BMT - SWOT analysis

What is SWOT analysis?

It is a business tool used to identify a businesses strengths and weaknesses, opportunities and threats

Which parts of SWOT analysis are internal?

Strengths and weaknesses

Why are strengths and weaknesses internal?

Because they occur within a business and the business can control these factors or have influence over them

Which factors of SWOT analysis are external?

Opportunities and threats

Why are opportunities and threats external?

Because they occur outside of a business and the business therefore doesn’t have any influence over these factors

What are strengths of a business? (with example)

The areas which the business excels in. Once the strengths are identified, a business can make these even stronger e.g., the strength of Netflix is that it has good brand-recognition and a global reach

What are weaknesses of a business? (with example)

The areas of the business which need improvement. Once these are identified, the business can aim to improve these e.g. Netflix’s weaknesses are that they have a lack of live content and that they have high production costs of movies

What are opportunities of a business? (with example)

they are options which a business may choose to become more successful, and which they can take advantage of (exploit) e.g., Netflix’s opportunities are that more technological advancements are being made, and that during covid, many more went online

What are threats of a business? (with example)

they are factors which could worsen the current positioning of a business. When a business has identified these, they can prepare for or elimiate these e.g., Netflix’s threats are that they have many competitors such as Disney+

What is the purpose of SWOT analysis?

Businesses can combine internal and external environments, assessing these, and raise awareness

What are the four basic strategies that can be identified after performing a SWOT analysis?

Offensive strategies

Defensive strategies

Reorientation strategies

Survival strategies

What is an offensive strategy?

If the firms strengths meet an opportunity, the business can gain a maximum benefit, as they may have a USP

What is a USP?

It is a unique selling point, which is good for businesses because unique items grab consumers attention and drives demand. It decreases competition because it is new and revolutionary.

What is a defensive strategy?

It is when a firms strengths meet external threats, which requires the firm to defend itself and the business may have to pay close attention to its competition so that it won’t lose market share

What is a reorientation strategy?

When there is an opportunity in an external environment but the business has a weakness which prevents it from taking the opportunity, and therefore needs to reorient and change

What is a survival strategy?

When a business has a weakness where there is an external threat, so it’s main aim is to survive and minimize the negative effects of this situation

What are the advantages of SWOT analysis?

It is quick and simple to construct

It reduces risks and allows a business to identify its weaknesses and improve on them

It determines the market position

What are the disadvantages of SWOT analysis?

Decision makers may be unwilling to face weaknesses and threats