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Marketing & Competitive Intelligence FAQ
SWOT Analysis
How do you compile a SWOT analysis on competitors that will allow me to isolate the areas I need to focus on? I already have performance measures and information such as
a) finances and financial strength
b) marketing & sales initiatives,
c) key people and their skills and experience.
d) the company's operations, product quality, and strategies.
There are a number of approaches to this - simple and more complex. My favourite is one that is based on that described by Philip Kotler in his book on Marketing Management, Analysis, Planning, Implementation and Control. For this, make a list of ALL aspects of the company you want to look at:
- Finances (broken down by liquidity, productivity, strength, etc.);
- Marketing (price, promotion, planning, distribution, sales activity, product quality, new product development, etc.);
- Operations;
- Personnel
and so on - all broken down into components.
For each aspect, rank the items against performance prior year, against your industry and against your own company. Give a rank for 5 for much better, 4 for better, 3 for the same, 2 for worse and 1 for much worse. Ignore all aspects with a 3 rating. This is neither a strength nor weakness. Examine all the 5 ratings - these are major strengths - and 1 ratings, which are major weaknesses.
If you are comparing against your company, a 1 in a competitor means that you have a major opportunity to use your strength against the competitor. A rating of 5 means the competitor is MUCH better than you. You need to focus on improving - but this area will be difficult to attack as the competitor should view this as key strength and protect himself. So until you can improve - you can't attack here. The 4 ratings however can be attacked - especially as it should be easier to improve your performance.
Similarly, compare yourself or competitor to the industry as a whole. Strong weaknesses can be attacked but strong strengths lead to industry leadership. So these are areas where you need to improve. Looking at the relative position for prior years gives an indication of strategy as it may show where the competitor has prioritised.
This is a very brief answer. We've also prepared a more in-depth white paper on SWOT analysis (and gave workshops on this topic at the SCIP 2003 conference in Los Angeles and the SCIP Europe 2003 conference in London) and also given additional information in question 24 which looks at both SWOT and PEST analysis. Contact us for more information on how we can help you with SWOT and business environmental analyses.
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Quick Tip: Entrance
Quick Tip
Robert Smith was devastated.
As the owner of a small retail business selling various groceries he had always recognised the threat posed by major supermarket chains such as Tesco, Walmart, Carrefour and the like. Now a branch of Tesco had opened next door, and business was tailing off.
He told all his friends how worried he was - and that things couldn't possibly be worse. And then a branch of Walmart opened on the other side. Robert now told friends that he expected to be out of business within the year.
His friends were really surprised when they met him a few months later - getting out of a top-range Mercedes wearing an expensive suit and with a big smile on his face.
We thought business was so bad that you were about to go bankrupt. What happened?
Robert replied: Well that is what I thought. And then I remembered that one secret to effective marketing is to make sure that your potential customers know where to find you. So I changed the name of my company. Come and look!"
Robert's friends followed him to his shop, sandwiched between Tesco and Walmart. Over the front, the new name was posted in big neon letters ENTRANCE
How do you promote your business? Can potential customers find you? Do your marketing promotions send people away, or invite them to come and buy. You need to ensure that all your marketing promotions allow customers to enter.
(For more marketing and business humour, visit our humour pages)
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