SWOT Analysis: Definition and Examples for Ecommerce

SWOT analysis (Strengths-Weaknesses-Opportunities-Threats) is a structured planning method used to evaluate the strengths, weaknesses, opportunities, and threats involved in a project or in a business venture. This analysis method is used for almost 50 years by any company or individual aiming to get successful in business life. It lets the entrepreneurs get a perspective about available business ideas, the market and the business models while offering a detailed overview for potential opportunities in business sector. Now, I prefer to continue writing this article not with complex theories but clear examples. Suppose you have built up a vertical ecommerce website based on fashion, what to expect in this entrepreneurship?

Strengths

You have the advantages in number of suppliers, certain target groups and stock cost since you are in vertical ecommerce. Having not much website traffic ensures low cost in substructure of the website. The sector you are currently in is important in terms of the strength level of an entrepreneurship. Also the domain name you have primarily affects success in ecommerce sector. Selling the products and brands not available in other ecommerce stores is a great advantage to be “unique” among many similar stores. And the point is online stores are more cost-effective than brick and mortar stores.

Weaknesses

You have a new company and a limited budget for marketing activities, which causes difficulty to raise brand awareness in your potential customers. The competitors, having a great power in this sector for a long time, will be your real challenge. In other words, you need to “steal” some of their customers to be successful in sales. Advertisement costs are another burden on your budget and disadvantage of ecommerce businesses. All newly-built businesses have the same problem but they may survive by using detailed marketing strategies.

Opportunities

Uprising vertical ecommerce is the real opportunity of your entrepreneurship. In addition, the fashion sector is really suitable for online store conditions and getting popular among customers. Thanks to this trend, you have the chance to get a place in ecommerce sector. In addition, fashion is a kind of new trend, which can help you to gain attention of potential customers easily. The more popular a sector is the more possibility it has to be successful in ecommerce business.

Threats

Threats have an important place in SWOT analysis since they have the possibility to ruin a successful ecommerce entrepreneurship. Customers are still suspicious about shopping from online stores and it is a real challenge to persuade them by offering secure shopping systems. Also pricing strategies of other competitor ecommerce companies is a threat for your new company. You should to adapt your prices to their “strategic” prices but this can harm your budget in a long term. SWOT analysis continues enlightening entrepreneurs on the way of entering in ecommerce business. But this post provides suggestions for a start up SWOT analysis; that’s why companies with higher budgets should follow a different SWOT analysis method.

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