Running a business is hard work. With so many different things pulling at your attention, it’s easy to get caught up in the minutia at the expense of the big picture.

The only way to make sure your business sticks around for the long haul is to periodically step back and look at things from a broader perspective.

That’s where SWOT analysis—strengths, weaknesses, opportunities, and threats—comes in. A SWOT analysis will push you to look at your ecommerce business’s potential and competitive positioning. 

You won’t just examine how your company is performing today, you’ll investigate how it’s going to perform next week, next month, and even next year.

What is a SWOT analysis?

A SWOT analysis lists the good and bad things about your business, analyzing both internal and external factors. The acronym SWOT stands for: strengths, weaknesses, opportunities, and threats.

Understanding SWOT analysis

“SWOT analysis” sounds like some kind of scary accounting process—it’s not. 

The SWOT framework forces you to think about the future. You know how your business is doing today, but do you know where it will be tomorrow? This process will help you figure it out and—more importantly—create a strategic plan for it.

swot analysis

Why is SWOT analysis important? 

Both large and small businesses should do a SWOT analysis. If you’re starting a new business, a SWOT analysis can help you decide on a business model and gain competitive advantage. 

It will inform your break-even analysis and give a more realistic picture of what you’re signing up for. A SWOT analysis should also be included in a business plan if you need to seek startup financing.

Existing businesses should perform a SWOT analysis annually. Think of it as your annual State of the Business. Having it will allow you to: 

  • Keep your business running smoothly
  • Anticipate problems
  • Work on necessary changes or improvements
  • Invest in smarter initiatives throughout the year
  • Develop new product lines…


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