3.1.3 - SWOT analysis

what is a SWOT analysis

A SWOT analysis is a strategic tool used to evaluate a business’s current position and future direction

strenghts

These are internal factors that give the business an advantage. They’re within the firm’s control — for example, skilled staff, strong brand reputation, or efficient operations.

• branding

• customer loyalty

• technological advances

• skilled workers 

weakness

• Weaknesses: These are also internal areas where the business may struggle or require improvement. Examples include poor cash flow, outdated technology, or low employee morale.

opportunies  

• Opportunities: These are external factors that could benefit the business. They lie outside the firm’s control but can be exploited — such as emerging markets, new technologies, or reduced competition.

threats  

• External challenges that could harm the business. These include economic recessions, new competitors entering the market, or changes in regulation.

strenghts of a swot analysis

• Provide a clear overview of key issues facing the business

• Help identify external threats and guide response strategies

• Reinforce core strengths that can be leveraged for advantage

• Highlight areas for improvement that may otherwise be overlooke

drawbacks of a swot analysis

• Can be subjective and biased depending on the author

• Lack detailed quantitative analysis to support conclusions

• Only offer a snapshot of the current situation, not long-term trends

• Identify issues but don’t prioritise which are most critical