How to Use a Situational Analysis for Ecommerce

Sitting down to formulate a situation analysis is an important step for online business owners. This step helps to prioritize, determine and come up with solutions to potential and current ecommerce challenges.

What kind of questions should you ask yourself with a situational analysis?

The questions you ask yourself when analyzing potential ecommerce situations will help you be better prepared for meeting the challenges. These will be personal and professional questions that require frankness and honesty.

Some of the most common questions business owners must ask themselves are:

1. Who are my ecommerce competitors and how are they faring?

2. What is my annual sales curve like? What are the patterns and trends I should keep in mind?

3. What unique benefit do I provide that my competitors don’t?

4. Who is my best, ideal customer?

5. What is my ecommerce marketing plan?

6. What is my advertising budget and how does it compare to that of my competitors?

7. How does my business stand when side by side with other industries, the market size and industry trends?

Doing a SWOT Analysis

In a previous blog, we discussed the 5 C’s of business commerce: Company, Collaborators, Customers, Competitors, and Climate.

You will recall that the purpose of a SWOT analysis is to build on your strengths while minimizing your pitfalls and weaknesses. Doing this analysis at least once every 12 months will help you guard against potential threats, complacency or loss of perspective.

When Customer is King

When doing the analysis, don’t hesitate to put your greatest assets to work – your customers. Open the floor to them and don’t be afraid to be brutally honest, while being able to accept criticism so that you can grow.

Send out forms and feelers to your clients. Ask them about their experience with your business and ways that you can do better. Now let’s study how to use all of those definitions in your situational analysis for your online markets.

Company Strengths and Weaknesses

Once you have determined your company strengths and weaknesses, it is easy to set future goals. They can be more realistic and you have a better overview of the steps you need to get there.

Perhaps you have also been able to define your budget in alignment with your strengths and weaknesses. You can plan to do more outsourcing if you lack the personal and team. You can also invest more in training your staff, following online tech courses or hiring professionals to help get your managers and IT personnel up to par.

Collaborators and Competitors

Better business relationships are essential for growth. Unless you have chosen the right partners and collaborators, your ecommerce plans may not go as expected.

In our previous blogs, we showed examples of questions you can ask yourself in regards to the market competitors:

  • Who are my primary competitors? Are there any substitutes for my products?
  • Are there any emerging businesses that might impact me? What are their strengths and weaknesses?
  • How do customers think of other companies?

This is all a part of finding your unique sweet spot so that you can brand yourself and your products better. Making a proper business plan for your ecommerce means adjusting to highlight your strengths and stand out in the competition.

Going from Awareness to Action

Putting together a situational analysis and an ideal customer is only half the battle won. Your next step is creating a realistic framework for growth and success.

How do ecommerce merchants compare their businesses against online sellers? And how do they stand out in a global market full of brick-and-mortar retailers who also try to appeal to customers on a digital level?

When selling products online, the best thing you can do is create the customer experience to exceed that of your competitors. Buyers come to you for both – the product and the way they are able to get their hands on it.

If you can make it as easy as possible for someone who needs your product to hold it in their two hands, they won’t look to other sellers for the solution. But that’s a big IF.

Doing a situational analysis for ecommerce solutions also requires research on customer experience. Find out how you can make the shopping experience easy, fun and hassle-free. Know where to attract customers on the platforms they are already frequenting.

Situational Analysis Example

Let's take the example of an online product company wishing to do a situational analysis. Here is an example approach:

  • Market Needs: Natural Scents wants to prioritize natural wellness to a variety of customers. Here is what they should take into account:
  • Selection: Do they have enough variety to compete with other natural products in the market? Is theirs as appealing to the target market crowd?
  • Quality: How high does the quality of the Natural Scents rank when side by side with competitors?
  • Customer Experience: Where will they find consumers? Should Natural Scents get on platforms that their target clients are already on? Amazon commerce, for example? Should they have a working social media plan to include Instagram and Pinterest patrons?
  • Market Trends: What are the beauty trends that Natural Scents should be aware of? And how has this changed over the last five years?

Remember – online markets nowadays change at lightning speeds. You need to be able to adjust – streamline and upgrade to using tools that enhance your business and can compete on a global scale.

Have questions about planning your ecommerce business? Ask us in the comments below!