20 - How to use SWOT to create a competitive advantage
Part 1 Gathering Information
SWOT is a method for analyzing both your own businesses position as well as your competition’s. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. Every business has competition and the key to creating an advantage over your competition and gaining market share is honestly analyzing your competition’s strengths and discovering how your own business measures up against them. It can be painful to look closely at your own business and see how another company is better than your own, but by completing this process you will significantly strengthen your business position within a crowded marketplace.
The first step of the SWOT process is gathering information on the competition. Gather this information by visiting competitor’s websites, requesting their sales materials, walking into their stores, and speaking with their employees. What products and services does your competition offer? Do they have a niche market? How do they retain their customers? What is their marketing strategy? Look closely at details like pricing, guarantees, delivery options, and hours of operation. What is their competitive advantage?
Now you need to complete the same process with your own business. Gather these same details and then find your strengths. Look at your company not just from your own point of view but also your customers view point. What makes your customers come back to you for repeat business? What kind of word-of-mouth advertising do you receive from your customers? Do they come to you because of your prices, quality, or knowledge? Do you command a niche market? Is there anything you currently offer that your competitors cannot reproduce?
The next step to analyzing your competition is to look for their weaknesses. Are there areas they are neglecting? For example, do they keep up with the latest technology? Search out details about their business that place them at a disadvantage.
The most painful part of this whole process is analyzing your own businesses weaknesses. The sooner you take this honest look at your business the sooner you can change your weaknesses into strengths. Ask questions like: What does your company do that can be improved upon? What business strategies have you been inadvertently using that should be avoided? In what areas do your competitors do better than you? Have you been sticking to your original business plan, why or why not? What are the current market trends and have you been keeping up with them?
Now that you have gathered all of this essential information about both your own business and your competitors you need to be able to use this information to create a competitive advantage. The final two steps in this process are: Opportunities, and threats. During the next step in this process you will need to discover what opportunities your business has to increase its market share and become more profitable. You will also need to take a realistic look at the threats your business faces whether internal or external and how you can address those threats.
Part 2 Utilizing the Information
Now, we will take that information and use it to gain a competitive advantage over your competition. Before you are ready to compete with anyone, you must first improve on yourself. Look over the weakness you have discovered. Work on improving any areas that are weak, while highlighting your strengths. Once you feel stable, strong and prepared you are ready for the next steps.
Now you are ready to take advantage of openings in the marketplace. Look for opportunities to build your business. Can your business take advantage of niche marketing opportunities? What does your competitor’s customer base look like, and how can you attract those customers? Examine your competitions prices, hours of operation, products and services, and guarantees, and find ways to excel beyond them. Find out if there are new technologies available or new trends in your market that you can take advantage of. Then don’t just talk about the opportunities but make the changes necessary to take advantage of them.
The final step in creating a competitive advantage for your company is to be on alert for threats to your business. These threats can come in many different forms including economic downturns, overcrowded market places, or changing technology. Threats can also come from internal sources like cash flow problems, managerial or employee issues, or upkeep issues with a brink and mortar store front. The key to addressing these threats is to anticipate them well in advance of a crisis. After you have completed the analysis and changes required, in the SWOT program, your business should be strong enough to take on anything that threatens it.
In conclusion, by utilizing the SWOT program you can strengthen your business and position yourself in the market place to take on all competitors. Start by focusing on your strengths and minimizing your own business weaknesses. At the same time examine the competitions strengths and learn from them, while you avoid the same pitfalls and limitations they may have encountered. Then take advantage of every possible opportunity. Look at niche markets that are not reached by competitors, change your marketing message to connect with new audiences, and position your business to meet your audience’s needs. Finally, prepare for the inevitable threats that all business face. It is way too easy to get bogged down in the day-to-day reality of owning a small business. Don’t let yourself make the same mistake of tens of thousands of other small businesses and ignore your potential growth in the struggle for surviving today.
Read the full article here: evancarmichael.com
All the best!