In an effort to gain a stronghold in the market, complete a SWOT analysis. This involves determining the strengths, weaknesses, opportunities, and threats to your company. According to Albert S. Humphrey’s contribution to businessballs.com,1 the concept of the SWOT analysis was created in the 1960s by a research team of which he was a member. Its main point is to determine current and future advantages and disadvantages so a business owner can work on improving her management strategies.
If you’re considering performing this analysis for your business, do the same analysis on your competitors. This can give you an advantage because it offers you insight into how to set your company apart.
1. Look at your competitors from a customer’s point of view. This is often the best way to conduct research on them. Nancy A. Shenker, president of theONSwitch marketing firm, told Entrepreneur² that business owners should sign up for their competitors’ mailing lists. Signing up for mailing lists enables business owners to get a steady stream of literature about their competitors, offering constant insight into their new offerings. Shenker shared other tips in the Entrepreneur article.
2. Consider the strengths of your competitors. You need to find out what they are doing right—then do it better. This step will also satisfy your curiosity of just how much better your competitors are doing, if at all. According to Virtual Advisor Inc.,³ sources that contain this kind of information include yearly reports, press releases, and databases that specialize in offering facts about businesses.
3. Examine your competitors’ weaknesses. As you have suspected all along, your competitors have a few shortcomings, and you now have a good reason to investigate them. Check records to find out if they have lost any market share, major clients, or important vendors, because big changes can indicate instability.
4. Determine the opportunities left by your competitors. If it turns out that your competitors’ customers are unhappy or disappointed lately, consider how that could benefit you. This is how their weaknesses can become your strengths. If you think their mistakes have led to an opening for you to present a new offering for customers, start planning now. If you suspect that other companies are forgetting about a particular audience, start focusing on that market today to gain an advantage in the industry.
5. Pinpoint the threats that your competitors pose. If your competitors’ customers seem happy, you should not ignore the threat that this may pose for your own customer base. If their market shares appear to be steadily increasing, you need to find out why, especially if your share of the market has stagnated.
Conducting a SWOT analysis can offer you a few ways to refresh your marketing tactics and product development while ensuring that you rise above your competitors.