It’s been a fascinating week of weather as Hurricane Irene pummeled the Mid-Atlantic and Northeastern states. Who could have imagined that New York City, the city that never sleeps, would shut down for an entire weekend – or that inland states, like Vermont, would suffer devastating flooding as a result of a “tropical storm”? In spite of sophisticated storm tracking, many communities were surprised by the storm’s path.
At times, leading a business can feel like preparing for a storm. What will today’s market bring? Do we have what it takes to stay ahead of our competition? We can never predict exactly what will happen in a competitive marketplace, but objective assessment and adequate preparation can mitigate these risks and strengthen your position.
An External SWOT analysis provides a simple, objective tool to assess your standing. Keep in mind that the External SWOT is only the first step in a true competitive analysis (which will be hashed out in greater detail as we move forward in my Sales Strategy Series). It’s similar to a normal SWOT (strengths, weaknesses, opportunities, threats), but uses an external lens to focus primarily on your competitors’ strengths and weaknesses as compared to your own. While internal SWOTs are advantageous in their own right, conducting an External SWOT allows you to size up the competitions’ capabilities to determine their advantages in your industry.
If you’d like to conduct an informal SWOT analysis for your company, click HERE to download a sample External SWOT template and follow the steps below:
- Identify your top three competitors and list them and your company name across the top of the chart.
- Starting in the left column, list the capabilities and offerings that are important to your buyers. The categories shown on the chart can serve as a guide, but start your assessment with a blank sheet of paper. It’s important to tailor this exercise to the specifics of your particular business and the challenges, services and demographics unique to your industry. While making this list, be sure you think from the buyer’s perspective.
- Fill in the Importance column. Ranking the categories by importance allows the assessment to reveal not only where your strengths and weaknesses lie relative to your competition, but also if you are strong in areas of relative importance. You may find it helpful to sort your categories so that they are listed in order from “most” to “least” important. Again, during this stage, think as the buyer and don’t bias the exercise by filtering your answers from your own company viewpoint. As the saying goes, our customers’ perception is our reality.
- The final step is to rank each competitor and your own company as either “strong” or “weak” in the categories you listed. To do this, you may need to conduct market research, visit store locations, contact former clients, etc.
- Stay objective throughout this exercise or hire someone to conduct the exercise for you. If you don’t feel like you’re getting open, honest feedback, you may find it helpful to use the exercise with smaller sub-groups of employees. At this stage, stay focused only on the Strengths and Weaknesses portion of the External SWOT. We’ll analyze opportunities and threats later in the competitive-analysis process.
Feel free to contact us if you’d like further coaching on how to use the External SWOT with your team. We would love to help you strengthen your sales strategy, brand, and overall market position.
We’d love to hear from you, so share your thoughts, insights or questions in the comments.