As you have probably learned by now, marketing is an on-going process of both self- and competitive- analysis. You need to understand who your company is, who your customers are, and who you are competing with – information that can stay fairly constant over time, or suddenly change overnight without warning. Analysis must start from the day you first enter the market, and there is a very effective tool for quickly understanding why you are and what you are up against.
SWOT analysis is a common business tool. It’s an acronym standing for Strengths, Weaknesses, Opportunities, and Threats. In a SWOT analysis, you first look at the company and define your own strengths and weaknesses. Then you look at the market as a whole and define new and emerging opportunities and threats that may exist for your business.
Hermawan Kartajaya claimed that the SWOT analysis is backwards when it comes to marketing. He turned the tool around to force “business executives to look at the marketplace from an ‘outside-in,’ rather than an ‘inside-out,’ perspective.” I cannot agree more. A TOWS analysis helps us first understand the market – who is the competition, who are our customers – before studying ourself.
Targeting the perfect customer mean you are building your business model to serve them, not existing strengths and weaknesses of the company. Looking first at the market and the customer gives us a better lens to use when analyzing ourselves.
You have probably used a SWOT analysis at some point in your career; compare your experience with that tool with the promise of the TOWS analysis. Which do you think is more useful for your business?