The SWOT framework is vital for carrying out a fundamental scrutiny of your business assets, both tangible and intangible. It can be employed to evaluate the structure of your organization, operating output, and even your business model. Moreover, SWOT provides an outstanding means of gauging the individual success of different projects and departments in your company.
However, along with assessing your organizational threats and opportunities, it is equally crucial to be well-acquainted with the capabilities of your competitors. Besides, you also need to research their offerings and products to fetch quantifiable insights for a successful business strategy.
So, now the question is – can you employ the SWOT framework for competitor analysis? Let us find out.
Is it possible to employ SWOT analysis for competitive analysis?
Indeed, it is very much possible to do so, and, in fact, experts suggest that businesses should use the SWOT framework in their competitor analysis strategies. And this applies to all kinds of businesses both small and large regardless of the industry or sector they belong to.
It can be especially useful for startup businesses; SWOT can offer guidance to formulate your business model by leveraging your competitive advantages and also help reveal the best way to launch your brand in the market. If you already have an existing running business, you can use SWOT to effectively gauge the market conditions, through competitive landscape research.
Consider the following pointers to make your SWOT technique effectively focused on competitor analysis –
- Make sure you exactly know who your competitors are, carefully analyze their capabilities, and compare them with your business offerings. Remember, both the big and small players in your target market are your rivals.
- Do not make assumptions on any matter – decisions must be based on hardcore data.
- Conduct your research on data available from reliable sources because different SWOT analyses will fetch different outcomes.
- Choose the right personnel for brainstorming sessions, like senior employees, founders, and decision-makers who you know have a solid perspective.
- Do not hesitate to think out of the box – innovative thinking is the key to discovering new business opportunities from market gaps and also identifying hurdles.
What can SWOT analysis reveal?
SWOT analysis for competitor research can help uncover critical blind spots and provide valuable perceptions that challenge your threat assumptions. When employed strategically and collectively, this technique can deliver brand-new insights about the currency status or performance of your business and where it might be headed in the future. With that knowledge, you can modify your business strategies accordingly, to achieve your objectives.
The pandemic has taught us the criticality of making a business future-proof, for which the SWOT framework can offer invaluable data. It can help you with insights into the measures your rivals are taking to ensure business continuity. Armed with that knowledge, you can formulate your policies for future-proofing your business after identifying what needs to be fine-tuned.
We might often underestimate or overestimate our business assets, but carrying out a SWOT analysis can help us realize what our real position is. It can bring to light how unreliable or irrelevant certain strengths or weaknesses are compared to our threats and opportunities. In other words, it can offer you more opportunities to evolve and grow.
Integrating SWOT in your competitive analysis will empower you to anticipate potential problems and adjust new services or products as per the market demand. It can also create more room for you to invest in more competent projects or initiatives and offer valuable insights to work on significant improvements in your business model.
When do you need it?
A thorough competitive SWOT analysis might be needed only sometimes, this applies to big operational business houses that need to acquire prevalent market conditions from time to time. This helps them stay in touch with current consumer demands and market scenarios. However, those planning to launch a new business from scratch will need to conduct a SWOT analysis before starting their venture.
Experts suggest that a running business should ideally carry out a competitive SWOT analysis every year. This yearly analysis will help them retrieve the clearest picture of the annual status of their business and prevent lost connections with the industry, consumers, and competition.
However, there is no hard and fast timeline when you must mandatorily use the SWOT framework. It will always be helpful when –
- You are about to launch a brand-new business initiative
- You are planning to execute a change management plan, such as before adjusting a specific product or service line
- You need to assess the performance of your business or specific departments or garner an overview of how your business has been performing at a particular time
- You want to uncover newer avenues of growth and business opportunities
- You want to identify your organizational potential
Final words – SWOT analysis for competitive advantage
Strength is an innate and positive asset of your business that keeps you ahead of the competition. Your organizational strengths are essentially the cornerstone of your competitive advantage and can be both, tangible and intangible. But simply employing a SWOT analysis and comparing it with your competitors’ strengths is not enough. It is more important to brainstorm ideas and means to leverage your strengths to boost your competitive advantage and consistently enhance it. But the best thing about SWOT is that you can apply it to any business scenario or project to fetch valuable insights.
