For individuals who are new to the field of intelligence gathering, be it competitive intelligence, marketing intelligence or business intelligence, there are some basic information product deliverables that should be mastered regardless of the industry.
These deliverables include:
- Competitor profiles
- Industry profiles
- Internal newsletters
- SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis
Of the four deliveriables, the first three items may be customized based on the needs of internal clients within a company. As result, gatherers can used specific templates to provide timely intelligence.
On the other hand, the SWOT analysis framework is rigid and may cause issues for some gatherers.
On a recent Google Plus stream post, I was reminded by fellow competitive intelligence professional, Ellen Naylor, that some competitive intelligence practitioners may not have the experience to perform a proper SWOT analysis. With a background in marketing, I took it for granted that anyone who is responsible for gathering information for business purposes should be able to collect the right details.
Individuals which are not familiar with providing information for SWOT analysis should be place themselves in a mindset to find details to reply to the following four key questions:
- What does the company do well? (i.e, Strengths)
- What can the company improve upon internally? (i.e., Weaknesses)
- Which situations can the company take advantage of? (i.e., Opportunities)
- Which situations should the company avoid? (Threats)
Below are some of the possible sources that an information gather may look at to gather such answers for the four core questions regarding a competitor.
What does the company do well? (i.e., Strengths)
On the surface, finding answers to this question can be easy. Companies are not too shy at making it known about what they do well on a frequent basis. Visiting their website will lead gatherers to discover certain aspects of the company’s strengths that it is utilizing to compete in the industry. A very good starting point to identify strengths is corporate reports (i.e., annual report, balance sheets, income statements, etc). Such documents can be provide insights in terms of what the company is current doing and which types of resources are being used to sustain the strong position in the industry.
What can the company improve upon? (i.e., Weaknesses)
Identifying weaknesses of a competitor is not an exact science and may cause some challenges, especially for researchers who are new to the industry. Unless you are a former employee of the competitor, pinning down the exact weaknesses may involve making assumptions that will have to be substantiated with facts. These facts can be found in financial statements (i.e. decreased sales levels) and articles written by industry analysts “in the know”.
It is advised that before commencing the research for weaknesses, be sure to talk to colleagues who are familiar with the competitors’ products and services and the industry as a whole.
Which situations can the company take advantage of? (i.e., Opportunities)
To answer this question, researchers have to be able to spot opportunities in the external environment that will aid the competitor in attaining their objectives. The opportunities can be in the form of prevailing trends in the industry or a gap left by other competitors in the marketplace in regards to products and/or services. Scanning the external environment for the opportunities should prompt gatherers to conduct a broad search of the web and premium content databases to uncover potential trends and gaps in the sector from articles and market research reports. Finding current industry outlook reports is another outlet to consider.
Which situations should the company avoid? (Threats)
Threats are the external factors that companies are always seeking to avoid. These factors can range from changes in consumer behavior to modifications in trade policies in countries. Such intelligence can be gathered via proactive monitoring of industry-specific news sources. Relevant information can serve as a basis to make informed decisions about the environment that the competitor is dealing with in the short and long term.
Conclusion
The SWOT analysis framework is one of the basic strategic assessment tools that information gatherers should be familiar with. The information that is gathered for the analysis is the foundation in which strategic options will be based upon. Failure to provide to right answers to the questions that is the foundation of the framework will lead analysts and decision makers to select the wrong avenues to obtain company’s objectives.
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SWOT is a good thing to share with Sales as well. Sales can do a SWOT of how a customer perceives your company versus the competition. It is a very tactical and practical exercise, which is usually done around the table/SKYPE versus on-line research.
There are various times when this can be done to think through the best action to take in a Sales situation: during account planning and also before responding to an RFP. Industry segment SWOT is also useful. For example how are we and our products/services perceived in the banking industry? This exercise can really sharpen Sales’ focus, and ideally should be done with someone outside of Sales such as competitive intelligence, marketing or even a consultant so Sales can’t be myopic and perform a “wishful thinking” SWOT.
Ellen,
Thanks for your comments, especially with the angle coming from the sales perspective.
I’d redefine the first two of the 4 questions into
• What does the company do better than competitors and the overall industry? What has improved on prior year? What do customers and other stakeholders say the company does well?
• What has got worse compared to prior year? Where do competitors and the industry outperform the company? What do customers / other stakeholders complain about or say the company does badly? What leads to customers leaving / switching?
The reason that SWOT often fails is that it becomes a subjective analysis where people pat themselves on the back and say “look at how well we’ve done” without comparing their blinkered perspective to reality. As a result what they view as a strength could actually be a weakness – hubris is NOT a strength.
Also, weaknesses lead to opportunities. Understand what led to the weakness and you can often spot an opportunity to reverse it and move into something new. Similarly a strength is ripe of attack – and so for every strength there is also a matching threat.
SWOT analysis takes a lot of thought to do well – and in fact one company’s strengths could be another company’s weakness. For example, BodyShop is famous for NOT using celebrities for endorsing their products. That’s its strength (or one of them). Conversely most competitors do use celebrities. If they copied Bodyshop’s strength and junked the celebrity endorsements they’d be creating a weakness as celebrity endorsement is part of their brand image. Without it, they’d find it tougher to compete. So SWOT analysis is not easy.
One approach I advocate is to ask 5 questions. The answer to each moves to the next question and a decision on what to do next.
1) Where do we want to compete? (i.e. which market, segment, country….)
2) What do we need to do to gain competitive advantage? (If you don’t know or can’t gain competitive advantage should be be in the market – so go back to question 1)
3) What resources do we need to gain competitive advantage?
4) What resources do we have? (If you don’t have the resources you need, what do you have to do to get them. If you can’t get them, you can’t compete so go back to question 1 again).
5) How do we change? (i.e. the ultimate question – what do we have to do next?)
Answering these 5 questions should enable companies to compete and requires a really objective look at the SWOT parameters.
Arthur,
Many thanks for adding depth to the post. Good elements to keep in mind when the next SWOT analysis is needed.
Hi Ian
As I have tweeted on this, I thought I might comment – hope that is OK?
SWOT is such a misused technique and yet when done as it was developed to do provides truly great insights. So for brevity, some key points about SWOT:
1. Strengths and Weaknesses are your UNIQUE strengths and weaknesses compared to your competitors. They are not a wish list! If they are not unique to your company, they don’t go on the list. It certainly makes these two lists quite short!! If you don’t have any unique strengths, it tells you something very loud and clear about your business and its future.
2. Opportunities and Threats are valid for the entire competitive environment and your competitors. They are not your company’s opportunities and threats! They are there for any player in your industry.
3. Your objective in the SWOT is to match your UNIQUE strengths and weaknesses to the competitive environment’s opportunities and threats in such a way as to identify key strategies that are available to your company only and identify a competitive advantage. There should be four boxes of strategies – SO, WO, ST, WT.
4. You can group these strategies together if they fit under an overarching theme.
Result of doing it the right way, key strategic themes that will enable you to compete in a smarter way and leverage your competitive advantage.
If you or anyone else would like further details, don’t hesitate to let me know.
Can’t tell you many times the light has come on for clients, executives and students… try it this way and let me know what you think.
Hi Babette,
Thanks for you feedback and insights. I will be the first to admit that my initial post above lacks depth. I could have gone further; however, I have learned over the years that some pure information gatherers are in need of “hand holding” when it comes to finding the right details for a SWOT and then after TOWS analysis. It was my intention to give a superficial approach of culling intelligence that can be used by decision-makers.