Chapter 9 Targeting a Market 159 Copyright Goodheart-Willcox Co., Inc. SWOT Analysis As you will recall, a SWOT analysis lists s company strengths, weaknesses, opportunities, and threats faced by the business. • Strengths are internal factors that give a s company a competitive advantage. • Weaknesses are internal factors that place a s company at a disadvantage relative to competitors. • Opportunities are external factors that provide s chances for a company to increase profits. • Threats are external factors, such as the s economy, that can potentially jeopardize a company’s growth or ability to make profits. A SWOT analysis helps determine marketing and product development strategies. An example of a SWOT analysis is shown in Figure 9-4. Environmental Scan Recall that an environmental scan is an analysis of the external factors that affect the success of business. A PEST analysis is a type of s environmental scan that evaluates the political, economic, social, and technological factors that may impact the success of a business. • Political factors affect the stability of the s government and the success of the businesses that operate within it. • Economic factors affect the ability of s consumers to purchase products, as well as the cost of doing business. • Social factors are the cultural aspects within s a business environment and the personal qualities of its customers, such as age, gender, income, ethnicity, education level, occupation, marital status, and family size. • Technological factors affect the ease with s which a business can operate within a market or region, as well as the level of productivity possible once the business is in operation. Conducting a PEST analysis helps identify potential opportunities and threats to a company’s business plans and strategies. An example of a PEST analysis is shown in Figure 9-5. SWOT Analysis Strengths Weaknesses Opportunities Threats • Well-known designers • Competitive pricing • Monogramming option • Free shipping to conti- nental United States • Designers do not offer XS or XXL • Cannot take special orders • Lacking promotional plan • Current inventory is limited • Find designers offering XS and XXL • Take special orders • Partner with local organiza- tions for increased brand presence • Expand product line to offer more customization options • Continued growth of on- line retail clothing stores • Rumored that Company A will also go into lower-priced market • Designer knockoffs sold by Companies B and C are priced competitively Goodheart-Willcox Publisher Figure 9-4 A SWOT analysis lists company strengths, weaknesses, opportunities, and threats faced by the business. PEST Analysis Political Economic Social Technological • Local, state, and national governments currently stable • Country not engaged in military conflict • Presidential election coming up • Value of US dollar is rising • International suppliers are raising prices in response to US dollar rising • Unemployment is down, meaning target customer has more discretionary money to spend • Casual clothing styles are currently trendy • Fashion trends have changed, making a new set of colors popular for clothing • Holiday shopping season is a few months away • New website design is needed • E-commerce interface is slow and needs updating • International suppliers often report delays due to machines needing repair Goodheart-Willcox Publisher Figure 9-5 A PEST analysis is a type of environmental scan that evaluates the political, economic, social, and technological factors that may impact the success of a business.