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SWOT analysis is a commonly used business tool that can help boost future business performance. It helps identify how certain internal and external factors affect business. Small and big companies rely on this technique. The traditional SWOT analysis can also help web startups.
Web startups often use SWOT to find out how user-friendly a website is. In this age of digital advancement, organizations continually seek new ways to improve their web. They wish to enhance user experience. Many of them are perhaps unaware of the best alternatives.
SWOT is a structured planning method. It is commonly used to evaluate four factors. The factors evaluated are Strengths, Weaknesses, Opportunities, and Threats. These are classified into Internal and external factors. Strengths and weaknesses are internal factors. Company has control over these. As firms cannot control opportunities and threats, they are external factors. The analysis helps companies involved explore what they are good at and what they can improve.
Most founders, top management, strategists and C-level executives know how SWOT analysis aids to understanding better and position their companies. In fact, it is essential for the organizational decision-making process.
In this article, I will explore how SWOT can help in the vast world of internet. It might seem surprising to many that web startups conduct SWOT. They enjoy great benefits of the analysis. One of the most common uses of the analysis amid web startups is to find out how their website is performing on User Experience, also called UX, in comparison to other sites.
Like traditional SWOT, SWOT for web startups examines the strengths, weaknesses, opportunities and threats of your product. In this case, the website is the product. Website owners gain a clearer understanding of what they need to improve. Common goals for web startups are:
- To achieve a higher conversion rate
- Boost sales
- Earn more profits.
Example of a SWOT Analysis for an e-commerce store
- Low-cost leadership
- Strong relationship with the suppliers
- Not the best product quality
- Slow response to customers’ inquiries
- Government’s support in emerging local markets
- More customers shifting to online shopping
- Indirect competitors entering the industry to present direct competition
Example of a SWOT Analysis based on User Experience (UX)
- Impressive Global navigation bar
- Easy to navigate through the website
- Attractive banner
- The subscription process is too lengthy
- Poor mobile optimization
- Hard to read the text on the site
- Speed in loading
- New ways to encourage repeat visits
- Competitor’s exclusive social media engagement
- Unique app function by competitor
Tips: Remember that most often, the competitors’ weaknesses are your opportunities. Try to exploit your opportunities fully. The competitors’ strengths are threats for your startup. Take measures to avoid them.
Importance of usability testing
When doing a SWOT for website, it is critical to conduct a usability test. The goal of this step is to recognize key strengths and weaknesses. You need to gather honest feedbacks about your website. So, do not request friends and family to take the test. It is best to seek feedback from existing users.
The usability test will enable you to assess the UX of your products. It will gather qualitative data. For example, it will collect insights to why the users are confused or why they leave your site quickly. I would suggest you not to depend on Google Analytics or similar analytical tools entirely. These tools will only help find answers to questions like when people leave the website.
Often, website owners think their website is good and refrain from analyzing much. However, this only shields them from the harsh reality. Ultimately, it is your users who decide if they want to stay or leave the site.
You must understand that your products should be user-centric. It is designed for end users. After the test, build on your strengths and try to eliminate weaknesses.
Examples of the internal and external factors affecting web startups
Internal factor – Strengths
The first step for all SWOT is to make a list of SWOT. You should include advantages. These are elements not present in the competitors’ websites, and so provide a competitive edge. It will help you reach your business goal quicker. Website strengths are linked to the main objectives. Some examples are:
- Customer-centric design and messaging
- Effective calls to action
- Relevant and useful content
- Intuitive navigation and search
- Quick and simple checkout process
- Responsive design that offers full mobile support
Internal factor – Weaknesses
Weaknesses are the characteristics of your website that prevent you from attaining your business goal. Compare a better-performing characteristic of a competitor’s site to the same feature on your website. If your competition executes it better, consider the element as your weakness. The weaknesses do not have to be comparisons. Outdated or incapable characteristics can be weaknesses too. Some examples are:
- Outdated or ineffective design
- Weak or hidden calls to action
- Content that is not customer-centric
- Puzzling structure and navigation
- Clumsy and lengthy checkout process
- Lack of mobile support
External factor – Opportunities
Create a similar list for external opportunities. Include ways in which the firm can improve its performance and competitive advantage. Some examples are:
- New technologies to improve user experience
- Emerging new and untapped markets
- New market segments and niches
- New design trends to convey messages better
- More efficient marketing tactics
- Positive changes in socio-cultural factors
External factor – Threats
In the threats list, add factors that are outside of your control and can prevent you from attaining business objectives. The threats can be specific features that your competitor has but you do not. Some examples are:
- Appearance of new competitors
- Competitors imitating features or ideas
- Changing customer needs
- Fraudulent activity
- New laws or regulations
- SPAM & unsolicited advertising
- Upgraded browser software