Swot Analyses for E-business


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Swot Analyses for E-business

  1. 1. SWOT Analyses for E-BusinessGraham Garner • E-Business Practicum BA/CA 388-01 Wartburg College • Fall 2012
  2. 2. Know Your Market• customers• competitors• trends
  3. 3. Know Your Product/ Service• Look at your plans, then the external factors and trends affecting it• Understand where your product/service: • has been recently • is now • is headed
  4. 4. Why a SWOT?The analysis helps you develop a strategyand tactics to help your business growand succeed.
  5. 5. SWOT Objective• Identify critical factors affecting your organization• Build on strengths to reduce weaknesses• Exploit opportunities and avoid potential threats
  6. 6. What are the parts of a SWOT?
  7. 7. Positive Negative• Internal • Internal• External • External
  8. 8. Strengths
  9. 9. Weaknesses
  10. 10. Opportunities
  11. 11. Threats
  12. 12. What questions should you ask in a SWOT?
  13. 13. Questions: Strengths• What is my business good at?• What is going right?• What gives me a unique edge over my competition?• Decide how you are going to build and enhance them. This can be the basis of your sales strategy.
  14. 14. Questions: Weaknesses• What is my business not so good at?• What are areas of improvement I can pursue?• What do my competitors say about my business when selling against me?• Figure out what you can do to remove these weaknesses or limit their impact.
  15. 15. Questions: Opportunities • What’s new in the industry? • What new feature or technology can grow my business? • Does my competitor have a weakness? • What new pool of customers can I reach? • Prioritize them and put together a plan to capitalize on them.
  16. 16. Questions: Threats• What’s slowing industry growth?• What policy/regulation changes affect us?• What competitor is closing in?• How are customer behaviors changing that might hurt my current business model?• Consider how much control you have over each. Decide which are worth addressing.
  17. 17. Let’s do a SWOT of e-commerce itself.
  18. 18. E-Commerce: Strengths• 24-7 operation• Global business from anywhere• Products reach to customers directly from producers at lower price than market value• Fast and effective• Comparison shopping
  19. 19. E-Commerce: Strengths• More affordable advertising• Low staff cost• Financial transaction through electronic fund transfer is fast• Can be started with very low investment
  20. 20. E-Commerce: Weaknesses• No direct customer-seller interaction• Some customers prefer buying by reaching personally to the market• Sometimes, transportation cost increases product cost• No. of potential customers who can buy through Internet is still not enough
  21. 21. E-Commerce: Opportunities• Internet users rapidly increasing• More are feeling comfortable buying through Internet exclusively• Big companies already in the field blaze the path and bear the cost of developing a market
  22. 22. E-Commerce: Threats• Dishonest online businesses damage consumers’ confidence and faith in the entire enterprise of Internet marketing
  23. 23. Examples of SWOT points
  24. 24. Example 1: Strengths• Cost advantages• Financial resources• Customer loyalty• Wide recognition for social responsibility
  25. 25. Example 1: Weaknesses• Need for experienced managers to help growth• Inadequate financing capabilities• Weak market image
  26. 26. Example 1: Opportunities • Growing demand for quality • Enter new markets • Acquire firms with needed technology
  27. 27. Example 1: Threats• Changing buyer tastes• Likely entry of new competitors• Adverse government policies
  28. 28. Example 2: Strengths• Global reach of business• Low cost to maintain and enhance site; not restricted by footprint• Stock is recognized brands• Purchase price less than offline shops• Strong competition for warehousing and distribution keeps costs down
  29. 29. Example 2: Strengths• Easy to remain in touch and build relationships with customers (email, texting, social media)• Use existing distribution networks (USPS, FedEx, UPS)
  30. 30. Example 2: Weaknesses• No shopfront to accept returns• People need to find our site; there is no other marketing• Lack of shop brand recognition• Hard to scale up to respond to peaks and troughs in demand
  31. 31. Example 2: Weaknesses• Limited financial capital to fund website optimization• Larger or heavy products have high delivery cost, diminishing online price advantage• Low web development skills in-house; reliant on outsourcing
  32. 32. Example 2: Opportunities • Established traffic and high number of repeat customers may enable increased sales through the addition of complimentary product lines • Increased use of online shopping among 18-35 suggests additional sales may come from stocking product for this age group
  33. 33. Example 2: Opportunities • Improve organic search ranking to reduce advertising costs
  34. 34. Example 2: Threats• Internet has no barriers to entry, which means a better financed business or established retail business might seek to compete in this niche• Other online shops selling similar products• Buyer reluctance to shop online (diminishing)
  35. 35. Example 2: Threats• Quality issues from overseas suppliers damage reputation of brands we sell• Larger business with greater buying power may undercut our prices to gain online market share
  36. 36. Exercise: Fast SWOT
  37. 37. Pick one of thesecompanies and do a SWOT matrix.
  38. 38. Sources• http://onlinebusiness.volusion.com/articles/performing-a-swot-analysis/• http://toolkit.smallbiz.nsw.gov.au/part/1/2/11• http://www.articlesbase.com/online-business-articles/swot-analysis-of-e- commerce-554476.html• http://www.whatmakesagoodleader.com/sample_swot_analysis.html• http://www.netmba.com/strategy/swot/