To prepare your brick-and-mortar business and website for the future and set the right priorities, doing a SWOT analysis is a best practice. It enables you to identify and understand current strengths, weaknesses and other aspects of your business. We will show you how to apply this method to your business step by step in order to act confidently in the digital market of tomorrow. This article is useful for merchants who want to set up their online presence or even start an online business.
But what does SWOT actually mean?
SWOT stands for four dimensions through which you can evaluate your business and its potential:
- Strengths
- Weaknesses
- Opportunities
- Threats
A SWOT analysis is a self-assessment done by gathering and considering information within these four dimensions. Drawing from this assessment you develop strategies and apply them to both your offline and online activities.
While the idea is simple, for you as a merchant, embracing and using this strategic planning technique can help you improve your online and offline business. With respect to online presence, the analysis helps you set up an efficient strategy and make grounded decisions. Especially if you are about to enter e-commerce, use these points to determine your recources. Considering your strengths and opportunities can help you more effectively present your business with a website or online shop. Furtermore, this technique can affect minor and major areas of your company: Do you want to develop further in online retail by integrating social media and marketplaces platforms such as Amazon and eBay? Or are you thinking about offering a new product category? Perhaps your company is facing major changes. SWOT helps you to run through the corresponding scenarios. This article guides you through the four factors of SWOT and provides a palette of questions that you can use directly in your business assessment and for assessing your competitors too.
What are your strengths and weaknesses?
Strengths and weaknesses are mainly about internal aspects of your business and website that you are able to influence. There are some external factors that are not easy to influence, such as threats to the industry, the location of your shop or similar. These are addressed in the next section.
Instead, consider your current situation: How much expertise does your team bring along? What are your personal backgrounds and how do you use them? If you already have an online presence, what content does it currently offer visitors?
What are the opportunities and threats?
On the other hand, external factors – opportunities and threats – deal with aspects that you cannot influence yourself. What competition is there on the market, both online and offline? What head start do these merchants have? What developments and trends are happening in your sector?
To illustrate this process and clarify the differences between these points, try imagining all of these questions arranged on a timeline: Your strengths and weaknesses reflect the current state, while you consider the questions delaing with opportunities and threats to analyse the future prospects of your business.
Checklist: How to approach your SWOT analysis step by step
Before you start with a SWOT analysis, consider the following points:
- Research the environment: The demands of working in your brick-and-mortar business may hinder you from doing a detailed market analysis. But keep in mind that important insights about your industry and competition will help you to understand the external factors for SWOT. So make sure to research your environment towards trends, competitors and their online business model as best as you can.
- Ask friends and employees: the more ideas, the better. To get an accurate impression of your SWOTs, it’s a good idea to ask people who already know your products, your brick-and-mortar business and your online activity. Perhaps you have regular customers whom you can approach for their opinion. If you already have a platform for collecting customer reviews, include these impressions in your analysis as well.
The first steps in the analysis:
- Brainstorming your SWOTs: You might already have initial thoughts about your SWOTs. Below you will find our list of questions. Start there and do a first brainstorming to generate and capture details. Don’t be afraid of long lists. More is helpful! You can always delete unimportant points. In any case, be fair and honest with yourself. Unacknowledged weaknesses can hinder your path to the most viable solutions. Instead, take the opportunity to use SWOT to develop a new strategy that moves you forward in the long run.
- Give yourself a break: After you’ve started a SWOT process, take a few days to get used to that thinking and reflect on it. Managing the processes of your day-to-day activities can help bring to light new ideas and prioritise the importance of those already noted. Make a note of these factors too!
- Form your strategy: When you think you have summarised all your SWOTs in detail, begin to structure them into a strategy. How can you highlight and use your strengths and opportunities? How can you counteract weaknesses and threats? What at first sounds like a theoretical construct is sometimes easier to implement than you think. Outline time-bound goals that you derive based on these points. Link the strategy to each point of SWOT:
- Strengths and opportunities: Highlight your strengths to maximise your opportunities
- Strengths and threats: Use strengths to limit or cancel out threats
- Weaknesses and opportunities: Reduce weaknesses to increase opportunities
- Weaknesses and threats: Reduce weaknesses to reduce threats
Start small to get used to a new strategy. An example: You regularly receive large numbers of enquiries about a certain product and that hinders your day-to-day business. Adjust the product description to address these enquiries! If the volumes decreases, you have successfully counteracted a weakness.
- Update your SWOTs: Your SWOTs are dimensions that are always in flux and can change over time along with your priorities, capabilities and environment. Periodically take the time to adjust your SWOTs and update your strategy.
Questions for your SWOT analysis
Use our question template to filter your SWOTs. We recommend writing down your thoughts in bullet points.
Strengths
- What are the advantages of your products?
- Do you offer products that are not available in any other shop?
- Which product is particularly profitable?
- What distinguishes you personally as a business owner?
- What expertise do you bring to the table as a business owner?
- What positive feedback do you get from customers?
- Does your shop have a good reputation in your environment?
- Do you already have a website?
- What experience do you have in your business area?
- What makes your shop so special?
- Do you already have contacts who have helped you with your business?
- Do you already have experience in ecommerce?
- What hurdles have you already overcome with your brick-and-mortar business?
- Where can you save money to maximise your profit?
Weaknesses
- What are things you do less well than others?
- Is there anything that bothers you about your shop?
- Have customers ever given negative feedback?
- Where are you losing money?
- Where do you lack resources?
- Do you only have little experience in some areas?
- Have you ever made serious mistakes?
- Do you have revenue difficulties with certain products?
- Does your staff lack knowledge?
- Do your customers have interests that you could not serve with your retail shop?
- Were some product descriptions unclear to customers?
Opportunities
- What customer needs could you serve in the future?
- What strengths do you see through an online presence for your business?
- Do you have the ability to distribute your products locally, to other countries?
- What external resources can you use to respond to customers’ needs?
- What goals can you achieve in the near future?
- What disadvantages do competitors in your industry have compared to you?
- What are the trends in your market?
- How can you take advantage of future developments?
- Do you have the opportunity to address a new target group, for example a different age group?
Threats
- What are the potential threats to your industry?
- Which developments could be dangerous for your business?
- What threats do you personally see in the next three years?
- What lead does your competition have?
- Do you have products that are only sold for a short period of time, for example trend products or seasonal products?
- Are you tied to other companies, for example to a supplier?
- Do you know companies in your immediate environment that will soon enter your industry?
- Which of your competitors dominates the market and why?
- For what reasons are your sales not greater?
How to get the most out of your SWOT analysis
Once you have gained a deeper impression of these four dimensions, you can better assess your environment and your position in the market. Dare to think outside the box to identify advantages and disadvantages of your brick-and-mortar business that you might not have considered before. Most importantly, do not be frustrated when discovering weaknesses and threats. The SWOT analysis serves to generate ideas for counteracting these supposedly negative points.
Often, a well thought-out online presence helps to compensate for the weaknesses of a physical business. It already might help to start by putting an entry in Google My Business to achieve a first online presence and help online customers find your shop through location-based search. Particularly when opening your online shop, the SWOT analysis is a good way to rethink and optimise your strategy. We have summarised for you the most important tips for starting your online business here.
We hope that this introduction to the SWOT analysis will be useful and may already have helped generate ideas for your new strategy. We wish you success in planning your online and offline business!
