SWOT Analysis

For every successful company to prevail in the

market and to constantly grab consumer attention,
it is very important to conduct a SWOT analysis
once in a while. SWOT analysis is one of the most
crucial frameworks for a business that provides
assessment tools using strategic planning
techniques. It not only assesses current and future
potentials but also internal and external factors.
Along with identifying the internal factors of a company which are the strengths and
weaknesses of a business and the external factors which consist of possible threats and
opportunities, it also focuses on analyzing the competition, performance, risk, potential, sub-
divisions, product lines and other entities of a business. Incorporating the data in future
endeavors that is found through conducting a SWOT analysis often works as a guide towards
strategies which are proved to lead the business to a more sustainable and successful position.
One of the main advantages of designing this analysis is it can help facilitate a data-driven, fact-
based, realistic look at the core competencies of a company. It is also important for a business
to maintain the analysis by keeping a tab on it’s accuracy from time to time while avoiding pre-
conceived notions or any possible gray area and instead emphasize on the contexts of real-life.
Precisely, the two key purposes of a SWOT analysis is to-provide the base to develop a strategy
and help an organization determine it’s strategic goals. In addition to that, this particular
framework is considered powerful for the decision-making process as it helps a company to
unravel any opportunity leading to success which were previously overlooked and also shed
light on possible threats before they become difficult to overcome. Another great factor about
using this framework is that it significantly emphasizes on identifying the competitive
advantage of a company which eventually maximizes the strengths while ensuring threats are
kept at bay.

The primary objective of a SWOT analysis is to help an organization become aware of all
possible factors affecting the decision-making process. It can be also referred to as a systematic
process that strengthens a company’s core competencies to overcome challenges while
pursuing new leads. SWOT analysis was first used in 1960s in a study that revealed the reasons
behind the failure of corporate business planning. Since then it has been consistently used by
all potential and existing small and large business to start and grow their companies. Before
committing to any sort of company action, it is important to first conduct SWOT analysis since it
works as a guide whether a business is revamping it’s strategies and internal policies, exploring
new objectives or initiatives or considering opportunities to completely alter existing plans. At
times, it is recommended to conduct this analysis just to identify any possible loophole a
business might have to help improve the business operation as required. This analysis can help
a business determine if the company is performing at an optimal level while figuring out if any
operational activity needs a thorough adjustment. Through this process, a business can
discover ways to eliminate or improve all the possible weaknesses of a company while
capitalizing on it’s strengths.

It often takes decision makers of a company to first come up with objectives they hope to
accomplish for the organization, business, entity or initiative. After that, the list down the four
different components of this framework. While taking a look at all the four components of
SWOT analysis, it can be seen that each of them has a different purpose to serve and has
characteristics which are in no way similar to others.

Internal External

Strength- capabilties that

Opportunities- refers to any
enable the company to
ideas, tools, drivers, forces,
perform at a satisafactory trends and events that makes
level which is adequate to it possible for a company to
yield revenue, goodwill and climb the ladder of success.
success.

Threats- any possible foces or

Weakness- characteristics events that is often
that constantly act as a unprecedented and beyond
barrier from performing control which must be looked
well and thus welcome into with careful consideration
competition. and must be dealt with before
it causes any kind of disparity.

SWOT Analysis of FLIPKART

Flipkart is the most renowned e-commerce platform of India

worth more than 11 billion dollars. Hence for a company as big
as Flipkart, looking at it’s SWOT analysis is important to know
how it managed to overcome it’s challenges while
strengthening it’s core competencies to sustain in the market
for so long with sheer perseverance that led to it’s massive success over the years.

Strengths in the SWOT analysis of Flipkart:

* Goodwill- As mentioned before, Flipkart is the largest E-trade organization with the net worth
of over 11 billion dollars and operates numerous prominent brands under it’s name. No other
e-commerce platform has been able to reach the position where Flipkart is as of today since it
has already secured a sustainable position in the industry by gaining faith from target
customers since the very beginning of it’s journey.

* Brand image- Flipkart has managed to build up it’s image as the most eminent E-business
organization in India with the help of conventional marketing tools like TV promotions,
magazine, billboards, sponsorships, brand ambassadors and most importantly through web-
based networking media. Brand exercises like “Huge multi-day” has also significantly helped to
add to the reputation of the brand.

* Experienced organizers- According to many sources, the founders of Flipkart have been ex-
amazon workers which means having related knowledge, expertise and skills in the e-trade
industry have enabled them to work in solidarity with coherence that is responsible for the
gigantic growth of the business.

*Expansion- Through it’s acquisitions of businesses like weread.com, chakpak.com, letsbuy.co,

mine360 and Myntra has helped the platform to extend in the e-business arena while utilizing
the capabilities and assets of procured companies.

*Logistic arm- owning a logistic arm like e-kart and online installment gateway solution like
payzippy have helped the organization to have it’s overall operating expenditures in control to a
great extent which ultimately worked as a benefit to the customers.

* User experience- Flipkart has always prioritized customer experience like no other e-
commerce platform. To ensure that, a regular review of customer feedback has been always
taking place on a holistic approach so that it helps the company to know where is it lacking and
where appropriate adjustments must be taken according to the consumers.

* Warehousing and delivery system- the firm has highly efficient global and domestic delivery
systems. It has invested heavily in the warehousing and delivery systems to ensure that on time
delivery is maintained through it’s E-kart platform that supports at least 4100 countries in the
world.

* Quality HRM practice- It ensures best employee relationship that yields increased output thus
adding to the goodwill and overall image of the brand.
* Exclusive affiliation- Flipkart also has exclusive tie-ups with big brand companies like Xiaomi,
Apple, Motorola which led to successful product launches. It is also backed by global investors
like Tiger Global, DST Global and Naspers which assure them a constant supply of merchandise.

*Product manufacturing- the company has also ventured into product manufacturing like
Digiflip tablets, health care devices and Citron home appliances which played a significant role
in the expansion of the business.

Weaknesses in the SWOT analysis of Flipkart:

* Acquisition cost- Due to constantly faced by challenges from rival companies and other
prospective business corporations, Flipkart happened to invest a gigantic amount of money into
acquiring many brands to further reinforce it’s position in the market and having to bear such
high acquisition cost is a constraint for the company itself.

*Limited distribution channel- Despite the fact that it’s logistic arm has been able to cut costs
for the company, it is yet to overcome the constraints on it’s distribution channel system. Since
through utilization of redistributing, mammoth rivals like eBay and Amazon are able to
distribute products anyplace worldwide, Flipkart still has a long way to go to reach that
position.

*Lack of Independent board- Flipkart is not an investor driven organization which results into a
lot of discrepancy in the company which stems from a lack of proper monitoring system,
supervision of a higher authority and lack of auditing system. According to a report in 2017, due
to the uncertainty among investors backing up Flipkart’s business plan, Tiger Global was
planning to share it’s share to Microsoft. Therefore, it is important for Flipkart to invest in
strategies that will boost sales volume and maintain continuity to reinstate investor and
customer confidence.

*Issues with online payment system- Flipkart has a wide range of customer data base, in spite
of that, many customers often face issues in the online payment system simply because they
have not been guided through the entire payment process. Moreover, flipkart products are not
yet reachable to many remote areas which means a huge portion of total population is always
left out when considering the overall customer base.

*Not-so-profitable operations- Flipkart is often known for it’s expansion and huge growth in the
market but when it comes to the operations of the business, Flipkart still needs a lot of
amendments in it as it never really seems to focus on cutting it’s operational costs in order to
increase profit. Rather it happens to invest in a lot of advertisement to sustain an improve it’s
brand awareness which is often costly. Despite the increased modernization over the years, the
company has not been able to increase sales revenue substantially.

*Maintenance of servers- According to study in 2014, servers of Flipkart were showing constant
errors as it was not being able to take up the huge load of orders placed by numerous
customers all over the nation which led to frustration among consumers. This shows that
servers are not regularly checked, monitored or maintained which is required to maintain a
seamless order placement method. Due to this reason, Flipkart’s website is quite susceptible to
malfunction where in some cases, ordered products disappear before making the purchase and
such website failures often negatively impact on the sales of the company.

*High investment costs- For a company to grow consistently like Flipkart, it needs to keep
investing on multiple ventures which might not be profitable at all times. Same happened with
Flipkart as due to huge investments costs, it often had to take the burden of gigantic losses that
hurts the image of the brand.

Opportunities in the SWOT analysis of Flipkart:

*Expansion in developing economies- Flipkart has now reached that stage where it can easily
extend it’s operations in developing countries like it’s rival companies Amazon and eBay have
already been doing since decades. The more it expands globally like this, the more will it able to
earn revenue on a greater scale.

*Supply chain management- Flipkart has already faced a lot of consequences due to the
constraints of it’s existing delivery system. However, through the optimization of it’s supply
chain, it can easily compete with other players in the market and can manage loosing sale on
account of not making the product available due to delivery constraints.

*Expansion of business- Flipkart is known for it’s enormous expansion in the market over the
years and by using this strength, Flipkart can target other versatile emerging markets to yield
more revenue as it will lead to an increased economies of scale.

*Product category expansion- the main advantage of owning an immense e-commerce

platform is that, the company has multiple ways to extend the product categories it offers on
their platform. That’s because, consumers’ demands have no bounds, therefore by providing an
even wider range of products on the website, the company will be able to have a greater
customer base that will also help to reduce the acquisition and customer switching cost.

*Utilize India’s growing logistic sector- India’s logistic sector is expected to grow at a rate of up
to 10 percent over the medium term according to ICRA, domestic rating agency. As India is
looking forward to grow as a manufacturing hub, Flipkart can use this opportunity to use it’s
own logistic arm E-kart as a 3PL provider to businesses in India.

Opportunities during the pandemic caused by Covid-19:

Post covid opportunities:

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