Why You Should Do a SWOT Analysis for Your Shopify Business

Whether you're just starting out in ecommerce or are already an established etailer, nothing helps you to assess the lay of the land like a SWOT analysis. Developed back in the 1960s, this simple but powerful tool continues to prove itself invaluable for charting business objectives and developing successful strategies.

What is a SWOT Analysis?

SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats: the 4 areas examined by this form of strategic analysis. Strengths and Weaknesses refer to internal characteristics of the business, whereas Opportunities and Threats are external.

Determine Your Strengths

• What does your company do especially well?
• What resources do you have?
• What advantage(s) do you have over your competition?
• What is your business' USP — unique selling proposition?

Admit Your Weaknesses

• What processes need to improve?
• What resources does your business lack?
• What factors within your control limit your ability to be competitive?

Identify Opportunities

• Is the market for your product(s) growing?
• Are there any trends emerging that would encourage people to buy more?
• What's happening in the marketplace that could represent an opportunity?

Evaluate Threats

• Who are your existing or potential competitors?
• Are marketplace trends liable to hurt your business?
• What factors beyond your control could place your business at risk?

Turn SWOT Results into Strategies

Once you've diagrammed your SWOT lists, look for ways you can use your company's strengths to make the most of opportunities and minimize threats. Then figure out how to use the opportunities you identified to minimize your business' weaknesses and avoid the threats.