SWOT Analysis

• What is a SWOT analysis?

  Helps a business assess its competitive strength and the nature of its external environment
• What does SWOT stand for?

  • Strengths
  • Weaknesses
  • Opportunities
  • Threats
• What in a SWOT analysis is internal to a business?

  Strengths and Weaknesses
• What in a SWOT analysis is external to a business?

  Opportunities and Threats
• A SWOT analysis will change over time as conditions change and so the analysis needs to be undertaken regularly
• SWOT analysis does not guarantee that a strategy is successful
• What is an example of when a SWOT analysis might not guarantee success?

  Conditions may change faster than the business has realised, the wrong strategy may be selected or it may be poorly implemented
• What are examples of possible strengths for a business?

  • Good distribution network
  • Good cash flow position
  • Well trained staff
• What are examples of possible weaknesses for a business?

  • Over-empahsis on the UK market
  • Weakened brand reputation due to several product recalls
• In a SWOT analysis the business needs to look at how sustainable the strengths are and how weaknesses can be overcome
• What are possible examples of opportunities to a business?

  • New markets opening up
  • Economic recovery
• What are possible examples of threats to a business?

  • Increased competition
  • Rising raw materials costs
  • Lower labour supply
• What acronym can you use when assessing the opportunities and threats of a business?

  PESTLE
• What does PESTLE stand for?

  • Political
  • Economic
  • Social
  • Technological
  • Legal
  • Environmental
• What is PESTLE used for?

  Assessing the opportunities and threats of a business
• What are the advantages of using a SWOT analysis?

  • Easy and logical structure
  • Focuses on the business' strategic issues
  • Encourages analysis of the external environment
• What are the disadvantages of using a SWOT analysis?

  • Risk of capturing too much data which would lead to a lack of focus
  • Can quickly become out-of-date
• When is a SWOT analysis used?

  Strategic planning process
• A business using a SWOT analysis may build on its strengths and focus on the opportunities or try to protect itself against threats