SWOT? So What?

 In How-To

If you’re reading this article, chances are you’re preparing to create a marketing plan or map out a major marketing project that’s impacting soon. At least, that’s for whom this article is written. And chances are you’ve also heard about a SWOT analysis – perhaps someone told you needed one, or asked you what yours indicates about your company – but it’s not something you’ve quite put your arms around yet. Not to worry, the SWOT analysis is far from mysterious nor is it complicated. This article will help guide you to creating one.

What is a SWOT analysis?

SWOT is an acronym that stands for Strengths, Weaknesses, Opportunities and Threats. Strengths and weaknesses are internal conditions of your organization. Opportunities and threats are the external conditions affecting your organization. It is almost pointless to write a plan without first taking stock of your organization and researching your market. The SWOT analysis provides you with the quickest, easiest and most efficient means to understand your place in the cannabis market.

Why do you need a SWOT analysis?

Let’s say you’re leading the Resistance against the First Order; or you could be leading the First Order for control of the entire galaxy.  Either way. You can bring all your warships to the big space battle and just hope things go your way, or you can do a little bit of planning. It would be good to know a few things about your military, to play to your strengths and overcome your weaknesses. It would also be good to know those same things about your enemy. Also, it would be good to have an understanding of the battlefield, especially those things beyond your control that you could either use to your advantage or try and avoid. All these circumstances are the data points in a SWOT analysis. Knowing them makes it possible to plan a far more effective attack.

For instance:

Strengths

  • Army of committed soldiers willing to die for their cause
  • Hyperspace-capable fighter craft
  • The Force!
  • We’ve stolen the plans to their base!

Weaknesses

  • Older fighter fleet
  • Only one person knows how to use the Force
  • Best pilot is a loose cannon who only follows orders he agrees with

Opportunities

  • There’s an asteroid field where our ships can hide from their sensors
  • It takes a long time for them to power their big weapon
  • They don’t know we’re coming

Threats

  • Outnumbered 100 to 1
  • They also have a guy who knows how to use the Force, and he’s good at it
  • Their soldiers are slaves, clones and robots and fight to the death just because
  • Their base is protected by a deflector shield

 
Equipped with this information, you are now better able to plan your attack. You know you have a smaller fleet and protecting them is paramount. You know where you need to strike and how much time you’ll have to do it. You know you’ll have to defeat their deflector shield and that you’ll face a lot of enemy fighters. And the Force probably won’t be your salvation this time.

Creating a SWOT analysis for your business requires a pretty deep understanding and critical analysis of your organization. This analysis should be a team effort, with all the operational leaders of your organization pitching in to fill out your chart. The SWOT analysis requires a thorough survey of the market landscape. Very important for cannabis businesses is also understanding the legal and regulatory environment in which we operate. As there is still a lot of confusion and misunderstanding about what regulations – for example, banking – apply to which businesses – for example, a PR agency – even ancillary businesses that never touch the product should be generally aware of the federal, state and local regulations governing the cannabis industry.

Don’t worry if you find yourself identifying lots of weaknesses. That’s vital information to have, and doesn’t mean your company is weak – a weak company is one that doesn’t know or understand its vulnerabilities. Younger startups in particular will have many weaknesses. Knowing what these weaknesses are not only helps strategize ways to work around and through them, it helps plan to fix them in the future.

Here are some of the business aspects you should include in your SWOT analysis.

Your Product or Service:

What are you offering and how many other organizations are offering something similar? If it’s unique, are you protecting your intellectual property through patents, trademarks or copyright? If it isn’t, what makes your version different?

Competition:

How many competitors do you have, either directly or indirectly? Don’t forget, “apathy” – or lack of desire to address a challenge – is also a competitor (but that’s a topic for another article). Are there any companies addressing the same challenge you are and doing so the same way? Or addressing it with the same degree of success? What differentiators work to your advantage, and which ones work better for your competitors?

Human Resources:

Who are the people in your organization and what roles do they fill?  Do you have the right talent for each critical role needed for you company to succeed? Where do you need extra help, possibly from a contractor or outside vendor?

Capitalization:

Do you have enough financial wherewithal to make it through the coming year, or the timeframe of your project? If you’re light on funding, are you producing revenue? And is that revenue enough to sustain you? Do you need to seek new funding, build your revenue or seek a loan?

Supply Chain:

Do you buy anything from vendors that becomes part of your final product or service? Do your competitors buy from these same vendors? How many vendors are there for these component elements, and are you getting the best prices possible? If you are selling a physical good, do you have enough inventory to meet your sales expectations?  How long does it take to resupply your inventory? If you are selling a service, are you staffed appropriately to support it?

Marketing:

How do people find your product or service – is it an easy thing to search for? Do people even know they need it? What do they enter in the search bar to find a product/service like yours? What about your company? Does your brand have “equity” in the marketplace, or do you need to establish your band, increase awareness and earn the market’s trust?

Sales and Distribution:

How do customers get your product/service? Do you need inside sales people or channel partners? How are sales people – inside or partners – equipped? Does everyone who needs sales training have it?

Legal and Regulatory:

Most important for the cannabis market is an understanding of state and local laws and regulations, but also how federal law – and the misperceptions many have about them – impacts your business. For instance, some service providers – ranging from Evite and Google Adwords, to many banks – won’t touch your business if you work in cannabis, even if your business is perfectly legal and completely ancillary to cannabis cultivation and production. There also remains an ever-present “Sword of Damocles” that hangs over cannabis businesses: that some day a service you’ve grown accustomed to is no longer available because you’re associated with marijuana.

There are more aspects of your business to consider. Once you start creating the list, discovering these important business details becomes easier. Then you can decide which are internal conditions and which are external. If something is within your control, that’s internal. If it’s not, it’s usually – but not always – external.  For instance, an employee may have skill set limitations which are beyond your control to fix, but that limitation is still an internal weakness as it’s one of your employees.

Now plot all these items in the four quadrants of your SWOT analysis:

Strengths Weaknesses

 

Unique

Product

Common

Right people for the work required

Employees

Missing some key roles

Have enough money

Capitalization

Don’t yet have enough money

Product sold via ecommerce

Sales and Distribution

Sales requires skilled sales force

 

Opportunities Threats

 

Few Competitors

Competition

Many Competitors

A diversity of vendors keeps prices low

Supply Chain

Only one vendor sells what we need – price high

People know our company brand

Marketing

No one knows our brand yet

Regulation does not interfere with our business

Legal and Regulatory

Regulation complicates our business

 
During the process of building your SWOT analysis, you no doubt will discover aspects of your business which may be new to you. From unknown strengths to hidden threats, uncovering this information will help you move forward.

Now, the strategic planning starts. Using this list helps you better focus strategies on improving your business. With properly identified strengths and weakness, and an awareness of your organization’s opportunities and threats, you can quickly get everyone on your team on the same page and working toward the same business goals. You’ll understand better how to use your internal strengths to seize opportunities and minimize threats, and how to better eliminate weaknesses to avoid threats – which after all is the foundation of a business growth strategy.

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