The SWOT Analysis and Your OEM Customers
To make this example as relevant as possible, we’ll approach it from the mindset of a company reviewing a group of equipment manufacturers in its market. The analysis will review the inherent Strengths, Weaknesses, Opportunities and Threats for all the manufacturers in a given market. By doing this, the company can then itemize its best strategies to increasing its revenue and growing its market share – both with the equipment manufacturers themselves, and perhaps with the manufacturer’s end-user customer base. So how can this tool help identify these opportunities?
In order to answer this aforementioned question, consider the following: If servicing end-user customers with technical support is a cost most equipment manufacturers can’t justify, then this weakness of theirs may be an opportunity for your company. Your team can capitalize on this by providing that service to those end-user customers on your OEM's behalf. Remember, the SWOT analysis is simply a tool. How you use it will ultimately determine how successful it is in helping to grow your business.
To read about how a SWOT tool can be used to improve your customer service, please go here.
The OEM Customer SWOT Analysis
1. Strengths
Start with the inherent strengths of the manufacturers in your market. What are their core competencies, their reputation in the market and how do their own customers see them? Are some recognized as innovators and market leaders? If so, how does this compare to those who are seen as market challengers and followers? Which equipment manufacturer is recognized as the market leader and what information does your company have about their machinery in the market? Answering these questions will focus your list on your customers' greatest attributes. Afterwards, you'll expand your list to include how the market as a whole sees the core competencies of these equipment manufacturers.
2. Weaknesses
Think of the weaknesses the manufacturers have that your company may be able to capitalize on. In this case, your ability to capitalize means your company can bring a value-added service to these companies. Focus your list on issues pertaining to the OEM’s size. Are they too big or too small? What kind of financing options do they provide their end-user customers? Are they flexible with financing, or difficult to deal with? Most original equipment manufacturers become so large that they end up losing touch with their market. Your company can use these weaknesses to its advantage by reducing the manufacturer's cost to service their end-user customers.
3. Opportunities
The opportunities portion of the analysis should build upon your list of weaknesses. In this case, you want to focus in on those weaknesses that your company can turn into opportunities. The aforementioned example of the OEM unable to justify the costs of technical support (for their end-user customers) is a perfect example of an opportunity for your company. In this case, your company may be able to provide that service on their behalf. This increases your business with the manufacture, while adding another revenue stream. Perhaps the equipment manufacturer isn't willing to stock ancillary parts and consumables to support their installed equipment base. Is this an opportunity for your company? It can be if you’re willing to provide those parts for the OEM to their own customers.
4. Threats
The threats portion of your SWOT analysis should be focused on existing and future threats facing these equipment manufacturers. These threats could be from competing industries and technologies, the manufacturer's own suppliers, or it could even include threats posed by the recent global financial crisis and its impact on equipment financing. Your list should also include the threats facing your company should it fail to act. If your company doesn’t act, what impact will it have on your own customer relationships and your company’s market share? Don’t ignore this last portion of the analysis; it’s an essential aspect of succeeding with the SWOT analysis.
Growing business with an original equipment manufacturer takes a considerable amount of time and effort. Because the sales cycles are long, dealing with manufacturers can be difficult. Reducing these cycles often involves going outside your immediate market. In some cases, that means expanding that market to include your customers’ customers.
Expanding your market might involve entering into a strategic partnership with an equipment manufacturer, one where you reduce their costs to service their customers, while increasing your business with those same end-users. It’s done all the time, in all kinds of industries, and it's something your company may be able to do as well.
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