SWOT Analysis - Planning Online Business, E-Commerce B Com Notes | EduRev

E-Commerce

B Com : SWOT Analysis - Planning Online Business, E-Commerce B Com Notes | EduRev

The document SWOT Analysis - Planning Online Business, E-Commerce B Com Notes | EduRev is a part of the B Com Course E-Commerce.
All you need of B Com at this link: B Com

SWOT ANALYSIS

Evaluating Business Unit Opportunities

Now that we have learned how to identify industry value chains and break each value chain down into strategic business units, we can learn one popular technique for analyzing and evaluating business opportunities. Most electronic commerce initiatives add value by the reducing transaction cost, creating some type of network effect, or a combination of both. In SWOT analysis (the acronym is short for Strengths, Weaknesses, Opportunities and Threats), the analyst first looks into the business unit to identify its strengths and weaknesses. The analyst then reviews the environment in which the business unit operates and identifies opportunities presented by that environment and the threats posed by that environment. As shown in the following figure which shows the questions that an analyst would ask in conducting a SWOT analysis.

Strengths Weaknesses
  • What does the company do well?
  • Is the company strong in its market?
  • Does the company have a strong sense of purpose and the culture to support that purpose?
  • What does the company do poorly?
  • What problems could be avoided?
  • Does the company have serious financial liabilities?
Opportunities Threats
  • Are industry trends moving upward?
  • Do new markets exist for the company's products/services?
  • Are there new technologies that the company can exploit?
  • What are competitors doing well?
  • What  obstacles  does  the company
    face?
  • Are there troubling changes in the company’s business  environment (technologies, regulations)?

                            SWOT analysis questions

  • By considering all of the issues that it faces in a systematic way, a business unit can formulate strategies that will take advantage of its opportunities by building on its strengths, avoiding any threats, and compensating for its weaknesses. In the mid- 1990s, Dell Computer used a SWOT analysis to create a strong business strategy that has helped it become a very strong competitor in its industry value chain. Dell identified its strengths in selling directly to customers and in designing its computers and other products to reduce manufacturing costs. It acknowledged the weakness of having no relationships with local computer dealers. Dell faced threats from competitors such as Compaq and IBM, both of which had much strong brand names and reputations for quality at that  time. Dell identified an opportunity by noting that its customers were becoming more knowledgeable about computers and could specify exactly what they wanted without having Dell salespersons answer questions or develop configurations for them. It also  saw the Internet as a potential marketing tool. The results of Dell's SWOT analysis appears in following figure:
Strengths Weaknesses
  • Sell directly to consumers.
  • Keep costs below competitors’ costs.
  • No strong relationships computer retailers
Opportunities Threats
  • Consumer shopping desire for. one-stop
  • Consumers know what they want to 
    buy.
  • Internet could be a powerful marketing tool.
  • Competitors have stronger brand names.
  • Competitors have strong relationships with computer retailers.

                             Results of Dell’s SWOT Analysis

The strategy that Dell followed after doing the analysis took all four of the SWOT elements into consideration. Dell decided to offer customized computers built to order and sold over the phone, and eventually, over the Internet. Dell's strategy capitalized on its strengths and avoided relying on a dealer network. The brand and quality threats posed by Compaq and IBM were lessened by Dell's ability to deliver higher perceived quality because each computer was custom made for each buyer.

Offer running on EduRev: Apply code STAYHOME200 to get INR 200 off on our premium plan EduRev Infinity!

Related Searches

pdf

,

Semester Notes

,

Summary

,

Free

,

E-Commerce B Com Notes | EduRev

,

Extra Questions

,

Viva Questions

,

SWOT Analysis - Planning Online Business

,

SWOT Analysis - Planning Online Business

,

Sample Paper

,

E-Commerce B Com Notes | EduRev

,

MCQs

,

ppt

,

SWOT Analysis - Planning Online Business

,

practice quizzes

,

Previous Year Questions with Solutions

,

Objective type Questions

,

past year papers

,

video lectures

,

Exam

,

E-Commerce B Com Notes | EduRev

,

mock tests for examination

,

study material

,

shortcuts and tricks

,

Important questions

;