Sales and Marketing 101 – SWOT Analysis

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This short series of articles is related to expats earning a living in the Philippines. I am focusing on sales and marketing, because that is the area of my expertise… It is my trade, and it is where my education focused. I hope to pass on some of that knowledge to readers on this site. Sales, or marketing for that matter, despite what the textbooks might tell you, is not a science, but an art. There are no hard and fast laws or rules, but the influence of marketing is felt throughout the business world. It is my observation that many, if not most, expats who fail in trying to earn a living in the Philippines fail, in part, because they lack an understanding of basic sales and marketing principles. However you decide to earn a living here, you must always remember that without sales, you are not in business.

In graduate school, one of the biggest concepts to learn when developing business plans or sales and marketing plans is the concept of SWOT analysis. It is a mandatory section on every plan, and is as important as defining one’s goals in the business. Why? Quite simply, it forces one to think critically about the business, and how you will succeed, unencumbered by emotion or “feelings” one might have about a business idea or plan.

Entrepreneurs have a habit of falling in love with their ideas. Indeed, having faith in your ability is critical when starting a business. However, business does not run on faith. It MUST have sales. Every successful business in the Philippines started from a simple idea, whether that idea was Philippine Airlines or Mang Inasal, they all started small from one person’s idea. The purpose of SWOT is not to discourage dreams, but rather force the critical thinking necessary to develop a logical, feasible plan that will enable reaching one’s goals.

What is SWOT?

Strengths, Weaknesses, Opportunities, Threats

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Swot Analysis

Swot Analysis

It involves breaking down the plan into manageable sections and addressing the real constraints that you will face. You take the different items you list under each section and determine the costs and the benefits of each action item.

To illustrate, let’s take a common example of starting a commercial piggery in the Philippines. The principles apply to any business, but this example is a start. We begin by breaking out the components of SWOT and asking, with a critical eye, “What are my strengths?”, and so on for each section.

STRENGTHS

  1. I raised pigs previously.
  2. My spouse’s family have raised pigs for many years.
  3. We have a plot of land ready to develop.
  4. The DTI has rural financing projects available for agricultural business.
  5. Quality meat is in demand in the local market.
  6. I can adequately finance an operation on a greater scale than local competitors.
  7. I have a friend in a University who can provide technical knowledge.

WEAKNESSES

  1. I do not know the local buyers for my product (Pig dealers, slaughterhouses, etc.)
  2. I do not have contacts in the food / export market.
  3. We are susceptible to disease.
  4. How will we get our product to market? Where is our market? Manila? Local? Export?
  5. If export, can we meet health and quality standards required? Are we prepared?
  6. There is lots of local, established competition.
  7. We are susceptible to commodities price fluctuations.
  8. The cost of feed, fuel, and medication is rising.

 

OPPORTUNITIES

  1. Raise organically and certify organic.
  2. Sell manure to local rice farmers as fertilizer.
  3. Raise specialized breeds, like Japanese black pork, for export.
  4. Offer “gourmet” cuts of meat (marinated, convenience packaging, etc.).
  5. Make “gourmet” sausages using other ingredients sourced locally (become part of the community)
  6. Hire staff locally and give incentives, such as profit sharing.
  7. Support local charity / government with food donations.
  8. Make soap from offal and waste.
  9. Employ a lechonero and sell locally for parties / special events.
  10. Establish a web site that targets OFWs, selling lechon and pork online for special events (birthdays, weddings, funerals), and delivered locally (entire Philippines), even though they are abroad, away from families.

 

THREATS

  1. Opposition from other farmers may produce political / government problems. Avoid local competition.
  2. Adequate staffing may prove problematic.
  3. Competition will undercut prices / margins, while costs increase.
  4. Local corruption in building facilities.
  5. Complaints about the smell from neighbours.
  6. Difficulty of enforcing sanitation standards for export market.
  7. Lack of business expertise with the family.

 

After you identify all of the different points under each section, you then look at each item and decide how you will address the issue. With strengths, this is usually fairly easy: We all know our strengths. The difficulty arises in truly examining one’s weaknesses and realistically examining the threats. In particular, you need to plan on how you will address and face the threats to your business. So, using the example above:

  1. Avoiding local competition by not selling at the local palengke. Establish your own supply and distribution chain. Make certain that those in power locally support your efforts.
  2. Send staff for additional training. Be flexible with “time off” requests at local harvest times. Pay good wages, with incentives for production.
  3. Avoiding local competition addresses this issue, but larger operations have economies of scale that smaller operations cannot achieve. They cannot undercut you if you are too big.
  4. MUST have someone on site at all times who has a vested interest in having the business succeed.
  5. Maintain sanitation and plan facilities with prevailing winds, etc. in mind.
  6. Insist that inspections are carried out regularly and when required. Insist that sanitation standards are adhered to.
  7. Send family to DTI training or business classes. Do not listen to claims about operating a business.

Now, I’m not a pig farmer. Don’t want to be. There would be dozens of additional items under each heading were that my expertise and business. Yet, this short exercise gives you an example of the type of critical analysis to which I am referring. When you start looking at opportunities, the situation becomes even more complex. For example, in item number 3, where will you get the breeding stock? Can you raise the pigs to the requisite quality level? How will you do that?

This is why this type of planning is so critical in starting a business… Even more so when you are starting from experience that is in a foreign environment and starting in a region like the Philippines, so different and full of constraints.

Yes, it can be done, but you must plan, plan, plan… Execute… Refine… and plan some more.

Post Author: JohnM (207 Posts)

John Miele is a Citizen of the World, having spent time in many locations around the globe. Currently, he finds himself in Manila, but travels throughout the Philippines. John joined the Live in the Philippines Web Magazine in mid-2008.


Comments

  1. says

    Hi Bob Martin this is a very great information and not only in the Philippines but anywhere when you start a business.you need to have all the above you mention SWOT.to make it or to survive anywhere when doing business…..

  2. Ricardo Sumilang says

    If you’re into big business, under threats, you may wish to add the vagaries of the weather as well as political stability.

    • John Miele says

      Ricardo: For a piggery, or agricultural, no doubt. This was intended as a general example, though. Every business type will have its’ own lists under each category.

  3. Scott Fortune says

    John, I always enjoy reading your articles, as they always seem to be intertwined with my own thoughts at the time. It’s a little scary actually. Over the last couple of years in planning our eventual move to the Philippines, I have been thinking of the many possibilities for businesses, as well as simply being self-sufficient in providing for my family, including the possible extended family. One of the things that I have been reading and exploring over this past week has been the possibility of pig farming. Nothing big, and nothing that would cause me to be any kind of major competition to anyone local(a thought of my own), but just a simple process of having a sow, hire a boar for sire, and then sell off half when they can be weened. Keeping the other half for our own family use for parties, etc. Lechon parties seem to be the best parties, so I’d like to have some. Then once I am comfortable with the process, keep a female and move up to two sows. Again, keeping that number of sows until I am comfortable, or decide… two is enough for our purposes. I’ve looked into the issues of smell, and have found some ways that are used to reduce the smell, or even eliminate it to the point that neighbors would be unaware of them. Again, the pig head count would remain low, thus helping the issue. I also read that the biggest problem with pig farms is the fecal matter un-off into water ways. I have seen some methods that turn the waste in fertilizer, and would love to try that too. I don’t expect to get enough to sell, but it would sure be nice to have free fertilizer around the farm. Since I would also like to have a dozen or so mango trees and other fruit trees if financially feasible.

    So many things to look at, and after reading your article, another one. Threat to local markets. Hopefully, keeping my numbers down would eliminate any issues of that.

    Thanks for the article, I am sure it will be well received by more than just me.

    Scott

    • John Miele says

      Scott: Starting small is the way to go, especially until you have been here a while and start knowing your market. That is next week’s article.

    • John Miele says

      David: I would add that most successful entrepreneurs have also failed in previous attempts. As long as you learn from your mistakes…

      Around 15 years ago, a very good friend asked me to help him write a marketing plan for his martial arts related business… Which I did. For his little market niche, a great idea. Once I introduced him to some VC providers, though, who looked at the idea without passion (as they very well should), it very quickly became clear that any business along that line would be a tough slog.

  4. adam scott says

    Good article.
    For me there are two crucial factors in running a business here that many foreigners seem to miss.
    First of all spend as much time on site as you can. Yes it may involve long hours and sometimes boredom but you have to be there.
    Secondly you made a very good point about having somebody on site that has a vested interest in the business especially if you are not around some days.
    At first there may some like that there are a lot of constraints here in doing business but after awhile you will realize there are ways round things and it is actually easier than other countries.

    • John Miele says

      Adam: We learned that from Rebecca’s fish ponds… Difficult, if not impossible, to run from Manila. Wise advice.

  5. says

    Thanks John for the outline on SWOT.. a good critical eye for looking at any business. I’ll pass this on to my son who runs a moving company in CA.

    Scott.. keeping it small sounds like a good idea. My g/f and I started a piggy-farm last September and it’s gone a whole other direction than planned, which is ok. The cost of the corrals, drilling a water-well (which doesn’t work very well it turns out), then paying for piped-in water, installing electricity, adding fencing (to prevent poaching) have been just some of the initial major expenses we ran into.

    Our next problem was actually paying the caretakers ‘too much’. (My g/f has a soft-heart) Next thing we knew they were complaining they spent all their money and wanted more. Money sent for feed was getting spent on themselves. (We fixed that by setting up an account at the feed store and delivering the feed, then paid the feed store directly.) Then my g/f bought a carabou, there are now three of them plus a few goats.

    Add to this the drama that we didn’t foresee.. the husband/wife who lived on the property to manage our animals are in their early 30’s. Three weeks ago the husband goes out to feed the piggies and died of a heart-attack. The next thing we know we’re getting threatening phone calls that it is all our fault and they want a large sum of money for compensation. (WTF???) This, despite the fact that when he was hired he told us he had a heart-defect and needed the easier work of piggies to get away from the sugar-cane fields. My g/f talked to the local barangay Captain and it’s still being sorted out in front of him, but we’re not paying anything other than his outstanding wages, which has been done.

    So.. my point is, yes.. keep it simple because before you know it things get weird.

    • John Miele says

      Henry: Good advice from someone who has done it… Many expats have business ideas, like piggery, often after speaking with family (I know I did). Problem is, that your perspective changes drastically once you are here and facing the reality.

    • adam scott says

      Henry,
      Although legally you dont have to give any extra other than the salary the Barangay captain still might not rule in your favor. My advice to you would be to follow what they say especially if in the future you plan to have some business in that area.
      On a personal note my conscious would have told me to give something towards the family as he was one of my employees. From a business perspective i would also have given as people will now talk about your girlfriend as being a bad employer. Its the thought that counts!

  6. donna west says

    Great article John. I have always said “you are either an entrepeuneur or you’re not’. its not for everyone. It requires some characteristics that some people just do not have. And it requires some capital. most people think they have to start out big and that usually shoots down their business plan before they get off the ground. at age 32, I found myself without a husband and without his weekly paycheck which I had counted on to run our household for 13 years. with no real job skills and an eight year old son with asthma, working away from home every day was not an option. I was never so scared in my life but it is amazing what good therapy it is to turn negative thoughts into positive business plans. My three boys and I figured out all kinds of things we could produce and sell to make a little money. we started out selling everything we could think of from popcorn balls to baby guinea pigs. My mom owned a pet shop at the time so i had a market for the pets we could produce. My mom and I had always dabbled in raising some puppies, bunnies, chickens, parakeets and the like as I grew up. so that part was easy. but living things have a way of eating and getting sick so a good business plan raising animals can go bad very quickly. but it gave my boys and I a “feel” for producing and selling a product. we learned early on that the best way to sell what we had to offer was to take our product to the people rather than to come up with a working plan to bring the people to our product. So we started setting up at festivals, swap meets and fairs. we were happy back then if we brought home $20 profit at the end of the day. So i have been a “hawker” all my life. Never got rich but had a lot of fun and got the bills paid and put some food on the table. Another thing I learned is that you have to have a product the people love and you can love it too but not more than your customers do. I used to make beaded jewelry. it was a relaxing hobby i really loved. i say hobby because i couldnt sell enough of it at the prices I needed to pay myself for all the time i spent creating it. The teenagers bought some of my necklaces but what they really wanted was what was “in” at the time. and I had no idea how to make it and I soon learned I could order the china made jewelry they craved for a whole lot less than i was spending on the beads to make my own jewelry. since my bank account needed help I had to provide a product that was in higher demand. so i put aside my beading habit and ordered stuff that was popular with the kids at the time. it was easy to figure out what they wanted cause my wholesale dealer had all the popular stuff in their catalog. now that i am retired and not selling anything anymore, it never left my blood and your article has my heart pumping new ideas for making a few bucks. i may have left the entrepreneurship but its never left me. thanks again for the informative artcle.

  7. Dave Herlihy says

    Another solid article John: concise, info packed and valuable.

    Often times my wife mentions a business she’d like to have (or that we’ll start) once we’ve moved to Philippines. Each time my reply is the same (to her dismay): “what’s your business plan?”. As the dreaming subsides I make it clear that my intent is not to discourage, but to account (as much as possible) for blind spots in the dream that could cost dearly.

    Along with the business plan conversations, my wife now knows the ‘This Little Piggy’ nursery rhyme. She likes the one who had roast beef. As a prospective business owner, I just don’t want to be the piggy who had none!

    With that background, my wife just chuckled as I read excerpts from Henry V’s experience to her.

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