We have all heard about SWOT analysis and how it’s a versatile business tool as a form of competitive analysis that can define your company’s strengths, weaknesses, opportunities, and threats.
The Swot analysis an essential framework for fundamentally analysing your assets. It can be applied to your organisation structure, operations output, or even your business model. Also, it’s an excellent measurement to focus on the success of multiple departments and projects individually.
But while analysing your threats and opportunities, you need to go deeper into your competitors’ assets. So, the question here is: how much do you know about your rivals?
And yes, you need to know more about their products or offerings. You can learn quite a bit about their competitive edge, strengths and weaknesses. Obtaining this information will help you develop a strategic marketing plan and have a substantial advantage for your company.
All that’s left is defining opportunities and threats for your company.
Now this all sounds great, but how do you actually do a SWOT analysis?
You may know what competitor SWOT analysis is, but if you still feel a bit confused or are starting from scratch, we have got you covered.
We’ve put together this complete, step-by-step guide that illustrates not only how you can carry out a SWOT analysis but also how to attain quantifiable results from your thorough investigation. So, without further delay, let’s get started.
What is SWOT analysis?
SWOT is an analysis to discover strengths, weaknesses, opportunities, and threats used as a framework to evaluate value propositions and a competitive position to come up with strategic planning.
That’s why SWOT analysis assesses internal and external factors and current and future potential.
This analysis is designed to have a broader picture of a realistic, fact-based, and data-driven look at an organisation’s strengths and weaknesses. It eases the mission of marketers to carry out initiatives within an industry.
Thus, your organisation team must keep the analysis accurate by avoiding preconceived beliefs or natural or grey areas. Alternatively, you need to focus on real-life contexts to use this analysis as just a guide and not necessarily as a prescription.
Understanding SWOT analysis: What Does That Mean?
What does SWOT actually mean?
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.
But you may not know how to put it into practice. What does each of these elements mean individually? Let’s take a look again at these elements and focus on how to make them practical.
This is the first element of your analysis. Strengths can be:
- Things your company can do well.
- Features in your product that separate you from your competitors.
- Qualities of your overall company that help you stand out.
- Unique internal resources such as knowledgeable or skilled staff.
- Intangible assets such as good company values that help to motivate your team.
- Tangible assets include capital, technology resources, intellectual property, etc.
You’ve probably guessed this right. Strengths address things that your brand does exceptionally well. As mentioned, it might be something intangible such as your company’s brand image or attributes, or even something more easily noticed such as the unique selling proposition.
You might have a particular product line that will keep your brand innovative.
Additionally, it could be your people. Your literal human resources, a great marketing team, or strong leadership. Think of all you have that already works well in your company.
Once you’ve uncovered your strengths, it’s time to turn to something you probably are not talking so much about, weaknesses. But it’s critical self-awareness that will help you figure out your gaps.
Weakness might be:
- Things your rivals do better than you.
- Things your company don’t have or lack
- Sources limitations
- Unclear unique selling proposition
Identifying weaknesses will give you an honest answer as to why you can not achieve your business objectives. It’s invaluable to know what’s holding your company or project back. You can list organisational challenges like a shortage of experienced people or budgetary and finical limitations under weaknesses.
Here, you can also record other areas for improvement in relation to other companies in your sector, such as the lack of a product feature or clearly defined unique selling proposition in the crowded market.
That leads to another important element in your competitive analysis, Opportunities.
- Shortage of specific products in some markets.
- Few competitors in an area
- A new trend that no one has jumped on yet
- Emerging needs for particular products or services.
- Your company gains more attention from the press or media (even comics on social media).
Another opportunity may arise if you can’t keep up with the volume of leads. If your marketing team became more seasoned in generating more engagement through social media, it’s an excellent opportunity to announce a new service.
Is your company developing a bright new idea that will definitely open up new markets or target new demographics? Well, you’re lucky because it’s an excellent opportunity.
To sum up, this element of a SWOT analysis reveals everything you could do to grow as a company, for example, improve sales, attain your objectives or advance your organisation’s mission.
The final element of this framework is threats which reflect everything that poses a risk (and keep it clear it’s a risk, not just a challenge) to either your company itself, your stuff, or its likelihood of success or growth.
So, threats can be:
- Emerging competitors
- Tough economic situations
- Changing regulator environment
- New technology software that could substitute a service you offer
- Negative media/press coverage
- Negative comments or reviews on social media
- Changing customer attitudes toward your company
Threats could also include things like emerging product lines, new legitimacy amendments, financial risks, or virtually everything else that might potentially jeopardise the future of your brand or project.
But wait! That’s not the whole concept of a SWOT Analysis. Some companies might replace these four quadrants with just two parts: internal and external factors. There is no right or wrong when implementing your SWOT analysis. What matters is the outcome of your formula.
So, if you want to follow these companies, you can compartmentalise your data into two distinct subgroups. Let’s see how.
Typically, internal factors include strengths and weaknesses because they are generated by organisational decisions under the control of your company or staff. So, for example, a drop in sales would be categorised as a weakness but improving sales is still within your control. For example, you could offer training for sales reps, making it an internal factor.
Consequently, your SWOT table would categorise emerging rivals as a threat. Because you can do very little about this, it’s considered an external factor.
That’s why you have probably seen SWOT analysis referred to as IE metrics or Internal-External analysis.
They all refer to the same concept.
Eventually, subcategorising primary element into internal and external factors is optional for the success of your SWOT. It’s critical to determine your next move and evaluate the degree of control you gain over a given problem or opportunity.
Also, remember you can coin items under each category in points. But it is better to turn them into questions to begin searching for answers.
For example, if you find an opportunity as a new trend like matcha and already have a coffeehouse, instead of writing matcha— you can shape it into something like “How can I maximise my sales by making the most of the matcha trend?
Pro tip: for the best practice, ask yourself where you want to go, what might get in your way, and how you might get there.
Why Should You Conduct a SWOT Analysis as a Competitive Analysis?
Both large and small businesses should conduct a SWOT analysis, no matter the industry and what they are looking forward to.
SWOT is a competitive landscape analysis used to measure market conditions if you already have a business.
If you’re starting a new business, SWOT can help you craft your business model and decide the best way to penetrate the market. Also, you will know more about your competitive advantage.
Indeed, SWOT analysis can help you challenge risk assumptions and discover dangerous blindspots. It’s a technique to uncover your organisation’s performance. Thus, if you use it carefully and collectively, SWOT can deliver new insights into where your business currently is and might be in future.
After that, you can develop exactly the right strategy for your stance. Also, you will have a plan for any situation to act accordingly. Finally, doing SWOT will inform your break-even analysis and deliver a more realistic picture of what you’re going for and what you’re signing up for.
For example, you might be well aware of the strong points of your organisation. Still, once you write them down alongside weaknesses and threats, you might realise how irrelevant and unreliable those strengths are in compared to opportunities, weaknesses and threats.
Because we might overestimate or underestimate what we have, once we record them in front of our own eyes, we recognise our actual position.
Equally, you likely have a bunch of reasonable concerns about some of the weaknesses in your business. However, by going through the analysis systematically, you would be able to find an opportunity, likely overlooked, that could more than compensate for something you currently lack.
It might be a real chance to grow.
SWOT can be included in a business plan if you need to seek a startup, or you can implement it as a separate strategy.
In short, having a competitive analysis, especially SWOT, will allow you to:
- Anticipate problems.
- Adjust new products and services according to market demands.
- Keep your business operations running smoothly.
- Invest in creative and more competent initiatives throughout the year.
- Work on significant changes or improvements.
When Should You Do a SWOT analysis?
You will need to do your SWOT analysis before starting your business. However, you will only sometimes need an in-depth competitive SWOT analysis. It’s more useful for large situations or general business or market scenario overviews.
Some experts suggest performing SWOT annually, considering it the annual state of your business. This yearly analysis will keep you from losing connection or touch with your business, industry and consumers.
So, your competitive analysis will be helpful:
- Before you plan a large change, including product adjustments— it comes as part of a change management plan.
- When launching a new company initiative.
- Anytime you want to grasp a complete overview of business performance.
- When you want to assess business performance from multi-level perspectives.
- When you’d like to spot new opportunities for improvement and growth.
SWOT analyses are generally conducted for a reason, however. Therefore, you can apply them to almost any project, scenario, or business.
Pro tip: when conducting a SWOT analysis, be realistic and rigorous. It’s time to identify and prioritise your ideas to stay focused, without wasting on time and money. Then, you can generate the most impactful and significant actions and solutions.
So to answer the question, “Is SWOT a Competitive Analysis?”
It depends on how to use it. For example, you can assess your company, or you can asses your company’s properties against other competitors. Or, you can evaluate other competitors’ business units.
So, to what extent sould you conduct this?
It also depends on your goals for carrying out this analysis. However, you can do your competitive analysis if you want to start a new business.
If you have a business, you can combine both from time to time to monitor the market and develop your strategy accordingly.
Now that we know what this analysis is and what each element means, let’s take a thorough look at how you can create it and how to conduct a perfect SWOT as a competitive analysis.
How to Conduct a SWOT analysis to Be a Really Competitive Analysis?
But how can you get information to create your analysis? The general rule is to stop assuming. Instead, collect data that can help you establish your accurate competitive analysis. And here is the approach you should take.
- Identify Your Competitors
Make sure you know your compilers. That is the first and most significant step in conducting a competitive analysis. You can only accurately assess your competition if you know your who they actually are.
Once you know your compilers, look closely at their features and capabilities. What are they offering that you’re not? What do they do better than you? Then, use this information to improve your offerings.
Keep an eye on your compilers’ pricing models. How do their prices compare to yours? Are they offering any discounts or promotions that you’re not aware of? Use this information to adjust your pricing accordingly. Competitive Pricing Analysis is an important tool to use to ensure prices are fair but profitable.
Take notes of these questions and gather them in a neat document because you will need them again when creating your SWOT model.
- Compile Reliable Resources
Evey SWOT analysis can get you different outcomes. So, your company needs different data sets to support together building other SWOT frameworks. You should start with understanding what information you need and what information you can access.
Also, define your limitations and how reliable your data sources are.
- Gather the Right People
When holding brainstorming sessions to come up with insights to put inside your analysis model, you need to consider choosing the right people.
This session should include business decision-makers, founders, and senior-level employees. But also, don’t be reluctant to invite other employees you think have a good perspective.
Too many cooks in the kitchen isn’t always a bad thing if they know what they are doing; more input can strengthen your analysis.
- Get Creative
Conducting a SWOT analysis means you must push bounders to see things for the first time, recognise new opportunities, and be aware of difficulties you might face.
That’s why it’s essential to be creative and generative of innovative ideas.
But to get them, you need to be ready for them. That means you must create fun ways to help find real opportunities.
Try to invite your team to watch videos about entrepreneurs and how to turn market gaps into opportunities. Select anonymous ideas and let everyone think about them; choose obviously bad examples and see how to improve them. You can even play team-building games to inspire your team. You’d be surprised by the outcome.
How Can Profiletree Help You?
SWOT analysis helps you to figure out your organisational potential. It guides you to building a better business based on what you do well, while addressing what you don’t have, seizing any potential opportunities and reducing risks.
However, Competitive analysis can not happen without thorough research to assess your organisation’s position and decide on any strategy for your new plans.
Our team will help you build your SWOT matrix from scratch based on marketing research we will conduct within your industry to explore your competition and establish a perfect competitive analysis.
Then, we will use these insights to prompt your research and record any ideas you can take advantage of to gain an advanced value proposition.
Avoid creating vast lists of suggestions that will leave you overwhelmed and confused. Instead, our experts are here to make your plan specific and well-tuned to target the right audience.
And when it comes to defining your weaknesses, we will go through various options detailing how to improve upon them.
We understand that using SWOT analysis should come up with other tools. That’s why we bring the best approaches to collaborate with your business to uncover a more honest and accurate picture for the best possible outcome.
Ultimately, you can figure out what’s working, what needs improvement, and what’s not so good.
We’ve mapped out a path to the rewards you want! For more information, you can contact our team.