The Ultimate Guide to a SWOT Analysis for Ecommerce Businesses

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    The SWOT Analysis is a planning tool that can help break down any business into its strengths, weaknesses, opportunities, threats, and strengths.

    Every new business owner has to conduct a SWOT study to figure out how their company is likely to succeed. Unfortunately, even with the most effective analytical approach, it’s difficult to succeed in business. This blog explores why a SWOT analysis is crucial, how to conduct the SWOT analysis, and how to plan in the event of a change.

    swot analysis definition

    What Is SWOT Analysis?

    SWOT (strengths, weaknesses, opportunities, and threats) analysis provides a model to assess the business’s competitiveness and develop strategic plans. A SWOT analysis evaluates external and internal factors, in addition to current and future possibilities.

    The SWOT analysis intends to provide a real-world and fact-based look at the advantages and weak points of an initiative, organization, or industry. The company must ensure that the analysis is as accurate as possible by avoiding preconceived notions or grey areas and instead focusing on real-world circumstances. Businesses should utilize the analysis as a reference but not as a guideline.

    What swot stands for ?

    SWOT= Strengths, Weaknesses, Opportunities, and Threats analysis

    How to do a swot analysis on an eCommerce business?

    marketing swot analysis

    Below, we’ve listed five suggestions for implementing a successful SWOT analysis into your strategic plan.

    Begin brainstorming sessions

    Get your group together and begin thinking about ideas. Participants in brainstorming sessions may come from different areas (marketing, IT, finance, Customer support, etc.) Invite everyone to participate, and the more perspectives and opinions, the more valuable.

    The purpose of brainstorming is to listen to the thoughts of your team members in their heads and to collect as many thoughts as you can to ensure that you don’t miss the most important ideas. Not every idea, and you could uncover a few things that can positively impact your financial results.

    Break down the four components

    Once you’ve collected feedback from your team and decided on the purpose of the SWOT analysis table, you’re now ready to tackle the four components of your SWOT model: weaknesses, strengths, potentials, threats, and strengths.

    Discover your strengths

    Finding what strengths are present in your business is the initial step of SWOT analysis. Your brand’s strengths are the characteristics that are your company’s benefits and the areas where your business is doing well.

    What can you do to stand out from your competitors in the same field? Are you an innovator within your industry? What makes your business unique? Do you sell products made by hand that aren’t available anywhere else?

    Each aspect of your online business can only be considered an asset if it delivers greater benefit. For example, when all major competitors in your field offer customer service, then support provided by customers isn’t something you can count on; it’s essential. Likewise, if your store’s e-commerce site offers free shipping, but your major competitors charge additional costs to ship. It could be considered to be a strength in the strategic analysis.

    Determine your weakness

    The next step is determining what areas within your online business requirements should be enhanced. The weak points are those that could negatively impact the performance of your business. Take into consideration the issues you find difficult to attain and the instances that you’ve been unable to meet your customers’ expectations. What’s wrong with your approach? What do your customers expect you to improve? What are the biggest challenges you face? What are you failing to meet?

    At this point, the most important thing is to be aware of the negatives, Be open and confront any unpleasant facts. For instance, if your checkout process is more time-consuming than other websites, or your customers do not have access to various choices for payment, you could be in danger.

    Take advantage of opportunities.


    When you’re done with the internal aspects, You should look for opportunities within the e-commerce landscape. Opportunities are the opportunities your online business can profit from. Recognizing and capitalizing on opportunities could significantly impact your business’s competitive capability.

    For instance, the introduction of the use of PWA (progressive web application) has helped make the mobile experience as easy to use as it is. Cloud computing assists issues with scaling and automating the manual processes of inventory, ordering, and fulfillment. Apple Pay lets customers buy items online without inputting their credit card or personal information. Many options are available in the marketplace, so be sure not to miss these!

    Check for threats.

    After identifying potential opportunities, you can look at the biggest risks. The threats are all external factors that could negatively influence your business’s future, like supply chain disruptions, emerging competitors, and many more. To avoid the negatives from the outside requires scrutiny of the store’s managers. Most of the time, there is no control over your risks; however, it’s essential to be aware of them to develop contingency plans in case unfortunate events occur.

    Consider the challenges that you’ll encounter when you start selling online. For instance, the latest technologies don’t just offer possibilities but could threaten your business. Technology advancements could cause your products to obsolete. If this is the possibility of this happening, make sure to respond quickly and create solutions to the threats that are emerging before your company becomes the victim.

    Design your own SWOT Analysis matrix

    When you’ve finished this SWOT thinking process, you can organize your thoughts and record your results into your SWOT matrix.

    When should you conduct a SWOT analysis?

    It is recommended to analyze SWOT before taking any kind of business decision, whether you’re evaluating new ideas, revising internal policies, or evaluating possibilities to pivot or modify the plan in the mid-course of its execution. In addition, it is sometimes advisable to conduct an overall SWOT analysis to examine the present conditions of your business to ensure you can make improvements to your business when required. The analysis can reveal the areas in which your company is operating at its best and the areas that require improvement.

    Don’t fall into the trap of looking at your business’s operations informally, hoping that they’ll all be put together seamlessly if you take the time to create an official SWOT analysis to see the entire picture of your company. Based on this, you will find ways to improve or eliminate weaknesses in your company and leverage its strengths.

    While the business owner is certainly required to be involved in the creation of the SWOT analysis, it’s generally beneficial to include other team members involved in the process. Request input from several team members and discuss the contribution provided. The group’s collective experience will enable you to examine your company from all aspects.

    SWOT Analysis Example

    personal swot analysis examples

    In 2015 the year 2015, a Value Line SWOT analysis of The Coca-Cola Company noted strengths such as its worldwide renowned brand name, its extensive distribution network, and potential in new markets. But, it also highlighted risks and weaknesses, such as fluctuations in foreign currency, an increasing public desire for “healthy” beverages, and competition from healthier beverages providers.2

    Its SWOT analysis led Value Line to pose some difficult questions regarding Coca-Cola’s business strategy; however, it also pointed out that Coca-Cola “will probably remain a top-tier beverage provider” that could provide those who are cautious investors “a reliable source of income and a bit of capital gains exposure.”

    Five years after five years later, five years on, the Value Line SWOT analysis proved efficient since Coca-Cola remains the 6th most powerful brand globally (as it was in the year). Moreover, the shares of Coca-Cola (traded under the ticker symbol “KO”) have grown in value by more than 60% over five years following the analysis’s finished.

    To better understand the significance of the SWOT analysis, think about the scenario of a fictional organic smoothie business. It performed a SWOT analysis to comprehend how it competes in the smoothie industry and what it could improve. In this study, it was able to determine its strengths as being a good supply of ingredients, personalized services to customers, as well as a solid connection with suppliers. On the other hand, its operations discovered some weak points: a lack of product variety, high turnover rates, and obsolete equipment.

    In examining how the external climate influences the company’s business, it discovered opportunities in emerging technologies, demographics that aren’t fully explored, and the shift in culture towards healthier living. However, there were also threats like a winter cold which can harm crops, and a global pandemic and the supply chain is prone to kinks. Together with other methods of planning, the company utilized SWOT analysis to use SWOT analysis to draw on its strengths and opportunities externally to reduce threats and build up areas in which it was weak.

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