3.1.3 - SWOT Analysis

Question 1

Define and explain SWOT Analysis?

Answer 1

• Strengths; Internal factors within a business that can help it achieve its objectives.
• Weaknesses; Internal factors that could prevent a business from achieving its objectives.
• Opportunities; External business circumstances that can help it achieve its objectives.
• Threats; External problems that may prevent a business from achieving its objectives.

Question 2

Define Strengths?

Answer 2

• Advantages of the business
• What unique or low-cost resources does the business have?
• What do people in your market see as your strengths?
• What factors mean that you “get the sale”?
• What is your organization’s Unique Selling Proposition (USP)?

Question 3

Define Weaknesses?

Answer 3

• What could you improve?
• What should you avoid?
• What are people in your market likely to see as weaknesses?
• What factors lose you sales?

Question 4

Define Opportunities?

Answer 4

• What good opportunities can you spot?
• What interesting trends are you aware of?
• Useful opportunities can come from such things as:
- Changes in technology and markets
- Changes in social patterns, population, lifestyle changes etc.

Question 5

Define Threats?

Answer 5

• What obstacles do you face?
• What are your competitors doing?
• Are quality standards or specifications for your job, products or services changing?
• Is changing technology threatening your position?
• Do you have bad debt or cash-flow problems?
• Could any of your weaknesses seriously threaten your business?

Question 6

What is SWOT used for?

Answer 6

• SWOT can be used as a tool to formulate a strategy of growth and attack to use the business’s strengths to maximise opportunities in the market.
• SWOT can be used as a tool to compete and defend, using the strengths to minimise the market threats.
• SWOT can be used as a tool to improve and attack new markets or produce new products.
• SWOT can be used as a tool to identify when to change and retreat.