SWOT Analysis (Edexcel A Level Business): Revision Note

Understanding SWOT analysis

• SWOT analysis is an analytical tool used by businesses to identify:

  • Internal strengths and weaknesses

  • External opportunities and threats

A SWOT analysis for a café business

• Once a SWOT analysis has been completed by a business, decisions can be made to improve performance:

  • Strengths should be built on

  • Weaknesses should be eliminated

  • Opportunities should be seized

  • Threats should be mitigated

• An effective SWOT analysis can help senior managers understand the current business position so that appropriate strategic decisions may be made

Factors considered in a SWOT analysis

Strengths

• What the business is good at

  • Qualities that separate the business from its rivals

  • Internal resources, such as skilled staff or a particular innovation

  • Possession of assets, such as capital, patents or intellectual property

  • A loyal customer base

  • Effective leadership

Weaknesses

• What the business does poorly

  • 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 point

  • Poor online presence

Opportunities

• Options a business may exploit to enjoy further success

  • Developing markets for specific products becoming apparent

  • Few competitors existing

  • A changing legal or political environment positively impacting the business's processes and decisions

  • Social or technological developments creating an emerging need for the business's products

  • Economic indicators becoming more favourable

  • The potential for positive media coverage

Threats

• Hazards that have the potential to damage business performance

  • New or emerging competitors gaining market share

  • A changing legal or political environment negatively impacting the business's processes and decisions

  • Social or technological developments threatening the obsolescence of products

  • Economic indicators becoming less favourable

  • Negative press coverage

  • Changing customer attitudes towards the business