Wondering how to acquire new customers and defend your existing customer base from competitive attack? Do you have a crisp, clear understanding of your position relative to that of your competition?
Analyzing your situation relative to your competition and environment in a way that leaves no doubts about the most productive opportunities, vulnerable customers and trouble areas is a great way to build a competitive edge that attracts new customers and generates more loyalty and revenue production out of that valuable customer base your competitors’ are eyeing.
Today, there are many analytic tools that help you do just that, however, there is one Granddaddy of them all that is among the most widely used, successful tools available. And it’s easy … kind of. It’s an analytic tool called a swot analysis. Swot is an acronym for:
What is it?
A swot analysis is an analytic tool that assists you in determining your highest resource priorities to capitalizing on opportunities, thwart competitors’ initiatives, identify and exploit advantages and shore up your weaknesses. It helps you to create clear pathways to business improvements with the highest ROI – return on investment.
Very basically, it is a diagram of your business situation. More precisely, a swot analysis is a four-quadrant diagram that summarizes the most potent and essential knowledge that you have about your situation … and how it relates to your competitors and environment.
And finally, a swot analysis is a relatively painless way toinstitutionalize knowledge so that it is readily accessible to others who have a need to know and who can help advance the quality of knowledge it imparts. It is a simple yet elegant way to build intellectual property among key team members.
When done right, a swot analysis has the effect of organizing a lot of critical thinking about your business situation in a straightforward manner. The visual format used is crisp and it keeps you focused. That’s pretty slick for an old-fashioned tool, right?
Why is it so popular?
Well for one thing it is relatively simple. Notice I didn’t say easy. But perhaps the most important reason for the popularity of a swot analysis is that it requires no fancy software, skills or specialized training … other than pushing your brain to the limit. It delivers a lot of value for the effort involved and it has many applications throughout your business.
- Frequently, critical business intelligence is fragmented throughout a company … and in our minds. This has the effect of slowing down and reducing the quality of your decisions.Organizing the critical intelligence in a swot analysis enables you to maneuver proactively and defensively with better results. Your Benefits? Time, money and market advantage.
- Another reason for the sustaining popularity of a swot analysis is the succinct visual summary it provides. When it’s completed, your swot analysis is summarized in a highly visualcommunication of key learning that is easy to digest and use. When was the last time you saw a powerful one-page business analysis?
- The process of building a swot analysis is almost more valuable than the finished results. The stimulating dialog that it generates almost always produces a side benefits in developing better informed, sharper and more competitive key team members at the end.
- And finally, the swot analysis is really popular because it isactionable. At the end of the analysis you can clearly look at your swot diagram and see where you can take action to defend your weak areas, capitalize on strengths and opportunities and thwart competitive threats.
Many side benefits accrue from doing a swot analysis too, such as: sharpening your evaluation and decision skills, building morale and momentum on your team and stimulating creative business thinking. Some people like the swot analysis approach so much they use it in for the personal side of their life as well!
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Reprinted from Brain Food – an online resource focusing on creating competitive success. Brain Food is on the web at: http://www.bishopmarketresources.com