DP BM - SWOT analysis

BMT 1

SWOT analysis

situational tool used to asses the internal strengths + weaknesses & external threats + opportunities that a business faces

The four acronyms of SWOT and their definition

• Strength - favorable internal factors

• Weakness - unfavorable internal factors

• Opportunity - external possibilities (prospects) for future development

• Threats - external factors that hinder the prospects of an org.

5 possible uses of SWOT

• competitor analysis

• opportunity assessment

• risk assessment

• reviewing corporate strategy

• strategic planning

What are the four strategic positions that a business has after completing a SWOT analysis?

• offensive (strength + opportunity)

• defensive (strength + threat)

• reorientation (weakness + opportunity)

• survival (weakness + threat)

3 Advantages of SWOT

• quick and simple

• encourages proactive thinking (rather than intuition)

• helps determine org.s position in a market

4 Limitations of SWOT

• overly simplistic

• lacks quantitative assessment (insufficient data→ poor decisions)

• potential for bias (from managers)

• static assesment (but the business world is always changing)