Hi, everybody!
My name’s Matt, and I’m the Marketing Communications Manager here at Volusion.
Welcome to Two Minute Tuesdays, where we give you two minutes of ecommerce advice to bolster
your online success.
I’ve been a lot of places and seen a lot of faces, and a lot of times people say, “Matt,
I don’t have a business degree.
I don’t know what to do for business analysis.”
Well, scratch that, because today we have an extended edition of Two Minute Tuesday.
We’re going to go over three of my favorite, most basic and efficient models to analyze
your business and see what you have to offer.
Analysis 1 is Simple SWOT analysis.
SWOT stands for “strengths, weaknesses, opportunities and threats.”
All you have to do is make a grid that outlines each.
Your strengths are pretty self-explanatory.
What are you good at?
What are you doing well in?
Weaknesses would be the opposite.
What challenges do you face?
Where is there room for improvement?
Opportunities: Is there is a new opportunity on the horizon that you could take advantage
of?
Is there a weakness that you could turn into a strength?
That would go under the “O.” Finally, threats: Are there any external or internal
forces that might come against you that you have to face in the near future?
Effective model 2 is Porter’s Five Forces.
Porter’s Five Forces is a great way to outline your competitive landscape.
It’s a great supplement and complement to your SWOT analysis, which you’ve just done.
Let’s dive in.
Force number 1 is the entry of new competitors.
How easy is it for people to enter your immediate competitive space?
Think about Boeing.
It’s really hard for them to have a lot of competitors because, well, making a plane
is hard.
If you’re in apparel sales, that’s different, because a lot of people have sewing machines,
and a lot of people have suppliers for fabric and all they would need to start a clothing
business.
Force number 2 is the threat of substitutes.
In other words, is your product easily substitutable by something very similar or something new?
Think of engines.
A gas engine could be easily substituted by green energy or another alternative.
So that’s a good example of a product being easily substitutable.
Thirdly, what is the bargaining power of your buyers or your customers?
Is there any new technology?
Are they having more income or less income?
What is their capability to actually buy from you?
Keep that in mind because that’s important too.
Fourthly, on the other hand, what’s the bargaining power of your suppliers?
Is your product supplier raising prices or lowering prices?
That’s something to think of too.
Last, but not least, what’s the rivalry among your existing players?
Are you in a very fiercely competitive industry, or is it more like friendly competition?
Keep those in mind, and it’s a great way to make sure that you’re on the right track.
Number three in our list is known as the Five C’s of Marketing.
This is a great way to figure out where you stand in the overall marketplace and what
you can do to boost your brand.
The first C is company.
Quite simply, who are you?
What do you represent?
What are you selling, and what are you all about?
C number two is your collaborators.
Who’s your ecommerce provider?
Who’s running your credit card processing?
Who is your supplier?
C number three is your customers.
Who is your target audience?
What motivates them?
Listing all these out really ensures that the messaging from your company to your customers
is as effective as possible.
C number four, and this is a big one: Who are your competitors?
Who’s out there to get you?
Who are you trying to beat?
Who’s in your immediate space?
Who’s in your expanded space?
Having those lists will really help with your marketing efforts as well.
C number five: What is the climate?
In other words, what are the competitive forces out there beyond your actual competitors?
As far as the industry is concerned, are there any new developments out there?
What is the overall feeling when it comes to your business?
Keep these three models in mind when you’re trying to analyze your business.
It may seem like a lot of work upfront, but I promise you it’s absolutely worth the
effort.
If you have any questions about these models, I’m happy to help.
Just leave me a comment in the box below and I’ll get right back to you.
From me to you, happy selling.