In the first post in our series about edging out your competition, we talked about determining who your competitors are, both the obvious and the not so obvious. Once you know what you’re up against, you can figure out what to do about it. This is where a SWOT analysis comes in handy: what are the strengths, weaknesses, opportunities, and threats of each competitor?
Strengths. First, you need to determine the competitor’s unique selling proposition (USP). If it’s truly unique, it will probably be your biggest obstacle. But if you can chip away at it, either through your product itself or through your marketing strategy, you can probably siphon away some of their customers.
Speaking of marketing strategies, determine what your competitor does well and what you can apply to your own marketing. Factor in other strengths as you evaluate your competitor as well, like how customers feel about them, how well their business model works, what range of products they offer, etc.
Weaknesses. While your competitor’s USP may be tough to overcome, their biggest weakness may be your biggest opportunity. What markets are they not going after? This may be particularly relevant to your indirect competitors. If there’s a pool of potential customers that they’ve either missed or ignored, go after them!
Likewise, if you can pinpoint what current customers dislike about them—and then determine how you can offer them something better—use this to your advantage in your marketing strategy.
Opportunities. Using what you know about your competitors to create opportunities is an incredibly useful skill. To do this, go back to their weaknesses and spin them into positive opportunities for your own business. What target audiences aren’t being served? What products aren’t being offered? What marketing strategies aren’t being used?
What are your competitors doing now that you can do better? How does your marketing respond to their marketing? What mistakes have your competitors made that you can avoid and learn from? The answers to all of these questions are opportunities to be seized.
Threats. Your competitor’s USP may simply be too persuasive to compete with. Or another competitor may offer a similar but less expensive product. You may not be able to spin opportunities out of these threats, but you definitely don’t have to stand idly by.
This is why doing your homework is so important: the better you know the threat, the better you can respond to it. If you know that, 9 out of 10 times, the casual motorcycle rider is going to buy a bike from a Harley dealer instead of a bike from your boutique shop, you can respond to that threat by not wasting your marketing efforts on them and adjusting your strategy. For instance, target the motorcycle enthusiast around tax time, convincing him or her to spend their tax refund on a new bike rather than that big-screen TV.
Check back for the next post in our series!