unit 7 chapter 25 : SWOT ANALYSIS Flashcards
SWOT analysis is
method of strategic analsysis ehich considers internal and external enviro of a bs
SWOTacronmy
strength
weakness
Opportunities
Threats
What do strength and weakness look at
internal position of bs @present time
giv example of 4 strength s
highly skilled +loyal staff
hihg level of cash
strong brand name
good distribution network
give 4 examples of weaknesses
large amoutns of lt borrowing
under utilised capacity
low net profit margin
lack of new products under development
what do opportunities and threats refer to and look to
external factors
looks to teh future
opportunities offer what types of chances for bs
positive chances for bs
threats are factors which may be
damaging
give example of 3 opps in future a bs may benefit from
growth in a major market
alliance w competitor to develop new technology
rising income levels among target consumer groups
give example of three future threats for a bs
being taken over by larger competitor
change in consumer tastes leading to signficiant fall in demand
new laws increasing businesses COP
After managers identify SWOT what do they do
rank in order of significance such as
whats most significant threat
knowing bs weakness and threats means can identify …
actions bs needs to take immediatley as well as in future to protect itself
once SWOTs been done managers should have clearer
view on what bs is good at , its weaknesses and what bs could be doing and against what it should protect itself
from knowing swot managers can develop strtaegy/range of strategies that seek to do waht 3 things
build on strengths to exploit opportunities
reduce/eliminate their weaknesses
protect bs against threats
SWOT analysis is not a
one off excersise
why is swot analysis not a one off excersise
bs i susbject to constant change in its internal and external enviro
as bs is subjbect to constant change in internal and external enviro it should be
and startegies should be
constantly
monitored
analysed
strategies should be adjusted accordingly `
BENEFITS OF SWOT ANALYSIS r
low cost , straightforward tech that can be used by managers in all types of bs & may be very suitable to assist maangers of samll bs in devising a strategy
encourages managment teams to develop plans that are logical in the context of bs current position whilst activley promo a forward looking approach which shoudl be central element of bs planning
can be comboed effectivley with other managment techniques such as PESTC analysis to develop a bs strategy
SWOT analysis and esp the threat part of analysis can help managers recognise and assess risk which is an important part of making strategic decisiosn
LIMITATIONS OF SWOT ANALYSIS
only covers issues that can be clasified as SWOT , can be difficult to address uncertain/two sided factors e.g factors that can be SW or both
only as good as data its based on - if poor ,analysis unlikrly ot be useful. + data its based on can become outdated quickly e.g profit levels and mkt position could be quite different a year later
descision on bs startegy should be based on reliable relevant and comparable data. But SWOT analysus can be subjective depending on the opinions and positions of those collecting and analysing the data
can provide lot of info but unlikley to offer any solutions so results require further analysis by managers. Any benefit from the analysis will depend on the quality of the interpretation/data - if poor analysis liekly to be of little valye
analysis offers no assitance to managers in judging relative importance of SWOT in contributing to development of strategy . As consequence managers may undermine importance of some of the four elements
