Chapter 8 Business Analysis (Task 5) Flashcards
SWOT
Strengths (Internal)
Weakness (Internal)
Opportunities (External)
Threats (External)
Opportunities
External chances to improve performance
for ex. introduction of a new product or more effective production process
Threats
External elements in the environment that could cause trouble for the business or project
for example new legislation which could affect the manufacturing process in the form of aggressive competition or takeover
exchange rates, inflation, interest rates
PESTLE
Political - changes in government policy, taxation, government grants, imports and exports, public spending (NOT LAW)
Economic - interest rates, exchange rates, disposable income, inflation
Social - demographics, health-conscious of population, changing fashion/trends, unemployment
Technological - changes in technology, new products, processes and working methods
Legal- employment law, health and safety law, competition law, data protection law
(LAW)
Environmental - climate change or weather, natural disasters, sustainability and Corporate social responsibilities issues
Def of SWOT
SWOT analysis is a strategic planning method used to evaluate a project’s:
Strengths
Weaknesses
Opportunities
Threats
It requires an understanding of the business systems.
You must also identify internal and external factors that are favourable and unfavourable to achieve the objective.
Def of PESTLE
PESTLE analysis is concerned with the “environmental” or “outside would” influences.
The acronym stands for:
Political
Economic
Social
Technological
Legal
Environmental
Identifying PESTLE influence can be very useful to summarise the external environment in which a business operates.
To be effective, a PESTLE analysis should be followed up by considerations of how the business can respond to these influences.
For the exam, we are interested in how PESTLE can be applied to an accounting system.
