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Strategic Positioning in Web Hosting: Putting You Ahead of Your Competition - WebHostingBuzz US Blog
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Strategic Positioning in Web Hosting: Putting You Ahead of Your Competition

Posted on 07 Apr 2009 by
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In today’s market, someone can find quality web hosting with a large company that offers $5 per month with all kinds of space and bandwidth allocated toward an account, and that person may never have any trouble with it.  If you are in the hosting business, though, this creates a problem:  how do you compete with the common $5 per month plan?  How do you attract clients to your business over someone else?

It comes down to several elements that go well beyond a simple space and bandwidth question.  What you most focus on as a small host is what you can do that the larger businesses can not.

In marketing, we call this type of analysis a SWOT diagram.

SWOT

A SWOT diagram is a simple four-square chart that analyzes the strengths, weaknesses, opportunities, and threats of a business.  It is used for strategic direction and determining how to best position your business against your competition.

swot

When you conduct this analysis, it is vitally important that you are completely honest with yourself about your business.  All businesses have weaknesses, but it is how they leverage their strengths and opportunities, while attempting to improve their weaknesses and position against threats that counts.  That is what this analysis is capable of helping with.

Let’s do a sample SWOT of a small hosting business to see what can be done:

Strengths

Strengths are items that your business does well, or has the capability to do that other businesses may not.  For small businesses, there might be a few things that you can do much better than your larger competitors.  For instance, you can develop a personal relationship with your clients, where the larger places can not.  Imagine being a customer at a host with a few million customers.  You call in for technical support and speak with a different person every time.  If you can provide one on one support to your client, providing them with someone they can associate with, this is a strength.

Other strengths may be things like infrastructure load, server load, and other things that have a positive impact on your customer.  With that, let’s update the SWOT diagram:

strengths

Weaknesses

Weaknesses are things that your company does not have going in its favor.  Typically, small businesses have three weaknesses when compared to others: capital, name recognition, and a limited staff.  These are all things that can be improved – which is the purpose of a SWOT, identifying  items that you should focus on.  Let’s update the table to reflect our generic company’s weaknesses.

weaknesses

 

Opportunities

Opportunities are considered areas where you have the capability to create a strategic advantage for your business.  Opportunities for a small business could be providing a specific solution, say small business blogging setup to your customers, or there is a particular need in the health care industry you can focus on.  These are typically items that guide your R&D focus over the next 1-3 years, so think long-term.

opportunities

Threats

Threats are things products or services that could take away from your market share or put you behind your competition.  A huge threat to the small business hosting industry would be Best Buy offering web hosting at an insanely reduced rate with more features.  This could put the entire market out of business, but let’s say it were a possibility, completely hypothetically.  Please remember this is a sample only!

swot-complete

How to Analyze a SWOT Analysis

Now that we have successfully developed our SWOT analysis, it is time to start comparing the results and planning their use in your overall marketing strategy.

Use your strengths to position you where your competition can not compete on the same level as you can.  Highlight these in all marketing campaigns and make them a centerfold of your website.

Take your weaknesses and plan how those areas can be improved upon and how you can develop strategies to minimize their impact on your business.

Your opportunities prepare you for where your business will go from here.  These are areas that you can develop early and really compete well in.  Never let an opportunity pass without very careful consideration!

Threats must be anticipated and your business must be prepared to deal with a dramatically different market if any of the threats come into play.  Mitigate the impact by developing a response plan and executing it very carefully along side your opportunities to create a possible future growth.

The elements all tie together to form the basis for your overall marketing strategy.  Companies with many products sometimes use a different SWOT for each individual market to determine a certain area’s viability, but these tools can be just as useful to the small business owner.

The goal is to create a strong position where you are prepared for the future changes in your market and where you position yourself better than your competition in your consumer’s eye.

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