ANALYSIS OF SHOPIFY

Shopify is a technology company that provides an online software to help businesses sell their
products and services online. It provides small and large businesses with all the tools needed to
get their online store up and running in as little time as possible. The services it offers include
domain registration, software that lets consumers choose a theme to create and online store and
mobile application, collect and process payments, calculate shipping rates and offer fulfilment
services. They earn revenue by charging customers a monthly subscription fee as well as taking a
percentage of all transactions done on their platform.
CULTURE AND TEAM
Culture is the product of strong values and purpose, empathetic leadership, and a place where all
people feel they belong (shopify.com, 2021). For employees of Shopify, the culture of the
company is not just a set of corporate rules set up for people to follow, It's having a set of
principles that people are committed to every day (Julia Bowen, 2018). Them main company
culture is to care for its employees through skill development and keeping them and their family
healthy. They also believe in flexibility and freedom as it fosters creativity and problem solving
while also encouraging diversity because they believe all perspectives are important and when
you allow all ideas come to the table, great products are created.
LEDERSHIP AND ORGANISATIONAL STRUCTURE
Shopify uses the divisional company structure with each division or department having a head
which team leaders report to. There are 8 departments in total who all report to the chief
executive officer of the company.
VALUE PROPOSITION
Shopify offers value to its customers in different ways, but its main value proposition are as
follows:
1. Ease of use: the company prides itself in offering an easy to use platform which allows
any individual without coding and technical experience to be able to create, launch and
manage an online store to sell goods and services within minutes.
2. Lots of functionality: they offer a lot of customizable features using third party plugins
and also offer essential services like payment collection and delivery services all in on
single platform.
3. Affordable: it offers all these services at an affordable and competitive price which is
appealing to customers.
4. Reliability and security: while building a strong and trust worthy brand, it offers its
customers the peace of mind gotten from using a company that is dedicated to offering
the best to its customers while providing security and the latest in technology.
REACTION TO THE COVID PANDEMIC
The Covid pandemic brought a lot of uncertainty and disruption to the normal operations of most
companies as almost everything apart from essential services were required to close to prevent
the spread of the disease. But Shopify were one of the few companies to thrive during this
period, it’s revenue almost doubled to $714 million dollars and it also saw a 71% rise in the
number of new stores registered on its platform compared to the previous year (Wall street
journal, 2020). As the pandemic forced brick and mortar stores to close down, to survive, all
these stores had to move part or all of their operations online giving them a new avenue to sell
their goods or services. It was simple, move online or close down. Only large firms with deep
pockets that could cushion the huge loss suffered by loss of sales where not forced to move
online. So for the small businesses there was no option but to move online, and Shopify was well
placed to meet that need. Their easy interface and all in one platform made it the best product out
there for businesses to use to move online quickly. Its lower fess also made it a better option
compared to competitors like Amazon.
Shopify noticed this rare opportunity and adjusted it’s business model to appeal to small
businesses by offering new incentives like a 90 day free trial for all new customers to entice
them unto their platform to get a glimpse of the incredible value the company offers. They also
offered gift-card options, online tipping, a curbside pickup option and a new Shop application,
where customers can search for products within the Shopify universe (WSJ.com, 2020). Shopify
has also focused on collecting most of it’s revenue from fees charged from payment processing
on its platform, making the company focus on increasing the volume of sales on its platform with
innovative products like the consumer focused app call the shop.
SHOPIFY POST PANDEMIC
Although Shopify acquired tremendous success during the pandemic period and shooting up to a
valuation of $177 billion dollars, it does not need to rest on it’s laurels especially when it is seen
that the growth during the pandemic was still less that the earlier recorded growth between 2015
and 2016. This shows that the company is almost reaching saturation point in the Canadian and
United States market and needs to start expanding fast into other international markets. After
shifting its business model to focus on getting revenue from the fees charged per transaction, the
most important thing for the company at the moment is getting as many transactions as possible
on its platform.
The pandemic has also shown Shopify who its real customers are. The real customer is the one
that extracts the most values from your product or service, and that has shown to be small
businesses. Shopify before now targeted large brands to move their operations online using their
platform, although this was not a bad idea, it can be seen that the smaller businesses get the best
value for it and therefore they can be identified as the true customers for Shopify.
Finding ways to meet up with the competition will be crucial for Shopify post pandemic, because
others have noticed its quick rise during this period, a lot of competitive products will emerge in
the market to take from its market share. The company must ensure to stay ahead of the
competition by continuing to improve on its value proposition and continue to come up with
innovative ideas that will keep them ahead of the competition.
RECCOMENDATIONS
1. Shopify should move to emerging markets Asia and Africa with high population figures
and remove its monthly subscription fee so that it can get a very large amount of
businesses registered on its platform selling their goods and making from the charges on
transactions. Theses emerging markets may not have enough businesses that can afford
the subscription fee so opening it up will exponentially increase that number.
2. Focus on signing smaller businesses to the platform.
3. The culture of the company which focuses on flexibility has proven to be one of the very
core values that helped the company reposition itself quickly and efficiently during the
pandemic, this culture should be encouraged and reinforced to help the company adjust to
any future disruptions.
4. As Shopify is experiencing immense growth quickly, I would suggest that they move
their organizational structure to a matrix structure which is focused on teams working
independently and focusing on tasks. The divisional company structure tends to be less
efficient as the staff strength grows larger and innovative ideas get lost through the
grapevine.
5. Diversity cannot be stressed enough, as the company seeks to expand to other continents
it must maintain its diversity culture because it is the backbone to innovation and a stable
work environment.
6. Technology is the backbone on which Shopify was built and the company will have to
continue to improve in this area and expand integration with third party software’s to
increase usage of its product.

REFERENCES
• https://www.shopify.com/careers/culture
• Shopify, Suddenly Worth $117 Billion, Is One of the Biggest Pandemic Winners,
https://www.wsj.com/articles/shopify-suddenly-worth-117-billion-is-one-of-the-
biggest-pandemic-winners-11599557400
• Careers at Shopify, https://www.cleverism.com/company/shopify/
• Inside Shopify, HUNT, KRISTIN
http://web.a.ebscohost.com.hult.idm.oclc.org/ehost/detail/detail?vid=0&sid=bcb8d3
8d-8202-43f5-968f-
d0ecb6b4288d%40sessionmgr4006&bdata=JnNpdGU9ZWhvc3QtbGl2ZSZzY29wZ
T1zaXRl#AN=128605376&db=bth
• Shopify: customer service: Twitter: @FTLex [Middleeast Region], Financial Times;
London (UK) [London (UK)]07 May 2020
https://search-proquest-com.hult.idm.oclc.org/docview/2409899091?accountid=78988
• Meet the people with power at Shopify
 https://thelogic.co/news/exclusive/meet-the-people-with-power-at-shopify/
• Shopify president says pandemic e-commerce growth is here to stay, Adena Ali, BNN
Bloomberg.
https://www.bnnbloomberg.ca/shopify-president-says-pandemic-e-commerce-growth-is-
here-to-stay-1.1521639