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What is a SWOT analysis?
SWOT analysis is a strategic tool that a business can use to analyse its
current position and the external factors that might affect it. SWOT stands
for strengths, weaknesses, opportunities and threats.
Hodder & Stoughton © 2017
Strengths
These are areas where you do well, or advantages for your organisation.
A key starting point for a SWOT is the strengths of the business. These are
internal factors that the business has identified and could include examples
such as:
patents or copyright
strong sales growth
high market share
low levels of debt
USP
Hodder & Stoughton © 2017
Weaknesses
These are areas to improve. The weaknesses will also be internal and
should focus on areas that are currently a problem for the business.
Examples of weaknesses may include:
poor cash flow
quality issues
low stock levels
poor reputation
Hodder & Stoughton © 2017
Opportunities
These are external factors that may contribute to your organisation and can
build up your strengths.
These relate to external factors that are outside the direct control of the
business. They are positive factors that could happen some time in the
future.
For example, a change to legislation means that the business could
operate for more hours and potentially increase revenues.
Hodder & Stoughton © 2017
Threats
These are potential problems/risks caused by external factors that your
organisation may face.
These relate to external factors that are outside the direct control of the
business. They are often in the future and are hypothetical risks that could
create problems.
For example, a new competitor enters the market and undercuts your
prices.
Hodder & Stoughton © 2017
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