Theme 3 Topic 3 - SWOT Analysis and External Influences Flashcards
Define Internal Audit
Analysis of the business itself and how it operates
Define External Audit
Analysis of the external environment a business is in
Define SWOT Analysis
The analysis of internal strengths and weaknesses of a business and the opportunities and threats presented by the external market
Define Strengths
Positive aspects of the business focused on what they are good at and what will make the business a success
Define Weaknesses
Negative aspects of the business undermining their performance
Define Opportunities
Any feature of the external environment which creates positive potential for the business which they might be able to exploit
Define Threats
Any potential obstacles to the businesses success in the external environment
What does PESTLE stand for?
Political, Economic, Social, Technological, Legal, Environmental
What are two advantages of competition?
More choice for customers, Businesses charge competitive prices
What are two disadvantages of competition?
Businesses have to innovate/have a USP to stand out, Need a lot of finance to set up
Define Collusion
Businesses get together to illegally fix the price and agree not to compete
What does the Competition and Markets Authority (CMA) try to do?
Prevent unfair competition
Define Monopoly
A market dominated by a single firm
What are two advantages of a monopoly?
Don’t have to look for the best business/deal, Can be more efficient
What are two disadvantages of a monopoly?
Difficult for other businesses to enter the market, Quality could be poor as the business has no incentive to innovate
