Why the Competitive Intelligence SWOT is Stuck in the 20th Century

A very typical request we receive at Primary Intelligence is for a SWOT analysis. Our clients want to know the strengths, weaknesses, opportunities and threats presented by a competitor or group of competitors in a marketplace.

Of course, this SWOT analysis has a place, but its value is more tactical than strategic. Sales guys should have access to a SWOT, but I don’t know that executives should make decisions based off of this kind of information.

The problem that I see with the SWOT analysis is the fact that a company will know where its current strengths and weaknesses may be, but doesn’t have any insight into the areas of change that will bring about the biggest improvement in win rates, market share and defeating the competition.

Below, you will see an example of a Strength/Weakness evaluation based on data from recent sales opportunities. Half of the data come from new business that was won and the other 50% come from opportunities that were lost to competitors: (click on the image to see a bigger version)

The data are sorted from biggest negative competitive gap (weakness) at the top to the biggest positive competitive gap (strength) at the bottom. The scores are based on a 1-10 scale where 1 is Poor and 10 is excellent.

If you were to make strategic changes in your company based on the data in this table, you would probably look at the weaknesses and evaluate the most effective ways to close the competitive gap.

But, would this make a difference? What would happen if you were to increase your performance in Overall Solution Cost or Understanding Needs by ten percent? (A 10% improvement would mean that you increase your score of 8.1 to 9.1) How much would your win rate increase? Would making improvements in your weaknesses correlate with a stronger competitive preference, or would you be pulling the wrong levers and pouring time and money down the drain?

Traditional intelligence looks at Strengths and Weaknesses
• Should you “fix” weaknesses or accentuate strengths?
• Strength/Weaknesses don’t always correlate with decision making.
• Where is your opportunity to increase win rates and market share?

In my experience, efforts to improve the biggest weaknesses rarely result in an overall improvement in market share and competitive sales wins. In other words, odds are good that most companies are wasting time and money by using SWOTs for strategic planning.

In my next post, I’ll show you a new way to prioritize your strategic plans, based on a more intelligent form of Competitive Intelligence and performance evaluation.

If you need more info on this topic, let me know (cdalley@primary-intel.com, 801.838.9600 x5050)

And, don't forget to register for my webinar on Thursday. Click here to register (all of the info is on the registration page).