3.1.3 SWOT analysis Flashcards
What is a SWOT analysis?
A method for analysing a business, its resources and its environment.
What do SWOT analysis aim to do?
- the distinctive capabilities of the business
- what competitors do better
- whether it is making the most opportunities
- how businesses should respond to PESTLE factors
What do SWOT analyses look at?
It focuses on the internal strengths and weaknesses of a business (compared with competitors) and the key external opportunities and threats for the business.
What are the 4 categories in a SWOT analysis?
Internal: Strengths & Weakness
External: Opportunities & Threats
What do businesses do once they have analysed their strengths and weaknesses?
Match the strengths with opportunities.
Convert weaknesses into strengths.
What are some common strengths within an organisation?
- profits
- productivity
- capacity utilisation
- brand
- liquidity
- PR
- ethics
- product portfolio
- quality
- customer loyalty
- USP
- market share
- employee retention
- efficiency
What are some common weaknesses within an organisation?
- diseconomies of scale
- costs
- ethical stance
- low motivation
- innovation
- structure
What are some common opportunities that face an organisation?
- overseas sales/foreign markets
- trends
- economic booms
- diversification
- new markets
- innovation
What are some common threats that face an organisation?
- control
- legislation
- PESTLE
- merger/takeover
What are benefits of a SWOT analysis?
- reduces risk
- aid planning due to internal factors
- assess effectiveness of opportunities
What are drawbacks of SWOT analysis?
- not guaranteed success
- flawed as could be false
- data hard to collect
