How to Write a SWOT Analysis for Your eCommerce Business
When you own a business, ecommerce or otherwise, you have to stay on top of your industry to remain successful. One of the best ways to do this is to regularly conduct a SWOT analysis. This type of study is an excellent way to research the environment in which your industry lies. It can help you build a growth strategy, understand your position in the market, and identify possible directions in which to take your company. A SWOT analysis, which stands for “strengths, weaknesses, opportunities, and threats,” also takes a look at both the internal and external factors that affect your business. It’s an efficient tool to provide you an industry snapshot at a glance. Here’s how to write a SWOT analysis:
- Understand what you need to begin
- Do your research
- Tips on writing
- Start with your strengths
- Move on to weaknesses
- Write about your opportunities
- Examine your threats
- Other formats
Understand What You Need to Begin
This type of analysis is an excellent tool for ecommerce business owners to understand the industry in which they operate. However, the task should not be taken on lightly. For it to be successful, much time and effort needs to be devoted to the analysis. Many companies actually choose to hire an outside consultant who can devote all of their time to the work, and can also provide an unbiased eye to the situation. However, if you plan to learn how to write a SWOT analysis on your own, there are three things you should have prepared in advance:
- Time: SWOT analyses are very time-costly if they’re to be done well. They require lots of in-depth research on not just your own business but on your competitors and the market as a whole. Depending on the size of your business, it might take you a few days to a few months to complete. Because markets change quickly, you should also plan to redo the analysis at least once a year.
- Data: You can’t begin to understand how to write a SWOT analysis without first knowing which data to collect. Before writing, acquire objective research such as traffic statistics and financial details, as well as subjective research like customer reviews.
- Benchmarks: Often, a SWOT analysis is written to help business owners understand where their company sits within the industry and to plan for the future. To help you with this, research industry standards to compare your business against.
Do Your Research
The first step of learning how to write a SWOT analysis is to research before you even move on to the writing. There are a few specific metrics to gather for a thorough study:
- Objective Data: This type of data is hard evidence not based on opinions or biases. It most often comes in the form of numerical statistics. The objective data you should collect from your website includes: unique visitors per month, page views per month, traffic trends, bounce rate, and changes in all of the listed metrics from month over month and year over year. You should also gather information on conversion rates, customer loyalty, stats for your social media, SEO data, customer acquisition information, shipping information, and more.
- Subjective Data: Once you have collected objective stats, you can gather more subjective data, which includes information based on opinions. Some places to gather this research includes customer reviews and surveys, employee interviews, and polls gathered from non-customers.
- Competitor Analysis: Because SWOT analyses take a look at both internal and external factors affecting your business, you should take a close look at your competitors who are a major external factor. Do your best to gather similar objective data as you will have collected regarding your own business (though many competitors won’t make that information publicly available). Following that, you should also research their product range and pricing, current promotions, details about their social media and SEO, customer service methods, how they accept payment, how their website looks and works compared to yours, and any metrics about their company such as number of employees and annual revenue.
- Market Trends: Another external factor that affects your business is the market itself and the trends it is subject to. Research the current and expected demands for your products, any trends that can increase or decrease demand for your goods (such as celebrities using similar products), upcoming legislation, etc.
More Tips to Learn How to Write a SWOT Analysis
After you complete the research stage of your analysis, there are a few other tips you should keep in mind to make sure it will be helpful to you, and not just a waste of time.
- Be Realistic: When you start writing down the strengths and weaknesses of your business, it can be tempting to hype yourself up and ignore a few weaknesses. However, the SWOT analysis is meant to give you the most realistic view of your business and doesn’t need to be shared with anyone else, so it’s harmful to let biases influence it.
- Think About Present and Future: This type of analysis can help you understand your place in the current market. It can also be incredibly helpful when you try to plan the future of your business. When strategizing for your company’s future, don’t forget to look at your analysis for help.
- Keep it Short But Detailed: The SWOT analysis doesn’t need to be a novel. In fact, it’s best written in short, point form notes. Being overly complex might lead to overthinking. However, make it as long as it needs to be to contain all relevant information.
- Remember Your Competitors: The success of your business has as much to do with what you’re doing as it does with what your competitors are doing. Don’t forget to research them as thoroughly as you research your own company to create a workable analysis. Be sure to examine other ecommerce businesses as well as brick-and-mortar stores.
Start With Your Strengths
A SWOT analysis takes a look at both the internal and external factors that affect your business. Your strengths are the first internal factor. This section describes the things you do better than anyone else in your business. It also details the things that make you unique, and the things that you just do especially well. Some strengths your ecommerce company may have include:
- How you operate financially
- The methods you employ to market your business
- Where you are located and where you can sell to
- The price you sell your products for
- The purpose your products serve
- How you communicate with your customers
- How well your website makes it to shop and compare items
Move on to Weaknesses
The other internal factor that you will examine when writing your analysis is the weaknesses your business faces. These are things you don’t do as well when compared to competitors or things you’d like to improve upon. Common weaknesses may be:
- High shipping costs and wait times
- How a lack of in-person interactions with your products and employees affect your customers
- Security concerns people have when paying online
- Barriers to marketing in specific geographic regions
- Skills lacked by your current team
Write About Your Opportunities
After thoroughly examining the internal factors that affect your business, you can start to write about the external factors, the first of which are the opportunities your business may come across. Because ecommerce and business changes every day, your opportunities will also change rapidly. It also takes a keen eye to pick out those that may affect you so always pay attention to the news, social media, and other channels that keep you in touch with the world at large. Some opportunities that may affect you include:
- Emerging technologies
- Changing social media
- New pop culture trends
- Weaknesses facing your competitors
- New pools of potential customers
- Increased business availability
- Global influences
Examine Your Threats
Finally, you need to examine the external threats that could impact the success of your business. These threats are most often large industry shifts that can impact you negatively. By expecting these threats, you can begin to plan how you might mitigate their effects. Threats that you may face include:
- Economic downturns (recessions)
- Regulating legislation
- Privacy concerns
- Opportunities for your competition
- Low barriers to market entry (which leads to increased competition)
- Geographic barriers
While the SWOT analysis is the most common form of research for businesses, and one of the earliest methods, several other forms of analyses have since sprung into existence. You can use these in addition to or instead of the SWOT analysis:
- SOAR: Strengths, opportunities, aspirations, results
- SCORE: Strengths, challenges, options, responses, effectiveness
- NOISE: Needs, opportunities, improvements, strengths, exceptions
To keep a finger on the pulse of your business, learn how to write a SWOT analysis.
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