Advanced Competitive Analysis (SWOT Analysis)
SWOT Analysis is a useful technique for understanding your Strengths and Weaknesses, and for looking at the Opportunities and Threats you face. Strengths and weaknesses are often internal to your organization. Opportunities and threats often relate to external factors. For this reason the SWOT Analysis is sometimes called Internal-External Analysis and the SWOT Matrix is sometimes called an IE Matrix Analysis Tool.
What makes SWOT particularly useful is that, with a little thought, it can help you uncover opportunities that you are well placed to exploit. And by understanding the weaknesses of your business, you can manage and eliminate threats that would otherwise catch you unawares
More than this, by looking at yourself and your competitors using the SWOT framework, you can start to craft a strategy that helps you distinguish yourself from your competitors, so that you can compete successfully in your market.
To carry out a SWOT Analysis, answer the following questions:
- What advantages does your company have?
- Price Model?
- What do you do better than anyone else?
- What unique or lowest-cost resources do you have access to?
- Client Base?
- What do people in your market see as your strengths?
- Special Expertise?
- What factors mean that you " the="">
Consider this from an internal perspective, and from the point of view of your customers and people in your market. Be realistic: It's far too easy to fall prey to "not invented here syndrome". (If you are having any difficulty with this, try writing down a list of your characteristics. Some of these will hopefully be strengths!)
In looking at your strengths, think about them in relation to your competitors - for example, if all your competitors provide high quality products, then a high quality production process is not a strength in the market, it is a necessity.
- What could you improve?
- What should you avoid?
- What are people in your market likely to see as weaknesses?
- What factors lose you sales?
Again, consider this from an internal and external basis: Do other people seem to perceive weaknesses that you do not see? Are your competitors doing any better than you? It is best to be realistic now, and face any unpleasant truths as soon as possible.
- Where are the good opportunities facing you
- What are the interesting trends you are aware of?
Useful opportunities can come from such things as:
- Changes in technology and markets on both a broad and narrow scale
- Product extensions and expansions
- Changes in government and regulatory policy related to your field
- Changes in tax laws
- Changes in social patterns, population profiles, lifestyle changes, etc.
- New sourcing that lowers costs
- Local events
A useful approach for looking at opportunities is to look at your strengths and ask yourself whether these open up any opportunities.
Alternatively, look at your weaknesses and ask yourself whether you could create opportunities by eliminating them.
- What obstacles do you face?
- What is your competition doing that you should be worried about?
- Are the required specifications for your job, products or services changing?
- Is changing technology threatening your position?
- Do you have bad debt or cash-flow problems?
- Could any of your weaknesses seriously threaten your business?
Carrying out this analysis will often be illuminating - both in terms of pointing out what needs to be done, and in putting problems into perspective.
You can also apply SWOT Analysis to your competitors. As you do this, you'll start to see how and where you should compete against them.
Key insights into your and your competitor’s analysis can also help you identify key objectives and action plans / metrics you need to focus on.
For more information, see:
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