Strategic planning is crucial for the survival and success of any business. It involves specifying the goals of a business as well as the means of achieving those by using resources efficiently. Various tools of strategic planning have been used widely over the decades. These include SWOT analysis, PEST or PESTEL analysis, scenario planning, etc.
A new addition to this list is SWOTT analysis, which is a modern counterpart of SWOT analysis. It was designed keeping in mind the fast and ever-changing landscape of businesses. While SWOTT is similar to SWOT, notice that it has an additional letter which we will discuss in detail.
Let us look at the components of SWOTT analysis.
S– S stands for strength. This refers to a company’s forte which sets it apart from its competitors. A company’s Unique Selling Proposition (USP) is a good indicator of its strength. For example, when Uber started out, it was the only taxi service provider having a route optimization system (Uber’s strength) which ensured customers could reach their destination faster (Uber’s USP).
W– W stands for weakness. This refers to the limitations which prevent a company from achieving its goals and also points out areas in which the company’s competitors may be performing better. These weaknesses may limit employees’ productivity, the business’s profitability, and customer acquisition efforts. For example, Nokia’s resistance to technological innovation was one of its biggest weaknesses which led to its downfall from the top position in the global mobile phone industry.
O– O stands for Opportunities in a business’s external environment which can contribute to its success. For example, when the coronavirus pandemic started in 2020, video-conferencing service provider Zoom grew by 319% , due to the fact that people were compelled to work from home.
T– The first T in SWOTT stands for threats. These are external factors/risks over which the company has no control and which can negatively affect the business. For example, the coronavirus pandemic was a massive threat to the survival of RMG factories in Bangladesh. As early as June 2020, orders worth $3.7 billion were postponed, suspended or canceled, which was a massive blow to businesses. Being aware of potential threats enables businesses to plan ahead to avoid pitfalls.
T– The second T in SWOTT stands for the “trends” of the industry in which a business is operating or plans to operate in the future. Ongoing trends affect business profitability. So it is important to identify present and future trends to cash in on business opportunities or even to scale back on production when trends indicate a decrease in consumer spending.
Trends change over time and have to be re-evaluated at intervals.
An easy way of identifying trends from the comfort of your office/home is using Google Trends. This website scrutinizes the top search queries in Google to show what’s trending in a specified time interval. For example, if an internet service provider in Bangladesh wanted to know when and where in 2022 consumers showed most/least interest in internet packages, they would see the following on Google Trends:
The infographics above show that interest in internet packages was highest in June 2022, in Barisal division, while it was lowest in December 2022, in Khulna division. This can help internet service providers to offer discounts at certain times of the year or to new customers in certain divisions to capture the market share.
Trends may be global or local. For example, working from home became a global trend during covid-19 pandemic. Even though the pandemic has subsided, the after-effects of this trend have persisted, like holding meetings online rather than in person. This was a huge opportunity for tech companies to develop software solutions for remote working.
An example of a local trend may be live videos on social media in which sellers showcase their products to clients. This is especially relevant to sellers of clothing. Conducting live videos on social media is a fast and cost-effective way of reaching and capturing customers. It may be the difference between succeeding in this space and falling out of the race.
Considering the fast-changing trends facing modern day businesses, a SWOTT analysis may be more appropriate than SWOT analysis to make the most of available information and opportunities.
Need guidance on carrying out your business’s SWOTT analysis? Talk to us at Kore Facilitation!