At university many of us have taken courses in which we have been taught how to conduct a SWOT analysis. It is a simple matrix through which you evaluate opportunity and competition with an angle to using it personally on assessing yourself or your business. SWOT stands for strengths, weaknesses, opportunities and threats. As an entrepreneur this is an invaluable tool in understanding how to position one’s businesses, which areas need to be developed, which core strengths need to be highlighted and what to be wary about. It gives a holistic picture of both external and internal operating environments. Sitting down and doing a SWOT analysis on your competition is something that I really enjoy doing with the teams that I work with or coach. It is a fascinating discovery session where you break specific competition down, and analyze the best way to approach them. There are several variations on how to use your SWOT sessions.
Internal Analysis: The first SWOT analysis that needs to be done is on your own business. It is imperative to understand ourselves and what we can and cannot do. What are our core competencies, and in what places do we need to develop further to compete on a broader level. Only after we have a keen understanding about these facets, will we be able to align them with current situations in the market place, and carve out a niche that will play to our advantage.
Industry Analysis: The next session should be with your team, this is when you break down the industry that you want to operate in. This is very important from a holistic positioning point of view. One needs to be acutely aware about the opportunities and threats prevalent in the current market place. What are some areas of the developed core competencies that are viewed as strengths ,and where is the industry currently being under served. This helps the entire team to brainstorm ideas about where they should position themselves optimally so as to serve a relevant segment.
Specific Competitor Analysis: I usually like to do several of these sessions where we break down specific companies that are viewed as competition in our niche. I choose a company that is leading the industry, some operating in the middle quartile and some in the lowest quartile. These sessions provide much insight into best practices, specific segments where we could use our strengths to our advantage, how our competitors view us, where they are the most vulnerable and possibly even where synergies could be created. If you want to make your way to the top, you have to have a very good idea about who you have to beat.
Understanding your competition is critical in formulating a winning strategy. Being a startup we are often awed by the size, resources and abilities of larger competitors. Doing a SWOT analysis enables us to develop a balanced point of view that is pivotal to our success.