3.1.3: SWOT analysis

gathering information to help develop a strategy

• internal audit: analysis of the business and how it operates

  • identifies strengths and weaknesses of its operations

  • large business - audit conducted by outside consultants

    • helps produce independent-minded analysis

• external audit: analysis of the environment in which the business operations

  • has little or no control over it

  • deals with 3 key areas: market, competition and other issues relevant to the business

  • analyses nature and strength of competitors

what is SWOT analysis?

• looking at

  • strengths - positive aspects identified from an internal audit

  • weaknesses - negative aspects identified from an internal audit

  • external opportunities - opportunities available to the business

    • shown by external audit

    • leads to improvements to exploit

  • threats - shows possible dangers that can damage performance

• analytical tool to help managers with complex decisions

• used before drawing up a strategic plan

• summarises and builds upon internal and external audit

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