It may not win the popularity contest...
SWOT: Strengths; Weaknesses; Opportunities & Threats Analysis
vs.
SWAG: Spontaneous Wild @ss Guess!
BUT
Which is preferred....? SWOT definitely
Which is more popular....? SWAG most definitely !
First of all, please forgive me for attempting to "disguise" the word we all know is there....but I laughed out loud when I watched the Oxford Learning Labs video on SWOT Analysis. Their definition of SWAG really got my funny bone, as this is certainly a popular approach to business in the spa industry (we put our twist on this title, but it's all the same in the end).
But no matter which of the two is more popular, today we're going to talk about SWOT...but do watch for SWAG coming to Leslie's SPA Blog soon!
So why do a SWOT analysis you ask?
You need to gauge where you stand in the marketplace ongoing, so you can develop a creative, rolling marketing plan. It allows you to see yourself and your challenges clearly and analyse your prospects.
A SWOT Analysis determines what you need to exploit, or counteract
The first step is to segment the four SWOT categories: strengths, weaknesses, opportunities and threats; and populate each of them with information about your business that you know to be true.
*Strengths and Weaknesses are considered internal influencers and are mostly controllable by you, arising from such things as management and staff quality, location, profit margins and operational framework.
*Opportunities and Threats are considered external influencers and are mostly out of your control.
A hypothetical SWOT analysis of a day spa reveals:
Strengths: Capitalize on these
1. Strong symbol (logo) recognition
2. Well educated management team
3. Experienced staff
4. Convenient central location
5. Great atmosphere & peaceful environment
6. Carry a wide variety of top tier organic products
7. Offer high quality services
8. Recognized in the community
9. Environmentally friendly.
Weaknesses: Eliminate or convert to Strengths and Opportunities
1. No unique selling proposition
2. Not enough touch points leading to the sale
3. Poor online presence
4. Prices are at the high end only
5. Low to no profitability
6. Low staff morale and lack of training
7. Low operational efficiency
8. Ineffective marketing initiatives
9. Poor prospecting; poor follow up.
Opportunities: Invest in these positives
1. A major competitor has gone out of business
2. New generational markets are opening up
3. Ripe affluent market still untapped
4. Current trends say incentive programs are fostering client loyalty
5. Located in a neighborhood full of “like” businesses
6. Online business resources & training programs abound
7. Demands are moving to “white list” product ingredients
8. Increased levels of stress requires more wellness environments
9. A preventative mindset has become the focus.
Threats: These negatives need “work-arounds” and “work-withs”
1. Technology
2. Globalization
3. Competition
4. Economy
5. Shrinking staff talent
6. High payroll
7. High client demands
8. Price sensitivity
9. Client time constraints.
Your next step will be to lay a plan to exploit the positives and counteract the negatives in each of the 4 SWOT categories.
Develop your plan:
Capitalize on Strengths & Convert to Opportunities
1. You have strong symbol (logo)recognition (strength #1) so begin using it more heavily in new generational marketing initiatives; ripe affluent markets; and in your neighbourhood of “like” businesses (opportunities #2,3 &5) in order to lead more clients to the sale;
2. You have experienced staff (strength #3) who can spearhead online training programs (opportunity #6) to help boost low staff morale (weakness #6);
3. You are recognized in the community as having a great atmosphere with a peaceful environment (strength #5), so focus market your spa as the best wellness environment to reduce stress and learn preventative self-care measures (opportunities #8&9).
Convert Weaknesses to Strengths & Opportunities
1. You have no unique selling proposition to endorse your brand (weakness #1), but you know people are searching for “white list” products and ingredients (opportunity #7), which are the exclusive ingredients in the products you already carry (strength #6);
2. You have low to no profitability (weakness #5), but you are selling products and services that are high quality (strengths #6&7). Research (opportunity #6) how to re-position your top tier product and service margins for profit;
3. Your prices are at the high end only (weakness #4), but you know you have that untapped affluent market who will pay higher prices (opportunity #3).
Strengths vs. Threats
1. Your central location (strength #4) could be maximized to provide even more conveniences such as speed shopping and micro services to clients in the neighborhood with time constraints (threat #9);
2. You are recognized in the community and are environmentally friendly (strengths # 8&9), so you will position yourself aggressively above your competition (threat #3) to dominate these 2 specific areas;
3. Allow your experienced staff (strength #3) to research and implement some of the newer technologies (threat #1) and treatments that are surfacing, to shore up your lost ground and position you as more current.
Opportunities vs. Threats
1. A competitor has gone out of business (opportunity #1), so make sure you touch market more aggressively than your competitors (threat #3) to this abandoned list of clients;
2. Those untapped affluents and new generational markets (opportunities #2&3) should be fostered now, while the economy (threat #4) slowly continues to recover;
3. With your neighborhood of “like” businesses (opportunity #5), cross promote & match your hours of business; develop programs; and offer package deals to price sensitive, time pressed clients(threats #9&10).
We’ll stop here, but this list is certainly not exhaustive!. You are now beginning to see that the premise of a SWOT analysis is to develop your strengths and opportunities; and offset the negative effects of your weaknesses and threats. This analysis will provide results that are worth the investment in time. Once you put the right structure in place, patterns will emerge and rewards will appear. Good luck and prosper!