Competitor SWOT Analysis
If you’ve been in business for any length of time, you know that assessing strengths, weaknesses, opportunities and threats is a regular exercise. Internal SWOT analyses have a ton of benefits and can shed light on areas of struggle and opportunities for growth. But a deeper look at what’s going on inside your company isn’t the only useful way to use this assessment.
Competitor SWOT analysis turns the exercise outward, pinpointing what your competition is up to. Of course, this has the beautiful byproduct of defining the competitive landscapes and empowering your team to make strategic moves.
Let’s get into it.
Assessing Competitors Using SWOT
While useful, SWOT is of course just a methodology that covers the basics about how a competitor is performing. When you conduct this kind of analysis on a competitor, the paradigm shifts a little.
What competitor strengths pose a risk to your own business? What are your competitors doing better than you or doing the best in the marketplace? In other words: what is their sweet spot? The more definition you can give to this, the better.
When you identify competitors, you’re looking at companies that are selling something similar to yours or offering similar services. The power isn’t in the overlap: it’s in the difference. Differentiators are the stuff your value proposition is made of. When the difference between you and a competitor is that they are stronger in a certain area, you can make decisions with greater clarity.
What competitor weaknesses imperil their business? What are your competitors doing worse than you or doing poorly in the marketplace? What major mistakes have they made or do they continue to make?
Competitor weaknesses can show up in a lot of areas. When you dive into competitive intelligence (CI) data, you may uncover things like high rate of staffing turnover, poor SEO, marketing fails and more.
Your team needs a thorough understanding of the weaknesses of your competitors. This understanding must be comprehensive (you never know when chinks in the armor are ready to exploit) and current. Just like strengths, weaknesses change. That’s why CI is an ongoing endeavor.
Strengths and weaknesses can mostly be gleaned from data as it is analyzed. As CI activities uncover data about revenue, growth, HR, new products and marketing, you’ll get a clear picture of where your competitors stand in the market. This is great, but incomplete. The next step of a SWOT analysis is always to identify opportunities.
When you’re doing a competitor SWOT analysis, you see the opportunities that are in front of competing companies. What opportunities do they have to grow in the marketplace, change or develop products/offerings, acquire something, form partnerships? This does move into more nebulous territory, as opportunities are many and depend on a number of factors.
You may find competitor opportunities as you zoom out of the competitive landscape in general. For instance, market dynamics can impact the financial or operational plays a competitor can make. Having a 30,000 foot view—and enough additional knowledge to anticipate a competitor’s next move—can help you make proactive shifts in response to the opportunities they end up taking.
What is your competitor up against? Competitor threats can be everything from supply chain disruptions (hello, 2020/2021) to new companies being formed. If the competitor you are analyzing provides something similar to your own product or offering, these threats may be similar to your own.
In this sense, threats can be both internal and external. Maybe a popular CEO is retiring; perhaps the company is merging; maybe global finances are impacting trade. Knowing the imminent or likely threats that are facing your competitors is important because they will react to those threats, usually in predictable ways. If you can predict what your competitor will do, you’ve got a roadmap for success.
Using SWOT for Competitive Intelligence
In the broader scheme of your CI efforts, competitor SWOT analysis has a useful place. Even as you conduct a SWOT analysis for competing companies, it’s important to keep a few factors in mind. Like with any competitive intelligence project, the sheer quantity of data you collect can be paralyzing. Here are some tips for using the content in a meaningful way.
- Create Timelines: each time you do a SWOT analysis, you are gathering information that is relevant to that moment in time. Because you can’t do this every day—and some industries have staggering rates of change—it’s useful to create timelines. Consider how to forecast or predict some shifts based on what you now know. This way, you’ll best decide how to implement proactive strategies.
- Rank the Insights: while sifting through competitor data can feel like a goldmine, not every piece is as important as another. Software tools can offset the manual factor and help teams get to the point faster. Bottom line: figure out what data points really matter in service of generating knowledge, which are really going to impact the future and which you need to choose to analyze.
Getting on top and staying there will never be a passive reality. Companies will always have to push the bar and get ahead of the competition. This is only achievable through competitive intelligence that supports actionable strategic decisions.
Stay ahead of your competition with the competitive intelligence experts at Fahrenheit Advisors. Schedule a call today.
MEET THE EXPERTS
Peter Grimm leverages his background in national security and experience as a strategy consultant and PE-backed CEO to help clients navigate rapidly changing environments. He is skilled in corporate strategy, market analysis, competitive intelligence, disruption planning, disruption preparedness, and organizational leadership.
Following service in the US Navy and as a counterterrorism analyst at a US government agency, Peter spent 8 years in the Strategy Practice of Deloitte Consulting. Peter then served as CEO of a PE-backed consulting and technology firm, leading the company through two successful exits. He’s helped middle market companies, Fortune 500 firms, and Federal agencies “see around the corner” and turn threats into opportunities.
Jennifer Buchwald has been helping companies make better decisions through strategic insights and competitive intelligence for more than 15 years. With a formal education in philosophy and experience working in a broad set of industries, Jennifer brings a holistic understanding of business challenges and forward-looking observations to a diverse set of clients.
Jennifer began her career fielding market research studies for clients in the Consumer Packaged Goods space before joining one of the largest grocery chains in the United States performing location intelligence and site analysis for their real estate division. After a period providing competitive intelligence services for a Fortune 100 infrastructure technology company, she joined a boutique firm offering strategic advice for clients in a variety of industries.