Lecture 2
What is a SWOT analysis?
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. SWOT
analysis is a tool used to evaluate major elements that have an impact on your
business success. These four elements are grouped into internal and external
factors.
SWOT is an abbreviation that consists of the following elements:
Strengths – what are the advantages over competitors?
Weaknesses – which actions were implemented poorly?
Opportunities – what can be improved?
Threats – what can prevent the process from being successful?
Strengths.
What do you do better than others in your industry? Examples for ecommerce
merchants might be a larger selection of products and faster or cheaper shipping.
Is comparison-shopping easy and quick? Do you suggest other product options?
These are competitive advantages.
Ecommerce companies benefit from lower operational costs than brick-and-
mortar stores.
What makes your business unique? Do you offer niche products not available
elsewhere? Are they handmade or one-of-a-kind?
Weaknesses.
There is no immediate gratification with ecommerce. Goods must be delivered to
customers. Heavy, bulky, and perishable items are expensive to ship.
Security and fraud concerns mean some consumers are reluctant to use their
credit cards online. Allowing customers to pay with PayPal can blunt this concern.
Showrooming — the process of consumers inspecting goods at a physical store
and then ordering online via mobile phones — has blunted the problem of online
shoppers’ inability to touch the merchandise.
Opportunities.
Ecommerce merchants should likely ask:
“What new technologies can help grow my business?”
“Where are my competitors vulnerable?”
Ecommerce changes quickly. New technologies have leveled the playing field with
traditional retailers. For instance, improvements to shopping cart software have
created a quicker, smoother, more customer-friendly experience. Live chat has
enhanced online customer service. Analytics can help ecommerce companies
understand customer preferences better. Social media sites provide free or low-
cost promotions.
Threats.
Monitor industry shifts that might affect your company’s growth, such as legal
and regulatory changes. For instance, legislation currently before the U.S.
Congress might force online merchants to collect sales tax.
Low barriers to entry are a constant threat in ecommerce. It’s easy to set up an
ecommerce business. Moreover, people can sell items via Facebook or eBay
without requiring their own website.
Benefits of conducting a SWOT analysis for ecommerce company
Developing a SWOT analysis matrix is a great way to evaluate its business
effectiveness at a minimal cost. A SWOT diagram helps you to:
Evaluate current performance
Figure out what areas of your online business needs to be improved
Set clear and actionable business goals
Understand its position on the marketplace better
Learn how to more effectively distribute resources
Minimize threats and eliminate your weaknesses
Find out what you lack against your competitors
Gain useful knowledge on your business’s strengths
Technology Infastructure for E-Commerce
What is ecommerce infrastructure?
Ecommerce infrastructure refers to all the facilities and tools needed to run your
ecommerce business. This includes the hardware, software, network, and services
that support your operations from start to finish. With the right ecommerce
infrastructure, you can not only optimize your performance but also prepare your
business to scale.
Specially it includes: Internet, WWW, Networks, ISP’s, and Markup languages.
Elements of ecommerce infrastructure
Technology
More than any other retail business, ecommerce businesses rely heavily on
technological infrastructure. An ecommerce platform would be the first and most
important consideration as this is where your entire website will rest, providing a
digital storefront for your customers.
Sales & marketing
The sales and marketing aspects of your ecommerce operations are another
major consideration. Without effective marketing, you won’t be able to attract
enough customers to your online store. That means you can’t make enough sales
to drive profits for your business. This makes it crucial to ramp up your sales and
marketing infrastructure.
Customer service
To deliver exceptional customer service, your ecommerce business should be
equipped with the right tools. While email may be sufficient to provide basic
customer service both during and after sales, you’ll need to make it more robust
with phone support. In addition, live chat and social media support are important
considerations so your customers can reach you anywhere.
Finance
As your ecommerce business scales, you’ll also need infrastructure that can
support your increasing financial transactions. Besides your sales and payments
from alternative channels, make sure you can closely track applicable vendor fees,
subscription fees, and taxes.
Servers
If you’re hosting your ecommerce website yourself, you need to invest in robust
physical servers that are capable of processing and storing large amounts of data.
That means you also have to consider physical space dedicated for those servers
in your premises.
Order management software
Order management is a crucial factor in ensuring that your ecommerce business
functions smoothly, which makes order management software a vital investment.
Criteria for choosing ecommerce infrastructure
Choosing the right infrastructure to match your ecommerce business
strategies enables your operations to run efficiently and increase your
revenue.
Flexibility: An ecommerce environment must be easy to manage for all
users. They must have the ability to respond quickly for all the changes and
must adapt the new technologies and features as a scalable factor.
Usability: Usability is an important factor while you are choosing the
services for ecommerce platforms. When any one of the services fails, it will
cause a major effect in delivering efficient performance.
Scalability: Ecommerce grows rapidly where new technology and services
get added regularly so it needs to have an environment that does not
collapse during additional services. The infrastructure should be scalable in
terms of technology, human recourses, high traffic, etc. Also, the
performance of the system should not be slowed down.
