How to Perform an Internal, External and Competitor Analysis

It is essential for your business to know the competition within the industry you are working in, to remain competitive.

Identifying consumer and industry trends that could affect your business is also important as you need to be able to adapt to compete in the market, and identify opportunities for growth.

There are a range of tools that can be used to analyse internal characteristics of your company, and the external environment.


SWOT analysis is a tool used to assess the internal and external environment. SWOT stands for:

  • Strengths
  • Weaknesses
  • Opportunities
  • Threats

The internal analysis comes from investigating your company’s strengths and weaknesses. Analysing the strengths of your company allows you to establish your unique selling point, and how you can optimise this. Examining your company’s weaknesses allows for areas of improvement to be established to help your business remain competitive.

To investigate the external environment, opportunities and threats are researched. Looking for opportunities in the industry allows for areas of growth to be identified, where you can gain first mover advantage. This can allow for your business to increase its market share and potentially grow into a new emerging industry. A possible opportunity for businesses  at the current time is Tik Tok, however this social media platform is not appropriate for all target markets and products.  Analysing threats means that industry trends can be identified that could impact on your business. An example of when a business has failed to identify industry threads was Blockbuster. Blockbuster did not recognize the impact the online streaming services would have and did not adapt to the consumer demands.


A PESTLE analysis investigates the external industry factors that could affect your business. PESTLE is an anagram for:

  • Political
  • Economic
  • Social
  • Technology
  • Legal
  • Environmental

By investigating these aspects, you can forward plan and adapt the business to comply with new legislations and, avoid negative consequences. A social, environmental and technological change in the car industry is electric cars. Thus is as, society has become more concerned about their negative impact on the environment, therefore are aiming to reduce their carbon footprint.  From a technology perspective, the car manufacturing industry has developed the capabilities to be able to produce electric cars to fit the social and environmental trend.

Competitor Analysis

When analysing competition, you need to look at your direct, indirect and substitute goods. A competitor analysis also needs to consider competitors market share, who their target market is and how they are being targeted. Carrying out a competitor analysis also assists in establishing gaps in the market, and where products and services are not satisfying customers pain points.


An example of internal and external analyse used in practice is on the bamboo toothbrush industry.

An opportunity from looking at the external environment in the oral hygiene market is the social and environmental issue of increase concern over plastic pollution. Thus, presented the opportunity for start-ups, and companies selling environmentally friendly products to sell bamboo toothbrushes.

When looking at the competition for bamboo toothbrush companies when they set up their direct competition was other companies offering the same product. Their indirect competition was other dental products such as mouth wash, and substitute products would be plastic and electric toothbrushes. However, as there has been an increase in consumers demanding more sustainable products, market leaders in the dental industry such as Colgate have developed their own bamboo toothbrush to compete in this growing industry.

Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp
Share on email
Holly Hartley

Holly Hartley

Work with us

Our in-house team of creatives, digital marketing experts and techies are an ideal partner partner in growth.
Scroll to Top