Today, i want to share with you a simple but vital secret to keeping competitors at arm length. This secret is so simple that many small business owners ignore it. This simple secret is called a business SWOT analysis. Now what is a SWOT analysis?
SWOT simply stands for Strengths, Weaknesses, Opportunity and Threats. SWOT analysis therefore is the process of accessing the strengths, weaknesses, opportunity and threats of an industry or organization. A SWOT analysis is so important that it has to be conducted frequently on a business.
Now how can a SWOT analysis help you dominate a niche market?
By conducting a SWOT analysis, you are digging up strategic information about your business, industry or your competitor. This strategic information is so important that it can make or break your business. Conducting a SWOT analysis is simply unraveling some underground facts about your competitor’s business, your business and your industry and using these same facts to strategically position your business for total dominance. Below are the four factors of a SWOT analysis:
The first thing to consider when analyzing a SWOT is the strength of a business. Your business strengths can be a competitive advantage if fully maximized. You can discover your business strength by asking the following question: What do i have that other businesses don’t?
Business strengths can be divided into two; internal and external strengths. Internal strengths are the ones your business have total control over. You can manipulate them to your will. They include brand name, business connections, capital base, management team, customer loyalty, exclusive right, patent, trademark or copyright protection.
External strengths are the ones you have limited control over. They are opportunities which you capitalized on to create a competitive advantage. They include trends, political situations, economic situation, and government policy. Anything that puts your business at advantage is strength.
“To obtain maximum effectiveness, you must use your strengths at full capacity to exploit your competitor’s weakness.” – Sun Tzu
Your business weaknesses are loopholes which your competitor could exploit if discovered. You must conceal your weaknesses and work to strengthen them. It’s worthwhile you know that the strengths listed above can also be your business weakness if they are maximized by your competitors.
Opportunities are simply factors or situations you can leverage to gain undue advantage over your competitors. Please note that opportunities abound in every industry but it’s up to you the entrepreneur to identify such opportunities and utilize them to the fullest.
Your primary duty as an entrepreneur is to identify opportunities and convert them to strengths. If you don’t identify and convert them, they might turn out to become a threat or business weakness.
The last but most important factor to consider when conducting a SWOT analysis is the business threat. I call the business threat the most important factor because if ignored, your business is doomed. Business threats are factors that make your business endangered and if not curtailed, your business will become extinct.
The solution i recommend to curtail business threats is advanced preparation, avoidance, strategic alliance or instant elimination. Examples of business threats are trends, technological changes etc.
For instance, the internet was a trend that posed an opportunity to some businesses and a threat to others. Just as some companies leveraged the threat of the internet to their advantage by means of alignment, your business can also do the same.
In conclusion, these are the four keys you can leverage to gain a stronghold on your niche or industry. Analyzing your strengths, weaknesses, opportunities and threats constantly will help your business stay ahead of the game in your industry. I wish you good luck as you use these tools of market dominance to your business advantage.