3.1.3 SWOT analysis

Question 1

what is swot analysis

Answer 1

a strategy business adopt to determine the strengths, weaknesses, oppurtunities and threats a business faces. it sets out to find out what a business does well and what it does badly and what issues iot must address in the future.

Question 1

top down approach

Answer 1

the use of external management consultants to identify strengths and weaknesses and is passed down

Question 2

pros and cons of top down approach

Answer 2

pros=
-external people will not have attachment to business so will be honest and see business in a new light

cons=
-manages may fail to share all relevant info

Question 3

why is swot analysis helpful

Answer 3

help senior managers to understand the current business position so that appropriate strategic decisions may be made

strengths can be harnesses
weaknesses can be eliminated
oppourtunities can be seized
threats can be mitigated

Question 4

consultative approach

Answer 4

the boss of the business conducts an analysis by going around and asking people

Question 5

pros of consultative approach

Answer 5

greater insight from more contributors
boss will gain first hand understanding

Question 6

cons of consultative approach

Answer 6

staff may be scared to point out problems

Question 7

internal considerations; strengths and weaknesses

Answer 7

a business will focus on key performance indicators to identify the strengths and weaknesses, these include
-unit cost
-market share
-brand recognition
-staff turnover
-capacity utilisation

a business will compare these indicators to rivals to determine clear strengths and weaknesses

Question 8

external considerations; opportunities and threats

Answer 8

a business needs to consider the threats and opportunities brought about by the environment around them.
-demography=changes to population can be relevant
-new laws/regulations=new laws can open up opportunities but also impact business costs
-technological factors=new technology can bring about both opportunity and threats
-competition=competition make move customer base away but also if a rival makes a poor decision it can open up opportunities
-commodity prices=rise in commoditys such as oil or metal will lead to threats for some businesses but opportunity’s for others.

Question 9

evaluation of swot analysis

Answer 9

can be very helpful in identifying internal and external factors which influence a business, and how this can affect their position in the market, however is is possible that some threats or weaknesses may be overlooked when conducting the analysis, this can lead to inaccurate info and business failure.