In this post we will show you how to define part of your Business Profile. Included in the post you can find;
“If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained, you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.”
It’s not every day we kick off a blog post about marketing with a quote from The Art of War. And we know Sun Tzu wasn’t talking about battling for customer attention and search rankings – but he has a point!
If you understand your competitors and your own business in relation to them, you’ll be better placed to come out on top. That’s why the third part of our nine-part Growth Mapping framework is about helping you “know your enemy” through Competitor Profiling.
Following on from profiling your customers, our growth experts use several interactive exercises to pinpoint your nearest rivals’ strengths and weaknesses, before looking at opportunities for (and threats to) success. And in this post, we’re giving you a quick look at one of those exercises.
Here, you’ll learn:
- Why profiling your competitors is crucial;
- How to use a tried and tested SWOT analysis to mine for competitor insights;
- And how doing so can give you a competitive advantage.
Plus, at the bottom of the page, you’ll find a free worksheet download to help you map out your own competitor SWOT analysis.
Ready? Let’s go.
Why does profiling your competitor matter?
To understand why competitor profiling is so important, it’s worth returning to Sun Tzu for a moment. In that quote up top, he’s basically saying that if you understand your opponent’s strengths and weaknesses alongside your own, you’ll be in a stronger position to outmanoeuvre them on the battlefield and guard against complacency in your own ranks.
Now, let’s replace the battlefield with the internet. Knowing your online “enemies” lets you identify where your business sits in the competitive landscape. And the following exercise can help you better understand why customers might buy from your business over your rivals – or vice versa.
Exercise: profile your competitor with SWOT analysis
In the above graphic, you’ll see an adaptation of the traditional SWOT analysis, often used as a business planning or marketing planning exercise.
As part the Growth Mapper framework, we use this to assess three of your local or online competitors. You could do this with one competitor, or four, five, six, seven – it’s up to you. We think three introduces a nice bit of variety to the exercise without being overwhelming.
So, these are the companies you typically battle with when it comes to winning new customers, and we want to understand their strengths and weaknesses, along with opportunities for (and threats to) your business. And we use the last column to note the things you admire about your competitors. That means you need to take off your business owner hat and look at your rivals with honesty, objectivity, and respect.
Want to see it in action? Below, we tackle an example competitor SWOT analysis with three made-up companies: ABC One, 123 Trading, and ACME Products.
As we mentioned earlier, you must try to remain objective when running through this exercise because you want to extract the best insights you can. If you’re blinkered to your competition’s quality, you can miss out on a lot of valuable, actionable information.
Try to be as honest as possible. Your competitors are there for a reason, and it’s healthy to have competition. It pushes you to be better.
Let’s start by looking at our competitors’ strengths before working through the rest of the exercise.
In this first column, you’ll want to appreciate where your competitors are stronger, better, or just plain different (in a positive sense) to your business. Using our fictitious companies as examples, we identify the following traits:
- Heritage and reputation: ABC One is the dominant force in the industry. They’re well-established with lots of clients, a high-quality product, and loads of five-star reviews.
- Customer service: 123 Trading provide customers with an experienced team and a user-friendly website to deliver exceptional service.
- Useful online features: ACME Products use their shiny new website to stand out from the crowd. They’ve also got an engaging product pricing calculator to attract and convert leads.
Ultimately, acknowledging these qualities can help you figure out if you have gaps to close or improvements to make with your own business.
Next, you’ll want to pinpoint where your competitors are weaker than your business (and what your own strengths are in relation to them). This isn’t about being hypercritical for the sake of it. It’s about highlighting potential vulnerabilities among your competitors before figuring out how to exploit them.
For instance, we could pick out the following flaws in our example companies:
- A lack of agility: ABC One is a huge company, which gives them market share and reputation. But it also means they can’t move as quickly as a smaller, more agile company. This could stop them from launching new products or entering new markets just as nimbly as other businesses.
- A lack of innovation: 123 Trading keep churning out the same old product year after year, never changing or improving.
- Low product quality: ACME Products make an inferior product to our own. We’re not taking a cheap shot, but instead, we believe we can back up this claim by looking at the quality of their materials and real customer reviews.
By identifying fundamental weaknesses in your competition, you can position yourself better in the marketplace as a quality alternative.
Opportunities & Threats
In a traditional SWOT analysis, you’d answer these questions yourself in far more detail.
However, in this version, you’re not privy to the insight and knowledge of your competitors to fully understand the opportunities and threats facing them. Instead, we look at opportunities through the lens of the weaknesses we’ve listed previously.
Here’s what that might look like:
- As we discovered under weaknesses, ABC One is a large, cumbersome organisation. This could allow us to show off our speed and agility in comparison.
- 123 Trading’s offering lacks innovation, so we could use videos to highlight the innovation of our own products.
- ACME Products sell an inferior product to our own. That means we could create an honest head-to-head product comparison to highlight our product’s superior quality.
Likewise, in terms of threats, these are usually external factors in a typical SWOT analysis. However, in this version, we’re looking at things your competitors are doing well that could pose a threat to your business.
So, that might look a little something like this:
- ABC One’s main threat is their market dominance. This could make it more time consuming and expensive to attract customers and hit our growth targets.
- 123 Trading’s experience in the industry gives them a leg up on less established competition. This could require additional investment in marketing to close the reputational gap.
- ACME Products’ new website has the industry all a buzz. This could set the standard going forward, meaning extra marketing spend on a website rebuild to meet the target customer’s newly elevated expectations.
What I admire
In the final column, we ask you to be honest and positive about your competitors and look at what they’re doing well. This section is all about consolidating your thoughts to make sure you understand where your competitors might have an edge, what you like about them, or what you think is admirable about their products, service, or approach.
The end goal here is to come away with several ideas for how you can match (or better) your competitors.
Key Takeaway: Profiling your competitors is a truly worthwhile exercise, as it can help spark new ideas, tests, or initiatives to grow your business. It gives you a chance to look at things from a different perspective and gauge your business’s position in the marketplace against your competitors’ strengths and weaknesses.
We recommend doing a competitor SWOT analysis once or twice a year to keep tabs on your closest rivals – especially if new competition enters the market. Keep learning from those around you and exploit the fine margins for victory. Sun Tzu would be proud.
Try the Growth Mapper today
We’ve designed each section of our Growth Mapper framework around a critical part of your business growth. We start with the basics and drill down into the details, giving you a clear picture of the opportunities and challenges moving forward.