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SWOT Analysis
Strengths
- Shopify is considered one of the industry leaders when it comes to e-commerce solutions, giving it an advantage over competitors. The Canadian company founded in 2004 is worth $1.7 Billion today. Some of the key attributes that Shopify believes in are security, scalability, reliability, performance, and deployment.
- The Canadian company has grown immensely, making Shopify an industry leader when it comes to e-commerce solutions. The company stands by the product that they offer by providing clients with great customer service, thus increasing client retention and satisfaction. As of December 2018, there are over 4000 Shopify employees all situated in Ottawa, Toronto, Montreal, Kitchener, and 2 in the United States. They offer 24/7 customer support to clients making customer satisfaction a guarantee.
- They provide employees with extensive training & learning which aid in their growth and development of theirs. Their core culture and values aid in creating a positive work culture which in turn causes employees truly believe in Shopifys vision thus creating a sense of unity within the workplace. Shopify gives employees the freedom to take a break from their regular jobs and experiment with a different area that is of interest to them. These days are called Hack Days , they add value to the company by coming up with new ideas which will help Shopify grow. Shopify has been awarded one of the best places to work by Glassdoor.
- The Shopify Ecosystem is a concept of a dealer community whereby the need for competition is eliminated and promotes working together and continuously growing. The event brings together people, networking that is interested in sharing knowledge and picking ideas off of one anothers brains. The ecosystem helps with creating new insight into new and innovative ideas. The community Shopify has built has given so many new and refreshing opportunities for like-minded individuals everywhere.
- Shopify also has a strong cash flow, making it easy to invest in new and coming projects and the opportunity to grow bigger. In 2018 the company grew 54% in revenue, $343.9 million compared to 2017. As of December 31, 2018, Shopify now has over $1.9 billion in cash, cash equivalents, and marketable securities. The company has made history by becoming the first eCommerce giant to cross the $1 billion dollar threshold and will continue to grow at its current growth rate.
Weakness
- Shopifys lack of choices available to the different demographics is one of the main weaknesses they deal with. The products they offer have a huge gap which gives its competitors an advantage. As shown on the price breakdown below it takes a jump in the price, which may not appeal to all the clients
Here’s a breakdown of the pricing for each plan:
- Lite Plan $9 per month + a Buy button
- Basic Shopify Plan $29 per month + 2.9% and 30¢ per transaction
- Shopify Plan $79 per month + 2.6% and 30¢ per transaction
- Advanced Shopify Plan $299 per month + 2.4% and 30¢ per transaction
- Shopify Plus pricing plans start around $2000 per month + 1,6% and 30¢ per transaction
- As part of a company that uses Shopify daily, one of the weaknesses it carries is the limited access available to the user. The Back-end server is not available, and the information is not shared. When uploading pictures on Shopify, there is an issue of the images becoming more pixel and blurry.
- Another weakness that Shopify struggles with is the lack of investment in new technology. Shopify does have a higher amount of equity to invest with in comparison to a large majority of its competitors, however, since technology is growing so fast the demand to invest and come up with new innovations is hard to keep up with. They need to do their due diligence in investing in the proper research and development in order to grow any further.
Opportunities
- Shopify currently leads the space in providing online stores with a safe and measurable way to continually expand. Perhaps they should exploit their systems for other businesses that are not only limited to e-commerce
- They should invest and open up their space to have the capability of more drop shipping companies that are not only limited to Aliexpress, Alibaba and Oberlo
- Changes in technology can make it so their GUI interface runs as smoothly as possible
- Expansion of eCommerce all over the world, not just in North America
- Opportunities to create new revenue streams and diversify into selling other products because of their well-known brand
- With the United States rapidly expanding its economy, this will allow Shopify to integrate itself more fluidly into the US economy.
- Shopify Plus is their answer to large eCommerce businesses wanting to use their service. By having the capability to handle more than 10,000 orders per minute. Perhaps expanding this service to an even broader audience will aid in the expansion
- Increasing the capability of supporting multi-currencies for users to shop with will aid in strengthening their position internationally and opening the door to a larger market
- Expansion through the use of VR and AR-based shopping experiences could be a start of a new revolutionary way that people shop because you would have the capability to preview products in your home before buying them
Threats
- Given the nature of Shopify and the lack of skilled workers in human resources can lead to a challenge in the near future
- Increased number of competitors in the online space of eCommerce such as Godaddy.com etc. That allows clients to create and build websites for their businesses. How can Shopify separate itself from this?
- Regulations by the Government and increased threats of legal actions are causing Shopifys expansion to slow down
- From an international standpoint, if Shopify is looking to expand. The possibility of Brexit currently still looming in the air threatens their overall business
- If Brexit occurs, there may also be a huge disruption in products being delivered due to products having to go through customs. This may cause longer than normal wait times for consumers waiting for the product to arrive. For example, when Canada Post went on strike, consumer deliveries were delayed for weeks
- Newer technologies being created have the possibility to disrupt the way their supply chain model runs such as blockchain
- Shopify has no other line of products other than creating online businesses which threaten the business to become a one-stop shop
- In terms of demographics, millennials are always looking for the next best thing to invest in, they do not have loyalty to companies like Baby Boomers. As more and more Baby Boomers begin to retire, Canadas growth rate will continually decline.
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