in potential buyers - residents of the sleeping area where our store is located

Capabilities

- we will be represented at the exhibition fair with free advertising on TV

- our director runs for deputies

- economists predict the growth of the shoe market

- a familiar journalist regularly places our store in his reviews of retail outlets in a magazine popular with our CA

- our customer wrote a positive review about us on the Internet

Threatening

- dynamic opening of competitors of new retail outlets in our area

- Delay in deliveries by our main supplier due to the fact that he does not receive arch support for his products from abroad

- unexpected inspections of tax and other inspection organizations

- shortage of retail space of the required size

- lingering warm autumn - no need for warm winter shoes with fur

Data analysis:

SO Actions. How can we maximize our advantages to capitalize on this opportunity? For example, we could arrange for an actor to visit our store while we're working at a trade show. This way, the TV crews won't cut out footage of our store from their report. And the actor will also appreciate and benefit from the extra screen time.

WO Actions. How to protect opportunities from shortcomings? Thanks to customer reviews and journalistic feedback, we can attract new clients. Our goal is to ensure excellent service, which means we need to focus on training and motivating our staff.

ST's actions. What strengths can we leverage to combat threats? Redistribute procurement volumes among suppliers and expand our range of suppliers to reduce our dependence on the main one.

W-T actions. We minimize flaws to reduce the risk of a threat. Against the background of a shortage of retail space of the required size and our forced lease of premises with very limited resources, we unite with other tenants, looking for space in unusual premises, for example, entertainment centers, where a discount can be promised to everyone who buys tickets for entertainment (cinema, etc.) ...