SWOT stands for strengths, weaknesses, opportunities and threats. It is a business procedure where managers sort the particular qualities of their business into those categories in order to obtain a better understanding of their place in the business environment before coming to a decision. SWOT analysis is an information-gathering tool with broad applicability and intended to complement strategic thinking. It does not substantially differ when applied to international as opposed to domestic marketing.
Domestic and International Marketing
Marketing is the promotion of a product in order to sell it. Domestic and international marketing differ in their audience; one promotes products in order to sell it to domestic customers while the other does the same to customers in one or more foreign countries. International marketing is more complex because there are more factors to be considered and because it is inherently difficult to understand the tastes and mores of cultures not our own.
The business environment is the sum of the conditions under which a business operates. It includes economic conditions such as interest rates and cultural values such as the symbolic meaning assigned to colors. Domestic and international SWOT analyses differ mainly in that the latter must take into consideration the conditions at home, in the foreign market and possibly those in the competitors' home countries.
Strengths and Weaknesses
Strengths and weaknesses can be defined as the qualities of the business that render it either better or less able to compete against other businesses in the same market. Economic conditions in the home country can provide either strengths or weaknesses through affecting the business's production costs and prices while economic conditions in the foreign country can affect the desirability of marketed products on the basis of income. Cultural values in the market country affect the effectiveness and efficiency of the marketing message designed to spread word of the product and extol its virtues. Domestic and international marketing differ in that the SWOT analysis must not only consider the interaction of the domestic and targeted foreign economies but also their interactions with the domestic economies of potential competitors. For example, a business is strengthened if its domestic currency is weak because then its prices are lower in the foreign market it is selling its products in.
Opportunities and Threats
Opportunities can be defined as qualities in the business environment that present chances for the business to increase its profits, while threats are qualities that pose risks to its profits. SWOT analysis for the domestic and foreign markets differ not so much in the kind of qualities considered but in the scope. More opportunities exist in international marketing due to the multiple potential markets into which the business can enter compared to one domestic market. In contrast, the number of threats are not greatly increased. While it is true that the business faces more competitors in each foreign market that it competes, those foreign competitors are also easily capable of entering the business's domestic market and presenting a threat there.