3.1.3 SWOT analysis Flashcards
SWOT
Useful for analysing a business, its resources and its environment
Internal - Strengths Weaknesses
External - Opportunities Threats
Can help discover
What business does better than competition
What competitors do better
Whether business is making most of opportunities available
How a business should respond to changes in its external environment
SWOT
Assessing, evidence, evaluating SW
Assessing - competitive advantage
Evidence - marketshare, profitability
Evaluating - Is judgement reliable
Strengths are things a business is good at - a clear advantage over rivals, what will help a business achieve its objectives
- build up competitive advantage
- should be protected and built upon
Examples - high marketshare, high quality, brand reputation etc
Weaknesses are a source of competitive disadvantage, what a business lacks or does poorly, may constrain business in achieving its objectives
- areas for improvement - how can they be overcome
SWOT
Assessing, evidence, evaluating OT
Assessing OT
How to take advantage of opportunities
How to protect against threats
Rate of risk management and contingency planning
Opportunity = positive potential for business to achieve its objectives
Potential opportunities
Technological innovation, market growth, demographic change, new demand
Threats = external development that may hinder businesses from achieving objectives
Potential threats
New entrants, change in tastes, demographic change, higher input prices, new substitutes, competitive price pressure
Value of SWOT
Should be more than a list - its an analytical technique to support strategic decisions
Match - Strengths with Opportunities
Convert - Weaknesses into strengths
E.g - weakness = poor quality - convert - invest in quality assurance
Evaluating SWOT
Ads+ Disads
Advantages Easy to understand Logical structure Focuses on strategic issues Encourages analysis of external environment
Disadvantages
Often lacks focus
Quickly becomes out of date
