Understanding SWOT Analysis
- SWOT Analysis is an analytical tool used by businesses to identify
- Internal strengths and weaknesses
- External opportunities and threats
An example of a SWOT Analysis for a small cafe business
- Once a SWOT Analysis has been completed by a business, appropriate decisions can be made to improve performance
- Strengths should be harnessed
- Weaknesses should be eliminated
- Opportunities should be seized
- Threats should be mitigated
- Effective SWOT analysis can help senior managers to understand the current business position so that appropriate strategic decisions may be made
Examples of Factors Considered in a SWOT Analysis
STRENGTHS
For example:
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WEAKNESSES
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Exam Tip
A SWOT Analysis will vary significantly for businesses of different sizes, with different objectives and operating in different sectors.
For example, a micro start-up business will face vastly different SWOT factors as compared with a large multinational. Having conducted a SWOT analysis, you should be able to make strategic and/or tactical decisions to achieve corporate objectives (see sub-topic 3.1.2)