SWOT Analysis

Question 1

SWOT Analysis is…

Answer 1

is a tool used by management to help with decision making. SWOT Analysis considers all internal factors (strengths and weaknesses) and external factors (opportunities and threats)

Question 2

Purpose of SWOT Analysis is…x5

Answer 2

Helps with planning, deciding the way forward for the business and looking at strategies that could be used
Can be used in any decision making, however most often used when making strategic and tactical decisions
Proactive decision making as part of a continuous process of how firm is doing now and what it should be doing in the future
Identify opportunities early which can give competitive edge
Turn threats into opportunities and weaknesses into strengths

Question 3

Features of SWOT Analysis are…x2

Answer 3

Considered from firm point of view and the point of view of the people they deal with
Crucial to be honest and realistic

Question 4

Advantages of SWOT Analysis are…x6

Answer 4

Cost effective as no training or technical skill is required. This means no expert consultant is needed, only prior knowledge of staff which reduces expenses
Gain insight into market giving firm better understanding of competition, this gives firms the opportunity to formulate a plan to strengthen competitive position in market
Provides firm clear view of strengths which allows them to build on them and meet firm objectives
Highlights weaknesses which gives them a chance to reverse and reduce them. This reduces damage weaknesses cause
Showcases possible opportunities that lie ahead which gives firm chance to draft strategic growth plans for the future.
Helps identify threats and take necessary measures to deal with them. Firms can establish growth plans to eliminate possible threats.

Question 5

Disadvantages of SWOT Analysis are…x4

Answer 5

Can be outdated quickly which wastes time and effort of employees
Lacks detailed structure which means key elements may be missed.
To be effective, it must be repeated on a regular basis which is time consuming and difficult. Even harder to collect quality internal data in complex structures with parent companies
Oversimplify the amount of data used for decisions which means it’s easy to use insufficient amounts, making decisions made less effective.