3.1.3 SWOT analysis

Question 1

Define SWOT analysis and what does it stand for?

Answer 1

SWOT analysis is a four factor model that details the Strengths, weaknesses, opportunities and threats facing a business.

Question 2

What type of factors are S+W?

Answer 2

Strengths and weaknesses are internal factors that the business can influence, examples of these are people (employees) or marketing.

Question 3

What type of factors are O+T?

Answer 3

External factors that that the business cannot control, examples of these are PESTLE and competitive behaviour.

Question 4

How is SWOT analysis useful?

Answer 4

It can help managers to make strategic decisions, it considers the businesses individual circumstances and is done in a factual and objective way.

Question 5

What are the advantages of SWOT analysis?

Answer 5

• can easily be redone if there are a change in circumstances
• Low cost

Question 6

What are the limitations of SWOT analysis?

Answer 6

• Only looks at 4 areas
• does not offer clear solutions
• Subjective as some opportunities may carry potential threats