Article II, Section 3 of the United States Constitution states the following requirement from the President: "He shall from time to time give to the Congress information of the state of the union, and recommend to their consideration such measures as he shall judge necessary and expedient." In other words, the President is required to tell us what’s up with the country and our situation on a regular basis.
The same requirement should hold true for your online business – you need to provide a personal State of the Union to survey where things stand internally and externally. This process is called a situation analysis. There are several ways you can go about this, but one of the quickest and most effective tools is the SWOT analysis model. SWOT stands for Strengths, Weaknesses, Opportunities and Threats.
I’m particularly fond of the SWOT model because it allows you to make a broad list, narrow it down and form an action plan. So to get started, here are some questions to help guide your analysis of each piece of the model
Strengths (internal)
What is my business good at? What is going right? What gives me a unique edge over my competition? Once you determine your strengths, decide how you are going to build and enhance them. This can be the basis of your sales strategy.
Weaknesses (internal)
What is my business not so good at? What are areas of improvement I can pursue? What do my competitors say about my business when selling against me? When done with this analysis, figure out what you can do to remove these weaknesses or how to limit their impact.
Opportunities (external)
What new developments are taking place in the industry? Is there a new feature or piece of technology I can use to grow my business? Does my competitor have a huge weakness? Is there a new pool of customers I can reach out to? Upon identification of your business opportunities, prioritize them and put together a plan to capitalize on them.
Threats (external)
What is going on in the industry that might hinder my growth? Are there any policy/regulation changes that can affect my business? Is there a competitor breathing down my neck? How are customer behaviors changing that might hurt my current business model? After you evaluate your threats, consider how much control you have over each and decide which are worth addressing.
If you’re new to the SWOT analysis, give it a quick try by thinking about your favorite company. Then, when you’re comfortable with the model, apply it to your online store. If you don’t know what your present situation is, you’ll never have a clear direction in climbing the ladder of success.
So if performing a “State of the Union” analysis isn’t part of your business Constitution, it’s time to make an amendment.
Have any questions about performing a SWOT analysis? Let us know in the comments!