Understanding the strengths and weaknesses of your product or service is key to building competitive advantage. A thorough product SWOT analysis will help you to identify.
- Strengths: what you do well?
- Weaknesses: where do you need to improve?
- Opportunities: what trends could you exploit to your advantage?
- Threats: what obstacles do you face?
Once you have a clear understanding of your product’s strength and weaknesses, you can use the results of the SWOT analysis in your strategic decision-making process. A product SWOT analysis can be helpful in any of the following situations:
- You want to understand how your product/service compares to competition.
- You want to understand how your product/service needs to evolve in response to competitive threats
- You want to understand what external factors could favorably or unfavorably impact your product/service.
- You want to benchmark a competitive product/service to see how it stacks up against your own.
How to perform a SWOT analysis
Internal Factors (Strengths and Weaknesses)
These internal factors in your table will be made up of things directly under your control as a business manager and company owner. It’s hard to take advantage of external factors before ensuring that your internal factors are on point. Luckily for you, internal factors are easier to identify, and they can be broken down into four easy components:
Financial resources, like income jobs, revenue, franchise, and investment opportunities
Physical resources, like your brick and mortar location, equipment, and other material inventory
Human resources, aka employees
Miscellaneous resources like current policies, programs, and procedures your business has developed. Any internal protocol tools that you’ve purchased, or business software systems to help with invoicing or client management (like Jobber) that you subscribe to would also belong here.
External Factors (Opportunities and Threats)
External factors are things your business cannot control. They can and do affect any type of business. Not all potential external factors will impact your business right now, but documenting them now will ensure you’re ready for them in the future.
Here are some examples of external factors outside of your company’s control:
Market trends, new products, and technologies, such as faster communication devices or software tools for business management
Potential threats of competition from new and existing businesses in your industry—this includes the potential for larger franchises to enter your market
Changes in customer needs, such as an increase in some service calls and a decrease in others
Legislative and economic regulations, such as impending minimum wage laws, health care legislation, etc.
Professional relationships with suppliers and anything that might change on their end