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Running a business can be difficult. With so many different things pulling at your attention, it’s easy to get caught up in the minute details at the expense of the big picture. By taking stock of your business regularly, you can make sure that it will stick around for a long time.
1: What is a SWOT analysis?
A SWOT analysis helps business owners assess their strengths, weaknesses, opportunities, and threats to determine how to manage their eCommerce operations. It assesses the business as well as how it’s doing today by looking at potential next week, next month and even next year so it can be improved.
Strengths and weaknesses are internal factors, and opportunities and threats are external factors. Opportunities and threats are factors that come from within your environment – in the form of competitors and customers. The present mostly focuses on weaknesses and opportunities, while the future mostly focuses on threats. What is happening versus what could happen? What is usually difficult, but you can change over time if you want to, examples are:
⦁ Company culture
⦁ Company reputation
⦁ Customer list
⦁ Geography of the company
On the other hand, opportunities and threats are outside of your control. You can try and plan for them or influence a positive change, but at the end of the day, it’s not up to you. Examples include:
⦁ Market size
2: Why is it helpful to conduct a SWOT analysis?
Both large and small businesses should do a SWOT analysis. Having one will help you decide on a business model and gain a competitive advantage. Doing one will inform your break-even analysis and give a more realistic picture of what you’re signing up for. Both should be included in a business plan if you need to seek financing. Find out financial support platforms for loans here.
3: How to do a SWOT analysis?
SWOT analysis is not completely objective. There’s no way to accurately measure your success in this difficult process based on hard scientific data. It’s more reliant on recognizing certain areas and designing a successful business strategy, here are the 4 steps to take:
Step 1: Create a SWOT analysis matrix
Your first step is to create a SWOT analysis, the 2 x 2 matrix has one box for each area: Strengths, Weaknesses, Opportunities, and Threats.
Step 2: Find the right people
Every business has people working for it who don’t know the whole industry, but their input is valuable. You may also find that you’ll get better buy-in on the strategy decisions that come out of the analysis if you include your employees in the process, or additionally your customers as they can provide valuable insight.
Step 3: Organize a brainstorming session
Collaborate with your team on a brainstorming session to identify strengths, weaknesses, opportunities, and threats. You can either list them together or ask participants to submit their lists. Write down each observation and how important it is. Come back to this list at the end of the process and decide which things could move up the list.
Step 4: Fill the gaps
Write down tangible ideas and challenges. Fill in the gaps where more clarification is needed by asking yourself questions. Make this process collaborative so that everyone can contribute their ideas.
Read this information and think about the strategies you could implement to build your business. There are no right or wrong answers here- use what you find in the article to help make your decisions. If you want to sell your products online, register your free account here to find out more about the best ways to start doing this.