Whether you just starting up a new company or have been operational for decades, it is essential to understand your competitors to create better strategies for your own business. If it is a new business with a new website, start by conducting a market research to understand the marketing strategies your competitors are using. When starting your business, you need to understand that there are other businesses that have been in the industry for long, so you need to aim higher with your businesses ideas to counter your strong competitors.
We recommend to do a SWOT analysis before you start out but also when you are more established. This will help you to improve over and over until you are ahead of your competitors.
A SWOT analysis is a plan that is used by businesses to objectively measure and assess their gross performance and the performance of competitors. SWOT is an acronym that stands for Strengths, Weaknesses, Opportunities, and Threats.
When carrying out a SWOT analysis, all these factors are evaluated for both the particular business as well as the competitors.
Strengths and weaknesses are the internal factors that influence the performance of a business, such as team members, team motivation, intellectual property, location, and reputation. A company can contain, regulate, or change the internal factors. If you want to make a positive change in your business, you will need to invest time and effort in improving team motivation, teamwork, accessible location, positive customer feedback, etc.
Opportunities and threats can be external factors, such as prices of material, market trends, and competition. These factors are hard to control or change, but a business can learn how to modify these factors to its advantage.
A SWOT analysis is often a long process that is undertaken to make long-term decisions for the organization. For instance, if the business decides to advance its field of operation and range of products, it may carry out a SWOT analysis to determine both the short-term and the long-term effects of the decision.
Perform the perfect SWOT analysis in 5 steps
Remember to be very objective when carrying out a SWOT analysis to avoid any biases that may affect the outcome of the process. The more honest you are with your business, the better the results you will get. As I walk you through the following stages of conducting a SWOT analysis, have a whiteboard, sheet of paper and other note-taking devices to clearly outline the strengths, weaknesses, opportunities, and threats of both your business and any competitor of your choice.
Here are the five steps to guide you through in conducting a SWOT analysis:
Examine the strengths
Examine the weaknesses
Examine the opportunities
Examine the threats
Derive conclusions and create a plan
Examine the strengths
The strengths are the activities that a particular company is doing well and are giving them a competitive advantage. By identifying the strengths of your business, you will have the opportunity spot opportunities to improve on them. If similar companies are doing better than you, consider their strengths as your goal. Evaluate what they are doing and plan on doing it even better. Take your time and strategize on the innovative ideas that you could apply to their techniques to make better and unique plans. To help you improve on your strengths try to answer the following questions:
What is the advantage of a competitor in your industry?
What goods does the competitor offer that is unique and valuable?
What strategies is the competitor surpassing others in?
What attracts the customers to the products of a competitor?
Is the competitor a market leader? If yes, how did they get there?
Is the organization of the competitor growing and hiring employees?
What powerful assets does the company have- intellectual property, stakeholders, buildings, infrastructure, etc.?
Examine the weaknesses
These are the areas in a company that need improvement. When analyzing the weaknesses, be very objective and honest about your company. Take a closer look at your weaknesses to help the business grow. Note that most of the points that you considered when analyzing the strengths could be used when examining the weaknesses. For instance, if a competitor is growing the business and hiring new employees, a drawback could be losing employees due to competition. Also, consider the following questions to help you assess your weaknesses:
What can this organization do better?
What strategies can the company improve?
Does the organization lack a good reputation?
What are the struggling points of this organization in comparison to the competitors?
What are the customers complaining about?
Is the organization experiencing retention?
What crucial assets is the organization lacking to boost productivity?
Examine the opportunities
To achieve the much-needed success in your business, you need to seize all the opportunities that come your way. Note that time and opportunities are equal to all the people and companies, including your competitors. First, evaluate all the opportunities available to you and utilize them before your competitor does.
When seizing these opportunities, do so in the best interest of your company- at the right time, and in reference to your organizations needs. Also, when examining the possible opportunities consider these crucial questions:
What is the latest market trend, such as sustainable development, social media connections, etc.?
What are the upcoming events to take advantage of? Holidays, shows, events?
Is there a cheaper loophole that you can take advantage of, such as eliminating the middleman?
Is there a chance to locate to a better area or in a larger building?
Can the business expand by, for instance, buying smaller businesses or rebranding?
Examine the threats
Threats are external factors that can affect the business negatively. Just like the opportunities, threats are similar to all business organizations. Your competitors are facing the same challenges, but some such as a bad PR or scandals from unsatisfied customers can be personal.
It is crucial to understand the threats and solve them accordingly to avoid more significant problems in the future. Note that even though the threats appear last in the SWOT analysis, it is crucial to address them first as they may cause permanent damages to your company. Here is a list of potential threats:
Are the customers unhappy with the products or the services?
Is the market trend fluctuating- are the prices rising with customers buying alternative products?
Has the government initiated new business policies?
Who are the new competitors in the market, and what better ideas have they brought?
What are the new technological trends in the market that can make some of your products or services obsolete?
What is the customers' present buying capacity in comparison to the previous record-are they buying less?
Make conclusions and create a plan
After understanding the strengths, weaknesses, opportunities, and threats facing your business, now you have the necessary tools to help you develop a better business strategy.
The new plan should help you improve sales as well as getting to the same competitive level as rival businesses. Consider these 4 steps to create a practical SWOT analysis final plan.
Get feedback from employees and other stakeholders after the analysis. Communicate the ideas to all members and give them a chance to raise their insights or issues.
Create an overview of the strengths alongside the weaknesses as well as the opportunities and the threats. Consider turning these into ideas and integrate them in your business plan.
Create a solution plan and prioritize the most crucial factors, such as the threats.
Execute the plan by giving all the partners and the stakeholders the final copy of the SWOT analysis so they know how to assist in executing the plan.
Note that global market trends are changing continuously, and this analysis should never be the last one. Conduct SWOT analysis once in a while to consider all these changes and to ensure that your business stays relevant.
We hope that this blog article about how to conduct a SWOT analysis for your business. Do not hesitate to reach out to our experts if you have any questions.
Hooray! We are listed as one of the top B2B Digtial Marketing Agencies by topmarketingcompanies.com.