A Product SWOT analysis is an assessment methodology that you can apply to your current products or services to better understand them and, if needed, reposition them in the market.
You can also apply a similar methodology to launch a new product or service.
You can find additional information on the SWOT analysis methodology here [https://www.swotanalysis.com/blog/what-is-swot-analysis-official-guide].
Conducting a SWOT analysis of your products and how they compare to those of your competition will:
help you clarify where you stand today vs. where you would like to be in 3 to 5 years
make you more aware of how achievable your target positioning is
allow you to figure out what you need to do in order to achieve it
How should you approach SWOT analysis for an existing product?
The product SWOT analysis aims to identify
the product strengths and weaknesses vis a vis the competition
the opportunities to improve its positioning
the emerging threats coming from current competition, new market entrants as well as from the evolution in consumer preferences and the technological change
strengths and weaknesses need to be assessed against
the narrow competition, i.e. competitors offering same or very similar products
the broader competition, i.e. competitors offering substitute products or services that address the same needs, but use a different proposition or business model (for example car rental, long term leasing companies or car hailing operators are broad competitors for car dealers selling new and used cars)
the analysis needs to identify the Unique Selling Proposition of the existing product (or potentially the lack of it)
opportunities need to clearly identify needs of the different customer segments that are not met in full or in part by the current offering. This will help you decide if the current product can be repositioned or extended to serve some of these needs
threats need to focus on actions by current competition (broad and narrow) that could undermine the product strengths, its USP and its current competitive position
threats should also cover:
the expected changes in the consumer preferences
the emerging business models (pursued by start ups), that aim to disrupt the industry
the impact of technological change (and other context change, e.g. duties, cost of other input factors) that could materially impact the company’s cost position, know how or service model
How should you approach SWOT analysis for a new product?
Conducting a SWOT analysis on a new product follows a slightly different methodology, as it predominantly focuses on the identification of the unfulfilled needs of customers (also called latent demand):
customers that are not buying the products or services that you and your competitors offers
customers that are buying them, but are dissatisfied, as they do not meet their needs in terms of price, product and service features and/or availability
You can identify latent demand in your industry, by conducting customer research focused on the products of your competitors and summarize it in a product SWOT analysis.
This will highlight opportunities for product or service innovation and help you in identifying the USP of your new product or service.
The detailed questions that you should answer in your assessment of an existing product
What does you product do? What are its key product features?
What does it do better than other products available on the market? A tiny bit better or much better? Which features stand out as being significantly better than competition?
Which customer segments need your products the most? How is your product helping them solve their problems? Which needs does it satisfy?
What is your product Unique Selling Proposition?
Do all customers perceive this USP? Why? Why others do not perceive it? Could you communicate it better?
What doesn’t you product do? Which are the missing features that your clients need the most? Are most of your competitors offering these features?
What does your product do worse than other products available on the market? Which features stand out on being materially worse than competition?
Do these weaknesses or lack of features matter, when customers choose to buy the product?
Do they impact the reputation of the product and the willingness of customers to repurchase it or recommend it?
What are the needs of the different customer segments?
Which product features and price point do they expect?
What level of service / service model do they expect?
Are all these needs covered by your product? For all the segments?
Or are there customer segments that are not yet fully covered or satisfied by the current offering?
Can you offer these segment a product or service that fulfills their need? Can you to this in a profitable way?
How does your product, price or service bundle need to change to serve them?
Can you serve them with the same product or do you need a dedicated one?
Can your product be offered internationally or beyond your current geographical scope?
What evidence do you have that consumers abroad will also like it? What do you need to make your product successful in another geography?
How is narrow competition evolving their product? How likely are they to launch a new product which is better than yours or more appealing to your target customers? Have they found a new USP?
Are some of the broader competitors successful at creating substitute demand for your products and services? What is their USP? Are there any barriers for you to be able to offer the same or similar USP?
Are there any start ups or new entrants that aim to disrupt the industry? How successful are they in their early endeavours? Do they have a USP? Is it sound? What can you do to avoid that they enter successfully into your market?
How are consumer preferences with regards to pricing, product features and service model changing in your industry? Over what time horizon could they damage your current product and service proposition?
What is the impact of technological change in your industry?
Are other business and economic factors likely to have a material impact on your industry (e.g. duties, offshoring, automation, self service,…)?
How are all the above factors going to impact your competitive position in terms of price, product features and service proposition?
Which customer segments are more likely to be impacted first? How can you nurture and retain them?
How can you interpret the results of your product SWOT analysis and use it proactively to change?
Here’s how you can interpret the results of your product SWOT analysis:
Understand in detail your product strengths, so you can better position your product in your communication initiatives and in any point-of-sale marketing campaigns
Work on your product weaknesses, so that they could become strengths in the future
Assess whether it is worth to pursue some of the opportunities you identified, by serving latent demand with product extensions or completely new products
Understand how to manage the potential threats of
competitors launching new products
start ups testing disruptive service propositions
Your product SWOT analysis and its conclusion and implications should be included in the overall strategic plan of your Company, which should help clarify:
where you are now
where you want to get to by the end of the plan (typically in 3-5 years)
which key actions and investments you need to make to get there
From theory to action
Once this vision is clarified and approved, you will quickly need to move from theory to action:
Define a clear product roadmap and a product plan, splitting it into “phases” and “waves”. For each phase of this roadmap, define specific project activities, deliverables and timeline
Be realistic in your timeline and effort assumptions! Getting things done always takes longer than anticipated
Focus on the “quick wins”: are there any actions that you can implement quickly and that will bring you tangible economic results? If so, prioritize them in the execution plan and, in parallel, work on implementing the product roadmap
Conduct a periodic progress review, both at the product level and at the Company level: perform a new product SWOT analysis at least every year, as competition can move fast and may force you to revisit your product priorities and roadmap
This is not easy, and will require a lot of time and effort, but you need to remain focused on the target: implementing successfully your product strategy.
View examples from the best companies and then defining your Mission based on your Purpose, Vision, and Values. Essentially - what do you ultimately want, why - how does this help people, and what values will be important to achieve it. Create your mission now.