Exam code: 7132
Which one of the following statements is true?
In a SWOT analysis:
a recession in the business’ main export market is a weakness.
an increase in labour productivity in the business is an opportunity.
an increase in the number of patents held by a business is a strength.
disappointing levels of innovation from research and development are a threat.
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Soundcheck plc
Soundcheck plc offers a streaming service enabling users in more than 160 countries to play a variety of content, such as music and podcasts, on electronic devices. The company initially offered its services free to consumers and earned revenue from advertisers. An additional, paid service was introduced in 2022. Paying subscribers benefit from better quality audio, no adverts, and playlists made by celebrities. Exclusive podcast content also provides paying subscribers with an enhanced experience which justifies a paid subscription model.
Since its launch in 2006, Soundcheck plc has grown to become the market leader. It now employs nearly 4000 staff globally. A stock market flotation has funded huge investment in building a high-quality technology platform, strong brand and a skilled workforce. However, Soundcheck plc has not regularly made an operating profit. Its costs have been rising significantly in recent years and in 2023 it lost £26 million as a global economic slowdown began.
In 2023, Soundcheck plc reached an agreement with trade unions about pay rates and ways of working. The agreement guaranteed starting salaries of at least £36 000 to many staff. This is significantly higher than the industry average. However, there is a global shortage of skilled software engineers and marketing staff so labour turnover rates remain high. In addition to competition for staff, new competitors are attracted to the growing market, including large rivals who are well established in other streaming markets. Other new entrants have also targeted the ‘free’ sector of the market. Some of these rivals have a competitive advantage because they own the rights to music or other content and so have lower costs than Soundcheck plc.
Soundcheck plc has set a corporate objective to achieve an annual profit in 2024.
Analyse the difficulties Soundcheck plc may experience when attempting to turn its 2023 loss into a profit in 2024.
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Read the case study in the Insert (opens in a new tab).
To what extent is Sanjay’s use of SWOT analysis likely to help his strategic planning?
Use information from Appendix C and the other information provided to justify your answer.
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Statement 1: ‘In a SWOT analysis, improvements in infrastructure are a strength for a business.’
Statement 2: ‘In a SWOT analysis, an increase in the minimum wage may be a threat to a business.’
Read Statements 1 and 2 and select the correct option from the following options.
Statement 1 is true. Statement 2 is true.
Statement 1 is true. Statement 2 is false.
Statement 1 is false. Statement 2 is true.
Statement 1 is false. Statement 2 is false.
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Statement 1: ‘In a SWOT analysis, high staff turnover is a threat.’
Statement 2: ‘In a SWOT analysis, excellent research and development facilities are an opportunity.’
Read statements 1 and 2 and select the correct option from the following options.
Statement 1 is true. Statement 2 is true.
Statement 1 is true. Statement 2 is false.
Statement 1 is false. Statement 2 is true.
Statement 1 is false. Statement 2 is false.
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Read the case study in the Insert.
DWS Ltd is considering making a major strategic change.
To what extent is a SWOT analysis valuable for any business deciding on its future strategy?
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In a SWOT analysis of a business, which one of the following statements is true?
An inefficient quality assurance system is a threat.
Lower unemployment leading to increased demand is a strength.
New legislation that requires a business to modify its products is a weakness.
The liquidation of a competitor is an opportunity.
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