Tesla, Rivian, and Toyota all make electric vehicles, but the way they perceive their respective roles in the EV market (and the way prospective purchasers perceive each brand) couldn’t be more different.
Each business has different strengths…
- Tesla: Elon!
- Rivian: Outdoor / adventure focused
- Toyota: Decades of consumer trust, infrastructure
- Tesla: Elon again! (On a more serious note, issues with quality)
- Rivian: Supply chain and manufacturing woes
- Toyota: Perceived as a traditional car manufacturer
… which creates unique opportunities for expansion and presents different threats or vulnerabilities.
In order to win in a given market, a brand has to develop an unbiased understanding of where it stands in the competitive landscape, where it has opportunities to grow, and how it could all come crumbling down.
There’s no better way to develop this critical context than by using everyone’s favorite acronym-fueled framework: the SWOT analysis.
In this post, we’ll:
- Define SWOT analysis
- Go super deep on each component (which are, of course, Strengths, Weaknesses, Opportunities, and Threats)
- Create a framework for conducting your own SWOT analysis
Let’s get to it.
What is a SWOT analysis?
Yes, we know the concept is almost offensively simple. But you need to leave your preconceived notions at the door. From the highest levels of the c-suite to the fresh faces announced in Slack just this morning, evaluation is a critical lens through which to view a business objectively.
Whether you’re trying to evaluate your position within the market, the performance of a new initiative, or really anything else about a business, you can use a SWOT analysis to build this lens.
SWOT Analysis Definition
A SWOT analysis is a competitive analysis tool that allows you to dig into a business’s strengths and weaknesses, and explore the opportunities and threats in a given market.
It can be conducted on your business or on that of a competitor. Thanks to this versatility and its relative simplicity, SWOT analysis is a shockingly robust competitive intelligence tool that can help form the foundation of your growth strategy.
How do you write a good SWOT analysis?
We’re going to break the record for “blog post with most rampant use of the words ‘unbiased’ and ‘objectivity,’” but those are the keys to a “good” SWOT.
If you aren’t honest in assessing your business or that of your stiffest competition, you might as well save yourself some time. If, however, you’re ready to plumb the depths of your competitive landscape, let’s take a closer look at the four pillars of the SWOT analysis.
Heads up — if you want to see how the experts write their SWOT analyses, head over to the Competitive Advantage Academy Accelerator Course to hear how August Jackson, VP of Market Intelligence and Competitive Strategy at Deltek, uses SWOT analysis to predict the future.
What are the 4 areas of SWOT analysis?
Breaking news: Knowing what you’re good at is really valuable.
Measuring your strengths helps you analyze where your company is succeeding. Why is this helpful? It shows you what to lean into, the potential moats you’ve built that’ll stave off competitors (or could with a little more elbow grease).
Your strengths might include (but shouldn’t be limited to):
- Successful product features
- Strong company management
- Overall growth
- Customer success stories
- Campaign successes
To compile your list of strengths, consider the areas where you are uniquely skilled beyond other companies in your space.
Just remember — if you’re using a SWOT to analyze a competitor, this can be the most challenging section to complete without bias.
This isn’t a sales battlecard for a rep who needs to know where to stick the knife and how hard to twist. Your competitors have strengths too, and failure to acknowledge that simple truth undermines this entire exercise. If they didn’t, you wouldn't be conducting a SWOT.
So, fill out their strength section following the same mindset that you used when filling out your own. Where do your competitors excel that positions them above other players in your space? (Pro tip: Lean into G2 reviews and the like to try to use the voice of the customer here.)
Weaknesses can be analyzed similarly to strengths.
Ask yourself: What’s standing between your business and unmitigated success?
You might consider:
- Missed goals
- Unsuccessful product launches
- Customer churn data
- Financial information
… along with any other areas that you believe could use improvement.
It may be tough to pinpoint your weaknesses, but all businesses have them. Taking a hard look at your shortcomings (and then using that information to drive change) is a simple-yet-valuable way to establish business growth. High ROI for a little self-reflection, not a bad deal!
When you’re analyzing your competitors’ weaknesses, you can take a look at their business model, customer reviews, and press coverage to gather intel on where they may have fallen short. Perhaps they don’t have the same robust product features you do or don’t have a well-rated customer success team, weaknesses that are great to call out in your analysis.
Regardless of who you’re SWOTting, the weaknesses section shouldn’t read like the transcription from a mid-aughts Comedy Central roast. “Weaknesses” isn’t about outright negativity in the name of amplifying strengths through juxtaposition. It’s about identifying opportunities for improvement and the factors underpinning perceived threats.
Now for the fun stuff. The Opportunities quadrant is where you analyze market changes, positioning them as paths to growth. This section of the SWOT is the hub of potential for your business but it needn’t exist in a vacuum.
Maybe a major competitor just closed their doors. Perhaps a new bill is about to set off regulatory changes in the market — by identifying these opportunities, you could be the first to take advantage and change your product to meet the latest rules.
Think about the strengths and weaknesses sections of the analysis you just ran through. Is there an area where you could invest more resources to match your competitors’ efforts?
Leverage the same tactic when analyzing a competitor. Maybe they lack key functionality (weakness), but they recently gained some funding (strength), so now they have the opportunity to build a more competitive feature. It’s important to analyze each competitor against the entire landscape to look at what opportunities are in store for their business.
And finally, the part everyone dreads.
Nobody likes to meditate on their own mortality. But if you want to thwart competitors’ attempts at gobbling up your hard-earned market share, it’s a necessary evil.
Compile a list of threats you’ve uncovered through your myriad market intelligence efforts.
Not just “X competitor has a better product.” You have to dig deeper. Think through potential market shifts, economic downturns, emerging competitors, and other factors that could hurt your business. How do your competitors and market, as a whole, pose a threat to you?
Consider things like overarching market sentiment and new advances in technology. (You better believe that somewhere in the bowels of Shell headquarters is a SWOT analysis citing electric vehicle adoption rates in the “Threats” quadrant.)
Quick reminder: If you’re running a SWOT on a competitor after doing it for your own business, you may have identical Threats sections. This is totally normal. Afterall, you operate in the same landscape. The same comet wiped out all the dinosaurs. Keep in mind though that for indirect competitors — those with whom you compete for customers but on a different playing field — there may also be threats that are totally unique to them specific to them.
Creating Your SWOT Analysis in 5 Steps
Step 1: Determine the scope of your SWOT.
Your SWOT should start with one why, and two who’s.
- Why are you conducting this exercise?
- Who are you SWOTing?
- Who needs to be involved?
The first question focuses your analysis — yes, you could conduct a general SWOT focused on all facets of your business, but those would be some meaty quadrants. Instead, consider something a little more laser-focused.
If you’re launching a new feature, for example, you might want to conduct a SWOT analysis to better understand the current market for adjacent solutions, versus focusing on every competitor for every feature in your product suite.
The who’s are much more straightforward — are you conducting this analysis on your business, one of your competitors, or, perhaps, both in succession for the sake of comparison?
And finally, in order to conduct the most thorough analysis, you need to identify which internal stakeholders should have a hand in creating your SWOT analysis. There’s a fine line between valuable insights and too many cooks; we suggest erring on the side of a tight-knit group.
Step 2: The setup.
Let’s talk about templates.
What your SWOT analysis looks like — meaning the physical form it takes — is totally up to you. Analytical minded folks might prefer a spreadsheet. Freer thinkers (or those engaging in a particularly collaborative SWOT) might consider something like Figjam.
If you’re at a loss from a structural standpoint, here’s a little something to get you started:
Step 3: Take an honest look at yourself.
Now that you’ve identified the scope of your SWOT, the parties involved, and how you’re going to organize your findings, it’s time to get down to business.
Here are some questions to help you find strengths worth citing:
- What value do you provide that can’t be replicated by anyone else in the market?
- What do your customers love about your product?
- What data do you have access to that your competitors do not?
And here are a few questions to help you figure out your weaknesses:
- Why do your customers cancel or churn?
- What are the biggest challenges in your sales cycle?
- What’s holding you back from accomplishing the things you want and/or need to accomplish?
If you’re looking for a little more inspiration, be sure to check out our SWOT analysis questions resources.
Step 4: Synthesize strengths and weaknesses into opportunities and threats.
Now that you’ve compiled your business’s strengths and weaknesses, it’s time to focus on opportunities and threats.
Opportunities exist at the inflection point between strengths and weaknesses. You know what you’re great at. You know where you’re lacking. Now think about how you can apply your existing strengths in new and/or innovative ways to eliminate known weaknesses.
Some of the questions you could ask yourself to identify opportunities might include:
- How can you turn promoters (NPS) into brand evangelists?
- How can the voice of the customer be infused into our messaging more effectively?
- Are departmental resources being deployed in ways that address empirical business goals?
Finally, we come to threats. Threat identification is more existential than tactical, and might include asking questions like:
- What are some of the external forces cutting into your bottom line?
- Are there any emerging technologies that undermine the perceived value of your business?
- In what ways might your weaknesses get exposed or exploited?
Step 5: Put it all together!
You’ve SWOTed, now what?
Here’s how to deploy your findings from each quadrant:
- Lean into your strengths: If you’re sitting on billions in ad spend data, figure out how to deploy it to create powerful insights that give your customers an unfair advantage. If you make the best Detroit-style pizza in the world, figure out how to ship it without compromising on quality.
- Mitigate your weaknesses: All weaknesses are not created equal. Some are easy to fix (shifting your messaging based on NPS feedback), others might require callousness (nuking a product you launched years ago that’s burning through money. Looking at you, Alexa).
- Pursue opportunities: Take everything we said about leaning into strengths and apply it to net-new opportunities with a little less zeal.
- Cushion against threats: There might be nothing you can do about the end of the world as we know it, but for less existential threats, there could very well be angles that allow you to turn lemons into lemonade (or just keep the lemons at bay).
Fueling your SWOT analysis with competitive intelligence
Performing a SWOT analysis on your own business as well as your competitors is a valuable competitive intelligence exercise that’ll help you take your business to the next level. You’ll see where you excel, where you need work, and can plan your next moves accordingly using a competitive strategy.
The findings from your SWOT analysis (competitor edition) can also be used to enhance sales enablement material like battlecards and competitor profiles, reinforcing your strengths and digging into your competitors’ weaknesses. Give you and your team the competitive edge needed to stay one step ahead of the competition: Conduct a SWOT analysis today!
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