What is SWOT Analysis? How is it Conducted? Examples of SWOT Analysis in E-commerce
Starting a new journey is always exciting. Establishing a company or launching a new project are perhaps the most thrilling moments in business life. Regardless of the company’s scale or the industry it operates in, motivation is at its peak during these initial stages. All components of the project or company focus on success during this process.
Therefore, when making such important decisions and taking significant steps, it’s essential to thoroughly examine all positive and negative factors related to the work or project at hand. This proposition might seem complex at first, and a roadmap may be needed to manage the process. This is where a SWOT analysis becomes an extremely useful tool you can rely on.
So, what is a SWOT analysis? What is the purpose of this frequently mentioned SWOT analysis? In this article, we will explore it in depth along with examples of SWOT analysis.
What is a SWOT Analysis?
A SWOT analysis can be defined as a tool that allows you to examine a company’s strengths and weaknesses and identify opportunities and threats in the industry. When developing new marketing and sales strategies, a SWOT analysis enables you to make more accurate decisions. Additionally, it provides clear insights to prepare for potential positive and negative situations in the future.
Through statistical studies and brainstorming, it helps to create a clear picture of the current state of the company, project, product, or service. The term SWOT is an acronym derived from the English words Strengths, Weaknesses, Opportunities, and Threats, which represent the key elements of the analysis.
History of SWOT Analysis
The history of this method dates back to the 1960s. Although it wasn’t named as such at the time, four academics from Harvard University—Learned, Christensen, Andrews, and Guth—laid the foundation for SWOT analysis. Their work, titled Business Policy: Text and Cases, defined the four main categories we mentioned earlier and outlined the general framework of this analysis.
In the mid-1970s, the method was named using the initials of the four categories, and the SWOT analysis matrix—which simplifies the application of this method—was first used in 1980. Since then, this analysis technique has evolved into a crucial instrument in management and strategy development processes. It has been successfully applied by many organizations and individuals for many years, proving its effectiveness.
How is a SWOT Analysis Conducted?
SWOT analysis and strategic management are two concepts that should be considered together. This analysis method is highly functional when it comes to making decisions or determining strategies while managing any organization. However, for its effectiveness to be fully realized, it needs to be addressed in detail and from multiple perspectives.
Companies should not only evaluate their internal dynamics. After all, a company’s structure and internal operations are not the sole determinants of success. Business resembles an ecosystem where different companies coexist. Therefore, a comprehensive analysis should include both internal and external factors, paying careful attention to both aspects.
Internal Analysis of the Business
When answering the question “How to conduct a SWOT analysis?”, you can start by examining your company’s internal structure. Your strengths are among the most critical foundations you will rely on when making decisions during the management process. This allows you to base your steps on much firmer ground. Identifying your weaknesses can be seen as a form of self-criticism. Acknowledging areas where you are weak makes it easier to eliminate them. In some cases, it might even be sensible to exclude aspects in which you are not sufficiently strong from your business plan.
External Analysis of the Business
After identifying strengths and weaknesses, the next step in the SWOT analysis process is to focus on external factors. At this point, you should thoroughly examine the activities and trends of both your competitors and your target customer base. This will help you better predict new opportunities or threats that may arise. By preparing accordingly, you can maximize your ability to capitalize on opportunities and minimize the impact of threats, thereby increasing your success.
Where is SWOT Analysis Used?
SWOT analysis is a highly functional method that can be used in various aspects of business life. It can be applied both by companies in general and on a departmental basis. During the analysis creation process, you can use it to manage the following processes:
- Evaluating the current status of the business or organization
- Identifying and resolving an ongoing issue
- Improving business processes
- Developing and assessing a new project
- Defining long-term plans and strategies
- Launching new products or services
- Measuring employee performance
- Managing marketing processes
SWOT Analysis is a Team Effort
It makes sense to work with a group that knows you or your company well when conducting a SWOT analysis. Brainstorming using a large board or the sample tables provided in this article can be very productive.
Who Should Use SWOT Analysis?
It’s safe to say that the most frequent users of SWOT analysis are commercial businesses and organizations already in operation. However, this is still a limited definition, as this method is also highly beneficial for new entrepreneurs who have decided to start a business. From this perspective, a SWOT analysis can serve as an excellent guide for those planning to launch a new business.
Any organization or individual aiming to reach a defined point of success can use this method. Individuals can also benefit from SWOT analysis, particularly in career management. We will discuss how you can personally utilize this method in more detail at the end of this article.
It is one of the secret weapons of large companies. Being one of the most natural marketing methods, it offers significant benefits. It works when you market through useful and rich content that users can benefit from.
Sample SWOT Analysis Question Templates
SWOT analysis elements consist of opportunities, threats, strengths and weaknesses. During the study, it will be useful to use the chart below to group these elements in an orderly manner.
Also called a SWOT analysis table or matrix, the chart can be easily created by dividing a piece of paper into four equal parts. You can use the table below as a “SWOT analysis form”, or you can reach a ready-made chart on Google.
is to write the determined strengths, weaknesses, opportunities and threats in the relevant areas. The questioning method can be preferred to make determinations about these elements. The answers given or found to the questions to be asked provide the information you need for a successful SWOT analysis evaluation. So what kind of questions should be asked for which headings?
Strengths – (S)
What are the features that your competitors do not have but you have?
What are the features of your products or services that stand out?
What is the potential of the products or services you offer to your customers to make a difference?
What conveniences do you provide to your customers with your products or services?
What are the prominent features of your management and employee staff?
Which low-cost resources do you use?
What stage are you at in terms of innovation and innovation?
Which technological opportunities do you use in a productive way?
What positive feelings does the brand you create evoke in customers?
What physical assets such as patents, technology or real estate does your business have?
Which aspects do your competitors think are your strengths?
Can you establish a positive relationship with your customers?
Weaknesses – (W)
What are the main factors that cause you to fall behind in competition?
Do you have a lack of capital?
Can you follow the latest technologies and easily make them a part of your business plan?
Can you keep up with tough competitive conditions?
What weaknesses do the products or services you offer have? Are there any areas that need improvement?
Do you receive negative feedback for your services? If so, where do they focus?
What are the qualities that you see as lacking in both yourself and your employees?
Are there tasks that you do not do even though you think they could be useful?
Do you observe problems such as low motivation and inefficient work in your employees?
Do you have weak points that your competitors can detect?
What are the details that you think you are lacking in terms of planning and strategy?
Opportunities – (O)
Can you turn new developments in your sector into opportunities?
What methods can you follow to increase your profit?
What methods can you use to reduce your current costs?
Do the products or services you offer address the needs and demands of the near future?
In what ways do new technological developments make your work easier?
How can you evaluate the economic course of the market you operate in to your advantage?
What is your ability to keep up with the transformations in the social structure?
Do new decisions taken by official institutions have positive effects on your commercial activities?
To what extent are you prepared to make decisions for gaps waiting to be filled in the market in light of new developments?
How can you turn the shortcomings of your competitors into your advantage?
Threats – (T)
Is there a possibility that your competitors will get ahead of you in the short, medium and long term?
Are you taking any precautions against economic bottlenecks? If not, what issues do you need to pay attention to?
How prepared are you for the strategic moves of your competitors?
Is there a negative situation that carries growth potential in the internal structure of your company? Do you observe a negative course in any issue?
Is there a possibility that the weaknesses you have identified will turn into even greater dangers?
What changes do you foresee occurring in your sector? Do you have the ability to adapt to these changes?
Will possible technological changes put your business and your position in the sector at risk?
Is your current economic situation at risk? Do you sense danger in the short or medium term?
Will the characteristics that currently seem to be your most positive aspects lose their effect in the future?
Due to the rapid change in the dynamics of the internet sector and the constant competition of companies and changing opportunities, you may need to re-do SWOT analyses at certain intervals.
SWOT Analysis Example for E-commerce Sites
Below you can find a simple SWOT analysis example for new entrepreneurs who want to open an e-commerce site. Using this table, you can create your own SWOT analysis table by answering the questions above. Then, it will be useful to score the items that come out of the analysis.
What to Consider When Performing a SWOT Analysis?
SWOT analysis generally provides great advantages to institutions; It helps maximize company performance. However, it should be stated that there are some details that must be taken into consideration during the application in order to get the best efficiency from this method. SWOT analysis items determined by paying attention to these issues make it more possible for you to reach your goals. The main details you should pay attention to when applying this method are as follows:
Do not neglect to use a table
We have stated that SWOT analysis is conducted on a table. In other words, they may not necessarily be convinced of the necessity of visualizing the decisions taken or the situations determined within the framework of the meetings held. But the biggest advantage of this method is that it shows many important details in the most refined and direct way. Thanks to the clarity of the created table, it becomes easier to carry out the suggested studies.
Create a competent working group
SWOT analysis is a process that should be carried out as a group, by brainstorming as much as possible. Not specifying the people included in this group in the most accurate way also increases the efficiency of the study significantly. In fact, you can develop original perspectives by including not only people from your business but also people in the position of our customers in the process.
Use numerical data
The data you use during the study should be absolute and measured. Making inferences based on data that has not been clearly established on issues such as sales figures or market share will drag the process to very wrong points, contrary to expectations.
Do not let the work remain on paper
Exchanging ideas on business issues excites everyone at that time and even provides an enjoyable time. However, you may experience some problems when it comes to putting the decisions taken into action. In order to avoid such negativities, it is very important to determine in advance how the decisions taken will be put into practice.
The results of the SWOT analysis may require many items and actions. Do not let the work remain on paper and always complete your analyses with data by approaching analytically.
What are the Advantages of Conducting a SWOT Analysis?
SWOT analysis, when applied correctly, brings many important advantages to companies. We can list these advantages as follows:
It provides a comprehensive and clear view of the company’s current situation.
It provides a roadmap for both business-wide and individual performance increase.
It makes the decision-makers’ job significantly easier thanks to the data it provides.
It helps to make the most efficient strategic plans.
It enables long-term projections for the company’s future.
What Depends on the Success of SWOT Analysis?
The success of SWOT analysis depends on your or your company’s management team’s mastery of the course of business and operation. Because in this way, the necessary questions can be asked correctly and it is much easier to determine the needs. Just as decisions taken by people who do not have in-depth knowledge of the company’s work and internal dynamics cannot be accurate, it is also very difficult for an analysis made in this way to be successful.
Why is SWOT Analysis Important in E-commerce?
Although e-commerce has shown great development recently, it is still a new and young sector. In addition, as it is known, trends and areas of interest change very quickly in the internet environment. Therefore, it is extra important to be aware of both the internal structure of the company and external conditions and possible developments in e-commerce.
This is the basis of the importance of SWOT analysis for this field of study. With a successful analysis, you can sense the technological developments that may occur soon and increase your sales figures visibly by making the necessary preparations in these matters.
We can say the same for negative situations. In other words, it is possible to more easily detect trends that are currently receiving a lot of attention but are slowly showing signs of entering a decline phase with SWOT analysis. SWOT analysis test for e-commerce is a method that reduces uncertainties and allows for more efficient future plans.
How to Do Personal SWOT Analysis?
Although SWOT analysis seems to be a method that appeals more to commercial enterprises, it is also extremely useful for people’s decision-making stages in their lives. From this perspective, we can say that this type of analysis can be preferred both by the human resources department of companies and for individual decisions.
What you need to do to apply this method personally is almost the same as in businesses. The only difference is to adapt the questions we listed above to yourself when determining your strengths and weaknesses, opportunities and threats. In this way, you can see your positive aspects that will benefit you more clearly and you can more easily determine the missing features you need to improve yourself.
Personal SWOT analysis provides you with important advantages, especially in terms of career planning. In this way, you can make your strengths even more attractive to employers and make the best use of the opportunities you encounter.
