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SWOT Analysis - A Sacred Grid

SWOT stands for Strengths, Weaknesses, Opportunities and Threats. It is probably one of the easiest available frameworks that help an organization devise its marketing strategy. It also acts as a mirror, helping the company reflect upon what they’re good at and what they need to improve.


We believe that marketing becomes extra fun when we can learn it through examples. Let’s take the example of Colgate to learn SWOT.

Before we begin, we would like to remind you that “Strengths and Weaknesses” are aspects related to the product/brand which can be controlled internally. “Opportunities and Threats” are aspects of the external environment that are not in the brand’s control.


Strengths


As the title suggests, strengths are what you are good at. It tells you what resources you have to make your goals a reality.

For our example, we can think of the following as some strengths of Colgate as a brand:

  • High brand recall – a name familiar in almost every Indian household, it enjoys high brand recall

  • Efficient distribution – Colgate can efficiently target both rural and urban households through its distribution network

  • Strong brand presence – particularly in dental care with products like toothbrushes, mouthwash, mouth freshener etc.

  • Good financial position – The brand operates in over 200 countries and has built a good financial position through its operations

Weaknesses


These are the attributes or factors associated with the brand that you can improve. Some of the weaknesses of Colgate can be:

  • Product commoditization – the household product image that the brand built for itself has made the product a sort of commodity among consumers

  • Focused product line – Colgate’s reputation of being a dental care brand makes it difficult for them to enter other product categories

  • High employee attrition rates – an internal issue that can indirectly impact the brand image

  • Low product differentiation – as brands compete aggressively for market share, it becomes difficult to differentiate products from the competition


Opportunities

The brand can identify and tap opportunities that are present in the market to achieve its strategic objectives.

  • Consumer consciousness – Consumers today are conscious about the products they use and this allows the brand to innovate and better its products

  • Expand product portfolio – leveraging on their high brand recall and presence, the brand should expand to other product segments using the right strategies

  • Tapping the rural market – the brand could target the unsaturated rural markets to expand its consumer base

  • Mergers & Acquisitions – the brand can continue to acquire smaller companies to sustain and grow its market share

Threats


Colgate needs to be wary of threats that are visible in the market to safeguard their brand against them.

  • Increased competition – The market for dental care has become saturated with multiple similar products

  • Lower switching costs – Consumers can easily switch brands as they have more choices with low switching costs

  • Lower margins – aggressive competition pushes the brands to cut prices while bearing high raw material costs

  • Lesser scope for innovation – the scope for innovation narrows down as brands compete with aggression with new products

We hope the example helped to gain an understanding of how a SWOT analysis is done. You can also do the same for brands, products or even people.


Happy Marketing!


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