You may have heard the expression “Know your enemy” before. In business, it is equally important to know your competition. You can gain a competitive edge when you decide which path to take for your business.

This article will explain why it is important to profile your competitors, how SWOT analysis can be used for competitor insights and how you can get an advantage over other companies in the sector.

It is important to profile your competitors

Being a step ahead is a key part of business success. It doesn’t matter how much you know an industry or company, it is important to keep up with the trends in your industry.

It is important to first outline your knowledge about your competitors. What are their strengths and weaknesses? What are their weak points? What are their vulnerabilities? What are their threats? These are just a few of the questions you can ask to help you profile your competition.

Exercise: Growth Mapping Using Customer Profiling

The above graphic shows an adaptation of the traditional SWOT analysis. This is part of the Growth Mapper Framework and we use it to evaluate up to three local or online competitors, their strengths/weaknesses, as well as potential opportunities for your company. This analysis will help you identify the areas you need to improve your company’s competitiveness in the market.

A table is used to understand the strengths and weaknesses in competitors. This column describes the strengths and weaknesses of a competitor. It also shows where your competitors are stronger than you. The last two columns highlight opportunities and threats for businesses. We also note things you can admire in other companies or strategies that they have successfully applied that could be used elsewhere.

It’s important that you remain objective as you go through the exercise. You should not be too focused on your competitors’ quality or how they have created better experiences for customers than you.

It is good for your health to have competition. It’s healthy to have competition.

Strengths

A SWOT analysis’s strengths section focuses on identifying positive characteristics of a company. This section is important. You need to be honest with yourself. If you want to see results, you will need to believe in what you are doing.

It might be worthwhile to look at the work of other companies in the same field and compare it with yours. You should think about the reasons your competitors are successful in a particular area.

Are they lucky? To have more resources and staff? Are they more innovative than the rest? This will allow you to see how far or close your company is.

You will need to identify your competitors in order to complete the first section. You can choose to work on just one, two or three sections.

Weaknesses

This is where you will identify the weaknesses of your competitors. This is more difficult than identifying their strengths. You might have to think about what power they have in order to identify their weaknesses.

Are there any things they do that you could easily duplicate (or too easily)? Do you think you could replicate their success and make it better? They may have some weakness if they’ve been in business years and have never received a positive review.

This part of the SWOT analysis will help you to understand which areas your company should be focusing on when evaluating your competitors. It will be a great tool to help you evaluate your current strategy.

Opportunities

This section is the most difficult.

It’s an important part of a SWOT analysis. Without understanding your competition’s current activities, you won’t be able to capitalize on their successes.

You may be successful in one area but not another. That’s OK! This information can be used to help you identify areas where you need improvement. But for now, focus on what your competitors do well and the opportunities they provide. You know that even if your competitors excel at marketing, their products may be sub-par. If you offer better quality, they will switch to your services.

This section of the SWOT analysis can help you get new ideas on how to improve upon what is already popular with customers. It may even inspire some innovation.

This section will help you think about what your competition is doing well and where there might be positive changes in the future. You may be able to do similar things to your competition, so keep an open mind!

Threats

This section is the last of a SWOT analysis. This section is all about identifying potential threats. Threats could come from any source, including another company offering you a new idea or your customers hiring your services to do some work for them.

But, notice the difference between opportunities and threats?

Threats refer to things that could actually happen. Opportunities are about what will happen when you do something.

Remember that not all of the risks you identify will be realized. Only identify those that could have a real impact on your business’ success and profitability to get a clear picture of the world around.

Things I admire

We ask that you be positive and honest about your competitors, and to look at their successes.

This section will consolidate your thoughts and help you to understand your competition’s strengths, weaknesses, and what you admire about their products. This section of the SWOT analysis will help you to think about ways to improve your business and reach a wider audience-which is what everyone desires!

Now that you have learned how to benchmark your competitors, it is time to get out there and implement this knowledge. We want you to leave this article with a few ideas on how your company can be better matched (or even better) than your competitors.