SWOT Analysis on Competitors: Step-by-Step Guide

Understanding the landscape in which your business operates is crucial. One invaluable tool at your disposal is the SWOT analysis—a technique that could significantly elevate your strategic planning. When applied to competitors, it unveils insights that could be your ticket to staying ahead in the game. In this guide, we’ll reveal its purposes, how to conduct SWOT analysis on competitors effectively and share practical templates and frameworks to get you started.

What is SWOT Analysis?

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. It’s a framework designed to help organisations or individuals evaluate these four critical aspects of their business or project. However, when you shift the focus onto your competitors, it becomes an investigative tool that helps you uncover what they’re doing well, where they’re lacking, potential opportunities you could exploit, or threats you should be wary of.

Why Bother with a SWOT Analysis on Competitors?

Imagine sailing a ship in treacherous waters without a map or understanding of the sea’s currents. Conducting a SWOT analysis on your competitors is akin to having that map and knowledge. It helps you anticipate moves, innovate beyond the competition, and mitigate risks.

Whether you’re a business analyst, a product manager, a startup founder, a consultant or an investor, the SWOT analysis serves to understand the competitive environment and to make informed strategic decisions.

How to Conduct a Competitor SWOT Analysis – Step-by-Step

Conducting a SWOT analysis might sound daunting, but it’s quite straightforward when you break it down. Here’s a step-by-step guide for you:

1. Gather Comprehensive Data

Your first port of call is assembling a wealth of information about your competitors. This involves:

• Website and Digital Presence: Explore their website, blog, and digital footprints for insights into their product offerings, brand messaging, and customer engagement strategies.
• Social Media Analysis: Examine their social media channels for audience interaction, content strategy, and customer feedback.
• Customer Reviews and Forums: Scour platforms like Trustpilot, Google Reviews, and industry-specific forums to understand customer perceptions and pain points.
• Market Reports and Publications: Access industry reports, news articles, and publications for broader market trends and competitor performance.

2. Analyse Strengths and Weaknesses

This part of the analysis focuses inward on your competitors’ intrinsic attributes.

• Strengths: These are aspects where a competitor excels and has an advantage over others in the industry. This could include superior technology, a strong brand reputation, comprehensive customer service, innovative product features, or efficient operations. The key is identifying what makes them stand out and why their customers choose them.
• Weaknesses: Here, you’re looking for areas where your competitors fall short. This might be outdated technology, weak brand perception, poor customer service, limited product range, or inefficiencies in their operations. Understanding their weaknesses gives you insight into areas where you can differentiate and excel.

3. Scout for Opportunities and Threats

This segment shifts your focus externally, assessing how outside factors might impact your competitors.

• Opportunities: These are external elements that your competitors could leverage for their benefit. It might include emerging market trends they are well-positioned to take advantage of, regulatory changes that favour their business model, technological advancements they are adopting early, or market segments that are underserved.
• Threats: Conversely, these are external challenges that could pose problems for your competitors. This could encompass shifts in consumer preferences away from what they offer, new regulations that could hinder their operations, disruptive technologies they’re slow to adopt, or new entrants that could shake up the competitive landscape.

4. Consolidate and Analyse

After collecting and categorising the data, it’s time to piece together the puzzle.

• Create a Dedicated SWOT Matrix: For each competitor, draft a SWOT matrix. This visual tool should list their strengths, weaknesses, opportunities, and threats, providing a snapshot of their strategic position.
• Deep Dive into Each Category: Go beyond listing items in each quadrant. Analyse the implications of each strength, weakness, opportunity, and threat. For example, how does a competitor’s strong brand reputation protect them against market fluctuations? How might their slow adoption of new technology become a significant liability?
• Cross-Analysis: Compare and contrast the SWOT analyses of your competitors. This can reveal patterns in the industry, common vulnerabilities, or areas where your business could potentially carve out a unique position.

By enhancing your SWOT analysis with detailed, category-specific insights, you’ll gain a nuanced understanding of your competitive landscape. This depth of analysis not only tells you where your competitors stand today but also where they might be heading in the future.

Practical Templates and Frameworks

To make your life easier, numerous templates and frameworks can guide your SWOT analysis. Here are a few to consider:

• Traditional SWOT Matrix: A simple 2×2 grid where you list strengths, weaknesses, opportunities, and threats for each competitor.
• TOWS Analysis: An extension of SWOT that helps you match internal strengths and weaknesses with external opportunities and threats, creating strategic options.
• Competitor Comparison Table: List your main competitors on one axis and the SWOT categories on another. This allows for a direct comparison.

Best Practices when doing a SWOT Analysis

To ensure your SWOT analysis isn’t just an academic exercise, here are some best practices to keep in mind:

• Be Objective: It’s easy to be biased, especially when analysing competitors. Strive for objectivity by relying on data and multiple sources.
• Update Regularly: The business world doesn’t stand still, and neither should your SWOT analysis. Make it a living document that evolves with the market.
• Involve Your Team: Different perspectives can enrich your analysis. Involve team members from various departments to get a well-rounded view.
• Actionable Insights: Always ask, “So what?” After identifying a strength, weakness, opportunity, or threat, consider the implications and potential actions.

Wrapping Up

A SWOT analysis on competitors is not just about playing detective. It’s a strategic tool that, when wielded correctly, can illuminate the path to competitive advantage. Remember, knowledge is power, but only when it’s applied. Use your findings to adapt, innovate, and strategise. The business landscape is ever-changing, and with a comprehensive SWOT analysis under your belt, you’re better equipped to navigate its complexities.