Did you know that the SWOT analysis isn’t just for your own organization? Businesses all over the country perform SWOT analyses on their competition, to great effect. A SWOT analysis on a competitor can help you gain leverage in your market and pull ahead of the competition, putting your business where it needs to be to succeed.
This guide will show you how to effectively perform a SWOT analysis on a competitor. We’ll cover everything from how a SWOT analysis is performed to how you’ll go about gathering the information you need to do a complete analysis.
Know the Acronym
First and foremost, you’ll need to know what SWOT stands for. If you’re reading this, chances are you know the acronym, but we’ll cover it just in case you’re a newcomer to the technique.
SWOT stands for strengths, weaknesses, opportunities, and threats. When you’re performing a SWOT analysis, you look at each of these factors in detail to gain a better idea of what you’re dealing with. In the case of a business SWOT analysis, you’re looking at things that are holding your business back or that your business does well so you can make more informed choices.
In the case of the competition, you want to know these things so you can have leverage over the competitor in your market. Knowing a competitor’s weaknesses and strengths can help you better tailor your business practices to put your organization ahead.
Your Competition’s Strengths and Weaknesses
The first step of your analysis is to analyze the competition’s strengths and weaknesses. Develop a SWOT analysis that is both thorough and includes plenty of detail by asking the right questions.
For strengths, ask these questions:
- What does the competition do well? What are they known for?
- Why types of customers do they attract and why?
- What makes those customers loyal to their brand?
- Why would a customer choose them over your brand?
- What do they do that you don’t do?
For weaknesses, consider these questions:
- Are there any consistent complaints about your competitor?
- What problems have you noticed about their customer service/products?
- Are they meeting industry standards?
- What’s something they don’t do that they should be doing?
- What negative trends have you noticed about the competition in the previous years?
These questions will help your team brainstorm and formulate a proper analysis of the competition. Be sure to look closely at things like customer service, quality of products or services, and consistency. These are usually what separates the competition from one another, whether it’s in a good way or a bad way.
Opportunities and Threats
Opportunities can arise at any time during the course of a business’s lifetime, and the same is true for threats. Take a close look at both opportunities that can benefit the competition and opportunities for your business to get a leg-up on the competition.
Is the competition doing anything right now that can ultimately be an opportunity for you? Perhaps they’re failing in an area where you shine, or their customer service has seriously deteriorated since hiring new people.
What threats are present to the competition? Are they doing things that are threatening to your business? Maybe they’re rolling out new products that customers are really excited about or overhauling their customer service with an improved training regimen.
Once you’ve identified these two key factors, you can complete your SWOT analysis and move on to the planning phase. Be sure to include your team in your analysis, and do your research.
What to Do Next
You’ve analyzed every part of the competition, and your SWOT analysis is now complete. What next? The next thing to do is formulate a plan to excel above your competitor. You know their strengths. How can you match or beat those in the coming months or years? You know their weaknesses. How can you push yourself ahead of them by exploiting those weaknesses?
All the awareness in the world doesn’t mean a thing if you’re not using it. Don’t let your detailed SWOT analysis sit in a drawer and gather dust. Put it to good use! Your business won’t ever excel in your industry if you don’t know what the competition is up to and how you can beat them.
Conclusion
A SWOT analysis is one of the simplest and most effective tools at your business’s disposal. It can be used to analyze your own organization, the competition, and help you make better-informed decisions. Learning to nail a SWOT analysis can make you a better manager/owner, and help you match or beat the competition.
There are plenty of guides and how-to’s online for SWOT analyses, as well as templates you can use if it’s your first time. Remember that the information you get from a SWOT analysis is what matters, not how pretty the paper looks. Your analysis can be as simple as a piece of paper with four lists.
