To determine your business's position in the competitive marketplace, in addition to analyzing your strengths and weaknesses, you must also consider opportunities and threats.
Consider opportunities and threats
Strengths and weaknesses are usually factors that a business can control. But when you look at your competitors, you also need to check to see how well they are prepared to deal with factors that are beyond their control. These factors are called opportunities and threats.
Opportunities and threats can exist in many areas. They can be technological developments, regulatory or legal influences, economic factors, or even the emergence of new competitors.
For example, a photo shop needs to know how its competitors are preparing to deal with the advent of digital photography. Or a business that sells products over the Internet should analyze how its competitors are preparing to deal with cybersecurity.
An effective way to do this is to create a table listing your competitors and the external factors affecting your industry. Then you can see how they might respond to opportunities and threats.
Determine your location
Once you have identified your competitors’ strengths and weaknesses, you need to determine how you position yourself relative to them. This can be seen in part from your analysis, but it also requires a thorough study of your own business.
The most effective way to do this is to conduct a strengths-weaknesses, opportunities-threats analysis of your business.
Rank your business in each category in the same way you rank your competitors. This will give you a clearer picture of where your business fits into the competitive landscape. It will also help you identify areas where you need to improve, and what aspects of your business you can leverage to win more customers.
In short, look for ways to leverage your strengths and take advantage of your competitors' weaknesses.
