SWOT Analysis And Why Are They Important

What is SWOT analysis and why it should be one of the first things to master for every novice marketer?

SWOT analysis is part of the micro marketing environment. This allows every marketer to pinpoint out the most important qualities, advantages and disadvantages of a company. Knowing these factors, from then on, problems can be fixed and new opportunities can be developed for a greater future.

When a company has an objective to fallow and a mission to accomplish, SWOT analysis comes in as very handy and helpful tool for achieving these goals. A general rule in life is that when you write something down, you are making things visual and measurable.

So what is a SWOT analysis? The abbreviation stands for

  • Strengths
  • Weaknesses
  • Opportunities
  • Threats

Establishing these factors in a company’s marketing environment is of extreme importance because it makes its mission clear and visual.

swot infographic


These are the qualities that a company is best at. When a marketer is sure of what exactly the strengths in his organisation are, they can be pointed out as an advantage to their competitors. The strengths can be put as the main focus for the organisation’s action plan.

Let’s take Nokia for example. This is a company many of us know as the brick wall braking mobile phone producer. But a few will now they were involved in numerous productions. In the 1920’s Nokia was making tires for cars and bicycles, rubber boots, cables, capacitors plastics, chemicals and even personal computers. When the world-famous Nokia 3310 was released in 2000, it quickly became the main strength that Nokia had at the time. The focus was quickly turned in to the production of the mobile phone and they were more than successful worldwide.

SWOT analysis needs to be made on a regular basis, because of the fast-changing marketing scene. Nokia’s success was enormous in the mobile phone world, but the emerging of the next generation smartphones left Nokia in the dust. The Fins were never going to be a match for the likes of Apple and Samsung. Even a partnership with Windows could not get Nokia with the times. Their strengths became their weaknesses.


Weaknesses need to be identified, so the company would know where they lack competitiveness. Pinpointing the disadvantages would help an organisation identifying their weak spots. Doing this, a plan on how to tackle the problem can be established. Before creating an action plan the company must decide, should the plan be on working and fixing these weaknesses or should they decide to take the company into a new direction?

In Nokia’s mobile phones case, for example, Microsoft decided to “sell the company’s entry-level feature phone assets” to another company. Well, this is one way to deal with your problems. Especially when you have established what the problem exactly is.

Sometimes the weaknesses in an organisation might not be as obvious as Microsoft’s problems with Nokia. It is important though that a company is aware of its weaknesses before it is too late. Knowing the weaknesses of a firm might even lead to ideas for new opportunities.


Knowing the strengths and weaknesses gives an organisation a clearer perspective of what opportunities might lie ahead. Researching and knowing your market environment will help that venture as well. Today trends and customers’ minds are changing extremely fast and new opportunities are emerging continuously.

Doing the right research and pinpointing all the opportunities that are possible will help the marketer to choose the right one. Making it clearer on which opportunity should be developed and why.

Microsoft tried to bring Nokia back on the mobile phones market map, but unfortunately for them and us too, did not do a good job. So what are the opportunities? The one they have decided to go with was, to sell while they still can. I am sure more opportunities were considered, but sometimes you need to know when to give up. Microsoft had to give up because the threats were too big and too many.


Threats are the factors threatening the company. More often these factors are out of an organisation’s reach. Factors that are not dependant from the firm itself. More often they concern economic and political environments as well as a threat coming from competitors.

Analysing these threats and being aware of them, helps organisations to find a way of dealing with them. It is important because new threats are emerging almost constantly. In the worldwide market, laws and rules are changing constantly. Political scenes are also unstable and can be a threat. In an open market, there is always the threat of newcomers. The development of the existing competition is also constant. That is why any firm should be on top of their surroundings and the threats that might come out of it.

Microsoft saw a threat in the new technologies world when iOS and Android were moving so fast. The decision was to acquire a once leader in the mobile market brand. We can all see how Microsoft and Nokia merge looked like the perfect match for another major player in the smartphone scene. That quickly turned in to a threat itself, because it was damaging both brand names. As we know now, the action was taken to eliminate that threat too.

In conclusion, SWOT analysis is important, because they make a company’s mission clear. Some strengths, weaknesses, opportunities and threats are obvious to the management, but a lot are not. Pinpointing every possible factor or situation and putting down in a document calls for action. SWOT analysis clarifies the company mission and market environment!

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