competitive analysis is a strategy where you identify major competitors and research their products, sales, and marketing strategies. In doing so, there are two strategies commonly used- differentiation advantage and low cost to customer advantage. Upon reviewing the pros and cons of each, it would be to my venture’s benefit to utilize the differentiation advantage. With so many e-commerce ventures in the market and a steady influx of new entrants, having diverse products is a sure way to segment my venture.

The differentiation strategy is an approach used by businesses that focuses on providing customers with something unique, different and distinct from items their competitors may offer in the marketplace (n.d., 2020). The main objective of implementing a differentiation strategy is to increase competitive advantage. The differentiation strategy is a key to successful marketing, competing, and building sustainable competitive advantage. Strategic positioning is helpful in outlining unique value, overall branding, core marketing message and positioning. Similarly, strategic action provides focus on creating buzz, creating a niche market, and conveying the brands differentiated advantages.

In addition to differentiating the brand, it is important to create an advantage strategy. An overarching question for any entrepreneur is to understand the environment in which they will be operating. The environment is in reference to existing products and services within a marketplace, and a value proposition. There are several strategies that can be used to the advantage of entrepreneurs in the e-commerce industry:

  1. Pick a specific niche & target audience
  2. Have a personalized website
  3. Use various social media platforms to showcase the brand
  4. Create new partnerships
  5. Interact with customers

Firstly, it is imperative to select a specific niche and target audience (Sajid, K 2020). This makes marketing easier and the search made by customers more practical and quicker. Having a personalized website that clearly outlines the products/ services being sold, and how the brand is different is a useful strategy as well. Once the content has been segmented the brand can begin utilizing additional social media platforms to showcase their brands. Brands should not limit themselves to the confines of their website, but they should lean into resources such as Instagram, Facebook, and YouTube especially if their target audience frequents these platforms. Upon increasing brand exposure, there is more likelihood for creating new partnerships which can lead to further growth. Lastly, brands should not take their growing customer base for granted. They should find ways to interact with customers and let them know how much they are appreciated.

Timing is everything and there are external factors that can help strengthen the advantage strategies in place. Conducting environmental scans on a semi-annual or annual basis can help select a time that may be more ideal in applying these strategies (Jessee, T., 2020). Environmental scans help with identifying external factors which makes it a valuable exercise. It can help brands take advantage of opportunities before their competitors do. By conducting these scans frequently, it can ensure that brands stay current on external factors that can impact the company in both positive and negative ways. 

The economic external force impacts the e-commerce industry in various ways. Factors such as inflation, interest rates, labor and government monetary policies influence levels of production and demand for goods and services.Higher economic activity means faster growth and higher revenue for the Ecommerce industry whereas lower economic activity means just its opposite. In this way, economic factors can have a direct and deep impact in the ecommerce industry. Additionally, political forces such as the stability of government, political changes in legislation, and global influence impact the state of the e-commerce market. Political chaos can result in the disruption of e-commerce business. The political and regulatory challenges impacting the e-commerce industry have constantly increased. Political stability in most regions of the world leads to economic stability. Social forces such as demographic influence and lifestyle factors impact the industry as well. Lastly, due to the nature of the e-commerce industry and how it relies heavily on technology, this particular factor strongly impacts the industry. This component presents pros and cons that are integral to the success of a venture within this market. Advancements can lead to a better customer experience, smoother and faster processing, and most importantly completion of sales. 


Cole-Ingait, P. (2016, October 26). How Do Economic Forces Affect E-Commerce Organizations? Retrieved November 10, 2020, from

DIFFERENTIATION STRATEGY. (n.d.). Retrieved November 10, 2020, from

Heagney, J. (2016). Fundamentals of project management. New York: American Management Association (AMACOM).

Jessee, T. (2020, July 28). How To Identify External Factors That May Affect Your Strategic Plan. Retrieved November 10, 2020, from

Pratap, A. (2018, October 08). PESTEL Analysis of the E-Commerce Industry. Retrieved November 10, 2020, from

Sajid, K. (2020, May 27). 7 Strategies for Competitive Advantages in eCommerce. Retrieved November 10, 2020, from

Join the Conversation


  1. Shay,
    Great job on the article and good job identifying the external factors that come into play with you e-commerce venture. I think in this case you hit the nail on the head by choosing a differentiation strategy for your brand. With all of the competition out there, you will really need to ensure that you get buyers and keep them coming back for your unique brand!

    Good job!


  2. #1 Priority here is knowing your target audience as you said. How can we successfully market our business if we don’t know who exactly we are marketing to? Once we have a specific audience in mind, we can narrow down the search create the best business they will come to.


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