SWOT Analysis Flashcards
What does SWOT stand for?
Strengths
Weaknesses
Opportunities
Threats
What are strengths of an organisation?
Availability of finance.
Well known brands or products.
Goods/services that make the most profits.
What are weaknesses of an organisation?
Lack of finance.
Lack of technology.
Poor customer service reputation.
Faulty products.
What are opportunities of an organisation?
A competitor going bust, so the business could take on its customers.
A boom period in the economy that the business could exploit.
Customer tastes in fashions falling in line with an organisation’s specialism.
What are threats to an organisation?
Competitors’ actions, such as cheaper prices or better quality products.
A downturn in the economy, such as recession.
Customer tastes and fashions changing, away from those the business specialises in.
What are advantages of SWOT analysis?
Identifies strengths and allows a business to build upon them.
Identifies weaknesses and allows them to be addressed.
Identifies opportunities and allows them to be exploited.
Identifies threats and allows them to be turned into opportunities e.g. advancing technology, not allowing it to leave the business behind.
Time is taken to analyse the business’s current position so no rash decisions are made.
What are disadvantages of SWOT analysis?
A SWOT analysis is very time consuming, which can slow down decision making.
A SWOT analysis is a very structured process which can stifle creativity and gut reactions from managers.
A SWOT analysis can generate many ideas; however, it doesn’t help pick the correct one.
A SWOT analysis produces a result that reflects the opinions of those who carry it out which could lead to bias.
A SWOT analysis considers information that is available at a particular moment and may become outdates quickly.
Explain the purpose of SWOT analysis?
An advantage of SWOT is that it allows an organisation to identify its internal strengths. The effect of this is that the business will have strong knowledge of where it is performing well and can build upon these existing strengths.
Also it avoids rash decisions being made. This means that businesses will be making informed decisions reducing the risk of negative impacts or failure.
Finally SWOT allows businesses to identify possible threats to the business. The effect of this is that the business can be more prepared for certain scenarios, putting them in a stronger scenario.
