Competitor SWOT Analysis- How does it work?

COMPETITOR SWOT ANALYSIS

Introduction- Competition can be the best motivation anyone can have to become a better version of themselves. The business world is all about becoming the best in your field of investment. To climb the ladder of success, a person needs to deliver his level best in whatever he does and at the same time, they need to be better than others in their field. You need to analyze your competitor’s strategies to beat them in their respective fields. Analyzing in the cooperate world requires you to understand an organization with their working pattern in past projects, plans, and ventures in terms of strength, weaknesses, opportunities, and threats. Evaluate your competitor in every possible way including all the ins and outs of the competitor organization to have an upper hand in every opportunity. All this can be done effortlessly with the help of competitor SWOT analysis.  

The word SWOT in competitive SWOT analysis stands for strength, weakness, opportunities, and threats of any organization and it is represented by a 2*2 grid reference with each block representing the following aspects. SWOT analysis of your competitor helps you analyze every move of your competitor and evaluate them accordingly. Further, keeping in mind every advance that your competitor can make or has made in past, you can plan your strategy for every investment and up your game from them. Running a SWOT analysis on your competitor not only gives you an overview of other companies but also helps you understand your flaws and address them accordingly to become a better version in every prospect. It is basically to observe others work on yourself. To have such an advantage over others company we need to perform a necessary competitive SWOT analysis and a detailed study will provide you with all the big or small information you need to know about Competitive SWOT analysis.

How Does Competitor SWOT Analysis Works? 

It is generally said to understand any problem you need to look at it with a different perspective or probably think out of the box to reach any solution and when a company faces any crisis they try to understand the areas they are lacking in or how the consumer perceives the company and their product, competitor SWOT analysis provides you with that another perspective. Competitor SWOT analysis narrows down these probabilities into two major internal and external factors affecting the success and growth of the company. Based on these factors the company comes up with a plan to ensure that they lead from their competitor companies.

  • Internal Factors

The internal factors assessed in the Competitor SWOT analysis are the strength and weaknesses of the competitor company. You need to have a clear-cut knowledge of what each of these sub-factors entails to operate a SWOT analysis on your competitors. These internal factors can be analyzed by previously entered data and you just need to summarize them.

  1. Strength- What is your competitor company good at? What quality of your competitor company makes them unique from others in their field of investment? How do they engage the customers? What is their company’s main focus with which they could not tamper? Where does the strength of the whole company lie? These are few questions that come into mind when we think about strength. 

This strength could be advanced equipment, skilled employees/workers, innovative techniques, etc. The stronger side can be production, sales, facilities, tangible asset, manpower, customer service and it could even be years of experience in that particular field as well which every global brand provides. Pricing and distribution are the most common factors that constitute the strength of a brand. You can easily differentiate between you and your competitor through these strengths and plan accordingly to outwork these strengths.

  1. Weakness- The areas where your competitor company lacks from your company and probably other companies too. What are mistakes that they have made in the past that have greatly affected them or what are the resources that they fail to provide the customer with? The answer to these questions can be found by the SWOT analysis of your competitor based on the previously stored data. These are the sore spot of your competitor you have to target. Then you just have to play with their weakness and prove that these problems will never be faced by your customers to win them.
  • External Factors

Your next step after analyzing the internal factors should be external factors that are opportunities and threats. These factors require a great deal of effort because these factors are more or less like future predictions like what is your competitor’s plans of investment, involvement, and partnership in the upcoming days to reach a bigger platform.  

  1. Opportunities- Firstly, you need to find out the ultimate goal of your competing company that can be fulfilled through the upcoming opportunity and how can it prove to be risky for your company and then try to avoid these opportunities from falling right into the hands of your competitor. 

Secondly, you need to have connections and the right resources to grab these opportunities before competing companies so that the outcome is in your favor. To have such an advantage, you need to be well prepared with better and innovative strategies, product, budget, and positive press/Media feedback, promotion, and advertisement as they always act as a good source. 

  1. Threats– By analyzing the threats your competing company can face in near future will be beneficial for you as you will be prepared to use that threat to your advantage and at the same time, you will be well informed if that threat can affect you in anyways and can defend yourself to those threats. 

These threats can be an emerging company with a promising future, a partnered organization which is like dealing with combined force or change in trade system they usually deal with. Negative remarks and feedback by wrong promotion can become a major threat to any company.  

Steps to conduct Competitive SWOT Analysis

To conduct a Competitive SWOT analysis you need to collect all the past, present recorded, and observed data that can sum up every minute detail about the company from the period it was set up to their ongoing projects up to their plan of investment in the market. Not only that you need to evaluate the position that your competitor company holds in the business world. To sum up the research category you need to distinguish between the well-wisher and competitors to the company you are conducting a SWOT analysis on. Now moving on to the essential part of how to analyze your competitor, follow these steps:   

  1. Focus on the product that is competing with others and tick out those points that are provided by both you and your competitor.
  2. Check the market in which the product is going to be put and narrow down the competitor list to the previous leading companies. You can add any other company you feel that can give tough competition to you.
  3. Conduct SWOT analysis on the companies in your competitor list to find their strength, weaknesses, opportunities, and threats.
  4. Differentiate other companies’ products with your product and then integrate suitable strategies to work out.

Conclusion

Through Competitor SWOT Analysis, you will be able to deliver more than what will be expected from you. Competitor SWOT analysis is the simplest, easiest, and effective method to deal with the constant uprising competition in the business world. It prepares you for every expected and unexpected situation and keeps you one step ahead of your competitor. Competitor SWOT analysis is a necessary step for small start-up companies through which they can learn from the experience of other competitors and by using their innovative ideas they can come up with something revolutionary and as it is said “While it is wise to learn from experience, it is wiser to learn from the experience of others.”

Questions and Answers

  1. What is the difference between a SWOT analysis and a Competitive SWOT analysis?

SWOT analysis is being conducted by a company to analyze their strength, weakness, opportunities, and threats to assess the areas they need to work on. 

Whereas the Competitive SWOT analysis is conduct by a company on their competing companies to minimize the gap in the market and to increase awareness from their competitors.

  1. What is the importance of a Competitive SWOT analysis?

Competitive SWOT analysis plays an important role in making you understand the advantages and disadvantages you have over one another, step up your strategy, threats that can be posed, and forecasting the returns.  

  1. Which is the best book to read on Competitive SWOT analysis?

Product management for Dummies, Market condition and competitive SWOT analysis, Strategic Analysis, and SWOT analysis by Paul Newton& Helen Bristol are the few most recommended books to read on competitive SWOT Analysis.

Competitor SWOT Analysis- How does it work?

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