How To Conduct A SWOT Competitor Analysis

As a business owner, one of the best things you can do for your business is not only to understand your strengths but also the strengths and weaknesses of your competitors by conducting a SWOT competitor analysis.

This knowledge allows you to position your business more effectively in the market by identifying opportunities for growth and minimizing potential threats so that your business can always be the better option.

One of the best ways to do this is through a SWOT Competitor Analysis.

What Is A SWOT Competitor Analysis?

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats—It’s a simple yet powerful framework that can give you deep insights into how your competitors operate, where they’re excelling, and where they may be vulnerable giving your business a better opportunity to thrive.

By understanding SWOT, you can make informed decisions about how to differentiate your business, capitalize on opportunities, and address potential challenges.

If you’ve been wondering how to conduct a SWOT Competitor Analysis for your business, look no further.

This guide is going to walk you through the steps to get it done.

1. Identify Your Competitors

Before you dive into the SWOT analysis, the first step is identifying your competitors.

Depending on your industry, you may have a mix of direct and indirect competitors:

• Direct Competitors: These are businesses offering similar products or services to the same target market.
• Indirect Competitors: These businesses may not offer the same products, but they still compete for the same customer’s time, attention, or money and are great to collaborate with.

Make a list of your competitors, both direct and indirect.

This list will be the foundation of your SWOT analysis, so take the time to consider all potential competitors—local in your area to global and small to big.

2. Conduct Research on Each Competitor

To perform a thorough SWOT analysis, you need to gather as much information as possible about your competitors.

This includes both qualitative (descriptive information via text) and quantitative data (numbers).

Here are some research methods you can use:

• Website & Social Media: Study their website, social media accounts, and content to understand their branding, messaging, and customer engagement. Some company’s share their financials publicly on their websites if you look hard enough.
• Customer Reviews & Feedback: Look at reviews on platforms like Google, Yelp, or Trustpilot to see what customers love and dislike about their products or services.
• Market Reports & Industry News: Use market research reports and industry news to stay up-to-date on your competitors’ movements, innovations, and any challenges they may be facing.
• Product or Service Comparison: Evaluate their products or services, pricing, quality, and features. How do they compare to yours?

The more comprehensive your research, the more accurate your SWOT analysis will be.

3. Analyze Their Strengths

Now, it’s time to actually start your SWOT by evaluating your competitors’ strengths.

These are the areas where your competitor excels, and it’s often the reason why customers choose them over others.

By understanding their strengths, you can identify ways to differentiate yourself and find gaps in the market.

Consider the following questions:

• What does the competitor do well? This could be anything from high-quality products, strong brand presence, superior customer service, or unique features. It may even be something about them and their personality or how they have marketed themselves. Example Joanna Gaines — people love her because of their tv show.
• What resources do they have that give them an advantage? For example, a larger budget, experienced staff, strategic partnerships, better marketing opportunities, or a loyal customer base.
• What is their reputation in the market? Do they have a trusted brand, a solid track record, or strong relationships with key influencers or suppliers?

Example strengths could be:

• A well-established brand.
• A broad distribution network.
• High customer loyalty or excellent reviews.

Write down everything that stands out for that competitor’s strengths.

4. Evaluate Their Weaknesses

Next, assess your competitors’ weaknesses.

These are areas where they’re falling short or where there may be opportunities for you to step in and improve where they’re lacking and falling short.

Weaknesses could stem from internal factors like poor management, external factors like industry trends shifting or even offers that they are not providing but are clearly needed.

Consider these questions to help with your assessment:

• Where are they underperforming? Is there a part of their business that isn’t as strong as it could be? Maybe their customer service is lacking, or they have outdated technology.
• What do customers complain about? Look at customer reviews to see if there are common complaints or frustrations.
• Do they have limitations in resources or capabilities? Are they unable to expand because of limited capital or personnel?

Example weaknesses could include:

• Inconsistent customer service.
• Limited online presence or marketing efforts.
• High prices or poor value proposition.

Write down everything that stands out for their weaknesses.

5. Spot the Opportunities

Opportunities are external factors or trends that your competitor has missed.

Identifying these opportunities can help you pinpoint ways to gain a competitive edge and position yourself to stand out and grow.

Ask yourself:

• Are there emerging trends they haven’t tapped into? This could be anything from technological advancements, market shifts, or consumer behavior changes.
• Are there underserved customer segments? Are there customer needs that aren’t being fully met by your competitors?
• Are there geographic areas or niches where they’re not focusing? Perhaps there’s a regional or demographic market that your competitors have ignored, and you can capitalize on it.

Example opportunities might include:

• A new market segment that’s underexplored.
• Technological advancements they haven’t adopted yet.
• Changes in consumer behavior that align with your business.

Write these opportunities down.

6. Analyze Their Threats

Finally, examine the threats your competitors face.

These are external factors that could hurt their business and, by extension, yours.

Understanding these threats helps you plan for potential challenges and develop strategies to mitigate them.

Consider these questions:

• Are there changes in the industry that could affect their business? This might include new regulations, changes in consumer behavior, or market saturation.
• Are new competitors entering the market? Watch for new businesses or startups that could challenge your position.
• What external factors could hurt them? For example, economic downturns, supply chain issues, or geopolitical instability.

Example threats might include:

• Economic downturn affecting consumer spending.
• Increased competition from a new player in the market.
• Rising raw material costs impacting profitability.

Write these threats down.

7. Put Your SWOT Analysis Together

Once you’ve gathered all your research and answered the questions for each SWOT category, it’s time to organize your findings into a clear and concise SWOT matrix.

This matrix should have four quadrants:

• Strengths: What does your competitor do best?
• Weaknesses: Where do they fall short?
• Opportunities: What opportunities could they be capitalizing on?
• Threats: What external threats could harm their business?

This visual representation will help you quickly see where your competitors stand and how you can leverage this information to improve your own business strategies.

8. Do Your Own SWOT

Now do your own SWOT & compare.

Write out your own strengths, weaknesses where you don’t feel you can provide what your competitors are doing and need personal or professional growth or to delegate, opportunities based on the comparisons of your competitors where you can stand out in your industry, and potential threats based on what you know from your competitors businesses so that you can be on high alert if they try to cut-throat you or make their business more appealing.

9. Plan And Develop Business Strategies Based on Your Findings

Now that you have a complete SWOT Competitor Analysis, it’s time to use it to develop actionable strategies that help you business grow and scale.

Think about how you can capitalize on your competitors’ weaknesses, defend against their strengths, and position your business to take advantage of emerging opportunities so that you become the threat and only option for that industry being an innovator where they are not.

For example:

• Strengths: If a competitor has a strong brand but poor customer service, you can differentiate your business by offering both a strong brand and exceptional customer service.
• Weaknesses: If a competitor’s product quality is inconsistent, focus on perfecting your own product or service to stand out in the market.
• Opportunities: If there’s an underserved customer segment, create targeted marketing campaigns to attract this audience.
• Threats: If a competitor is facing supply chain issues, you can highlight your reliable sourcing or develop partnerships to ensure consistency.

10. Revisit & Compare

When doing annual audits and planning in your business it is wise to revisit your SWOT Competitor Analysis to see what has changed and to help you plan and strategize your business for that current year.

Business is ever-evolving.

Conclusion

Conducting a SWOT Competitor Analysis is a powerful tool for gaining insight into your competition and positioning your business for success.

By understanding your competitors’ strengths, weaknesses, opportunities, and threats, you’ll be better equipped to make strategic decisions and stay ahead of the game to grow your business.

Remember, the key to success isn’t just knowing your competitors but knowing how to use that knowledge to your advantage.

By conducting a thorough analysis and implementing what you’ve learned, you can elevate your business and set yourself up for sustainable growth year after year.

Get started today—start analyzing, strategizing, and take your business to the next level!