Many companies know who their competitors are. If don’t, this can quickly be fixed by a Google search or by looking in local business directories. A company with multiple competitors means many businesses will be competing for the attention of customers. If this sounds like your industry, you’ll want to keep reading.
In Part One of this two-part series, we’ll take you through the steps in identifying your edge over your competitors, so you can market your business accordingly.
So, how do you know what your company does better than your competitors? This is where a SWOT analysis comes in.
What is a SWOT analysis?
A SWOT analysis is a business tool used to identify:
Strengths
Weaknesses
Opportunities
Threats
SWOT is used by businesses to identify what their own strengths and weaknesses are, as well as auditing their competitors’. It is also used to identify opportunities for growth and potential threats to yours or your competitors’ businesses, helping you to plan accordingly.
Let’s take a look at the elements of a SWOT analysis in more detail:
Strengths
Your “strengths” can be defined as the things that give your business a competitive advantage. When considering the strengths of your business, your options are not limited to things you sell that your competitors don’t offer – they can include something that you do better.
For example, you may sell jewelry online and offer one-day shipping compared to your competitors who only offer two-day. The convenient location of your business location could be your strength, such as a hotel that’s close to a popular tourist attraction. Your strength could be a product feature or service that none of your competitors offer, for example a personal trainer that offers nutritional advice as well as fitness training, a service that none of the personal trainers in the local area offer.
Weaknesses
No business is perfect, companies will always have weaknesses. A good way to identify your own weaknesses is to listen to your customers, the issues they highlight, and the barriers they state in the buying process. Your weaknesses could include anything from higher prices compared to your competitors or poor customer service.
Once you have highlighted your competitors’ weaknesses you can exploit them. To give an example, a competitor may only operate within business hours, Monday to Friday 9am-5pm. By marketing the fact that your business is open weekday evenings until 8pm and all day Saturday and Sunday, you could give yourself a competitive advantage.
Opportunities
There are also things that are beyond your control. These instances could include external influences that impact your business such as economic, legal, political, technological, environmental or social factors. These factors can potentially bring both opportunities and threats to your business.
An opportunity could include expanding your business to a new country as a result of a previous barrier no longer in place – such as an import law or legislation around trading overseas being changed or removed.
Another opportunity could include the Internet. For example, if you are a physical business with competitors who rely on offline marketing methods, getting a website and promoting your business online could be a huge opportunity for you to stay ahead of the competition.
Threats
As mentioned, there are many external forces that can affect your business – some of which may be classed as threats. Examples of threats could include a change in exchange rates, making your products less competitive certain countries, or rental increases that impact your fixed costs. If you are selling clothing or accessories, ever-changing tastes in fashion could be a potential threat as well as new competitors to the market, impacting you and your competitors.
When analyzing your competitors’ threats, identify the ones that do not affect you, these are likely to be opportunities that you can take full advantage of.
Now that you have completed a SWOT analysis of your business and your competitors, you can start marketing to the strengths of your business and the weaknesses of your competitors. In addition, you can prep for the various opportunities and weaknesses you’ve identified. Stay tuned for Part Two, where we take you through 5 ways to stay ahead of the competition.
Well, as far as I can see this article doesn’t really have any meat. It has a lot of paragraphs about what should be done, but no links or instructions as to how to go about accomplishing what it says to be done. Frankly, I don’t have time to waste on fluff articles. I want useful information: you know links where I can go to accomplish this stuff?
Hi Gail
My name is Abi, I’m a member of the Marketing department here at Yola. I’m sorry to hear that you didn’t find this article useful. We aim to write on topics that are helpful and interesting to our users. If you have a specific challenge you’re facing or a particular subject you’re interested in, please do let us know by emailing support@yola.com.
Just to recap, SWOT analysis is important as it helps companies consider their own businesses strengths and weaknesses, as well as identify the key opportunities and threats they face externally, in the marketplace. Once these factors have been identified, it is easier for business owners to plan more effectively. To be clear a SWOT analysis is a written exercise. If you are interested in doing one for your business, you can find a template here: http://office.microsoft.com/en-gb/templates/swot-analysis-examples-TC101875476.aspx
I hope this helps, as mentioned if you do have any content suggestions or specific topics you would like to learn more about please let us know by emailing us via the email address above.
Kind regards
Abi