SWOT analysis - eCommerce

SWOT Analysis- E-commerce

Most of the time we see that the use of electronic techniques for doing business add value either by the reducing transaction cost or by creating some type of network effect, or by a combination of both.

Strengths

1. Global market: E-commerce biggest strength is the boundary less access inother word no brick structure is mandatory to do business or no specific boundary is required. It enables all the companies to expand them to global level. The widening of geographic retail markets may facilitate the development of global retailers
2. Time saving: Transaction through internet is no doubt very fast. It saves time by reducing physical movement.
3. No time constraints: The concept of 24X7 shows that online trans can be used any where any time as there is no time constraints.
4. Price/Product comparison: Information and to choose are some of the rightwhich every consumer has. On the same footing ecommerce provide platform to consumers to compare price and product effectively and efficiently. It will tend to have far greater bargaining effectively and efficiently. It will tend to have far greater bargaining power with suppliers than traditional local or national retailers.
5. Cost effective: Elimination of long chain of middle man,decreasing need of having brick infrastructure and outsource logistic are helping a small business to stand at par with giants.
6. Flexible target market segmentation: The success of business depends on right choice of segmentation . Target market segment here in e commerce is flexible can be modified any time.
7. Fast Exchange of information: “e” will always guarantee fast and accurate sharing of information among merchants and customers and enables prompt quick just in time reply.
8. Faster buying procedure: The buying is just a click away from the seller. No physical movement is required, no hunting of right product at right price is to done by the consumer this make the buying process faster
9. Niche Market: It is a concept of sub segmentation where the product of rare species are available without putting some special efforts by consumer. Almost everything can be sold on internet. Even if products targeted to smaller markets the buyer will be somewhere on net.

Weaknesses

1. Security: Security is a biggest challenge in to progress of e commerce. Customer always found themselves insecure especially about the integrity of the payment process.
2. Fake websites: Many fake websites are available on net which promises betterservice and secure dealing. These web sites can not only disgrace ecommerce but also bring bad name to ecommerce.
3. Fraud: Personal and financial details provided for trading purpose are misused by hackers their personal undue interest.
4. Fewer discounts and bargaining: Hardly online businesses offer discounts and bargaining cannot be possible.
5. Long delivery timing: The task of Delivery is usually outsourced, who do not care about the timing of the seller. They provide their services as per their own convenience. Some time the delivery time may extend to days or weeks which one cannot wait for.
6. Impossibility of physical examination : Products whose choice is merely depend on its physical condition of the product with need personal touch before selection are not suitable fot e-commece business. As Online products cannot be touched, wear or sit on the products.
7. Limitation of products: Only a limited number of products can be available.
8. Lack of personal services: Physical products can be available but lack in personal services which are intangible.
9. Limited exposure: In developing areas where internet is not accessible will have no or little exposure to e commerce.
10. Limited advertising: Limited advertising opportunities are available because in e commerce one cannot go for mass advertising. The advertising is limited only to computer literate person. And out of them only those who are comfortable with e-commerce applications.
11. Customer’s satisfaction: There is no physical and personal or direct face to face interaction between customer and the seller. Therefore the scope of convincing the customer does not exist.

Opportunities

1. Changing trends: People are very brand conscious. They are interested in buying branded stuff rater then local. If such stuff is available cross border they will not mind it ordering through e-commerce. E- commerce is fast and effective even financial transactions can be made from any part of the world. People of tomorrow will feel more comfortable to buy products through internet only.
2. Increasing number of user: Daily number of internet users is increasing. People feel more comfortable to shop online. 
3. Regular Global expansion: E commerce can be operated any where any time without any interruption. It always has a scope of expansion. All new population and existing population who are not the user of e commerce are the target expansion.
4. High availability (24 hour and seven days a week): Along with each and every click of the mouse business is in operation. Those who are busy in day time and cannot spare time for them self, have all the opportunity to shop as per their convenient time even during late night hours.
5. Wide business growth: E business has wide scope and broader vision to grow. Business always took place in gap. Gap filling is a never ending process hence the growth of business is also never ending process.
6. Advertising: Advertising is cost effective as compare to conventional offline system.

Threats

1. Competitors: Along with local competition, global competition also exists. Competition is increasing day by day. Big companies have already entered in this field. They are making people habitual at the cost of their companies.
2. Changes in environment, law and regulations: Change in trends, fashion and fad can distress E Commerce side by side change in law and regulations can also affect it.
3. Innovation: Customers now a days are always in a search of innovative products and technique. Innovation will always work as an extra burden on the pocket of consumer, be either in product, place, promotion and even price.
4. Privacy concerns: Fears that information can be misused lead to spam e mail or identity fraud.
5. No direct interaction: In e commerce there is no direct interaction between customer and the seller. There is no scope of bargaining. People prefer to buy physically as compare to online to experience personal feel.
6. Fraud: Persons using unfair means to operate ecommerce can damage the confidence and faith of common people.
7. Risk: Nature of fraud

Reference :

SWOT Analysis of E-Commerce: Ms Kiran Yadav and Dr. Divya Sharma, Aditi Mahavidyalaya, University of Delhi, India.