3.1.3 SWOT Analysis

• Strength

  • What the business is good at
• Weakness

  What the business does poorly
• Opportunities

  • Options a business may exploit to achieve greater succes.
• Threats

  • Hazards that cause potential failure to business.
• Example of strengths

  • Qualities that separate business from rivals.
  • Internal resources - skilled staff or particular innovation.
  • Possession of assets- capital, patents or intellectual property.
  • loyal customer base.
  • Effective leadership.
• Example of weaknesses

  • Ways in which the business lags behind competitors.
  • Resource or capital limitations including labour and finance.
  • Lack of a competitive advantage.
  • Lack of a unique selling proposition (USP).
  • Poor online presence.
• Example of opportunities

  • Developing markets for specific products become apparent
  • Few competitors exist
  • A changing legal or political environment positively impacts on business processes and decisions
  • Social or technological developments create an emerging need for the businesses products
  • Economic indicators becoming more favourable
  • A potential for positive media coverage of the business
• Example of threats

  • New or emerging competitors are gaining market share
  • A changing legal or political environment negatively impacting on business processes and decisions
  • Social or technological developments threaten obsolescence of products
  • Economic indicators becoming less favourable
  • Negative press coverage
  • Changing customer attitudes towards the business
• • Strengths should be harnessed
  • Weaknesses should be eliminated
  • Opportunities should be seized
  • Threats should be mitigated
• Effective SWOT analysis - help senior managers to understand current business position so appropriate strategic decisions may be made.
• • SWOT analysis is an analytical tool used by businesses to identify
  • Internal strengths and weaknesses
  • External opportunities and threats