Page 67 - Foundations of Marketing

34 Part 1 | Strategic Marketing and Its Environment

claim. This model is also very compact and lightweight, making for easy maneuvering and
storage, an important selling point for some consumers. These factors combine to give Dyson
a competitive advantage.
A SWOT analysis can be helpful for gauging a firm’s capabilities and resources relative to
the industry. It can provide a firm with insights into such factors as timing market entry into a
new geographic region or product category.

SWOT Analysis
The SWOT analysis is used to assess an organization’s strengths, weaknesses, opportunities,
and threats. It is depicted as a four-cell matrix, as in Figure 2.4 , and shows how marketers
must seek to convert weaknesses into strengths, threats into opportunities, and match inter-
nal strengths with external opportunities to develop competitive advantages. Strengths and
weaknesses are internal factors that can influence an organization’s ability to satisfy target
markets. Strengths refer to competitive advantages, or core competencies, that give the com-
pany an advantage over other firms in meeting the needs of its target markets. Weaknesses
are limitations a company faces in developing or implementing a marketing strategy. For
example, Best Buy’s sales and cash flow began to dwindle after relying too heavily for too
long on sales of computers and entertainment. Marketing research revealed that the company
was focusing marketing activities on the wrong products and the wrong target market, as its
sales had shifted to tablets and e-readers. This necessitated a revamped marketing strategy
11
and a reassessment of the company’s best target market. Marketers must keep in mind that
strengths and weaknesses are only meaningful when they help or hinder the company in meet-
ing customer needs and desires.
Opportunities and threats affect all organizations within an industry, market, or geographic
region because they exist outside of and independently of the company. Opportunities refer
to favorable conditions in the environment that could produce rewards for the organization if
SWOT analysis Assessment
of an organization’s strengths, acted upon. Opportunities are situations that exist but must be exploited for the company to
weaknesses, opportunities, and benefit from them. Threats, on the other hand, refer to barriers that could prevent the company
threats from reaching its objectives. Opportunities and threats can stem from many sources within

Figure 2.4 The Four-Cell SWOT Matrix

CONVER T

Strength Weakness

M
A
T
C
H

Opportunity Threat

CONVER T

From Pride/Ferrell, Marketing 2014, 17E. © 2014 Cengage Learning.

Copyright 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.