SWOT Analysis

SWOT Analysis

1. An analysis of the internal strengths and weaknesses of the business...

   • and the opportunities and threats presented by its external environment
     • External audit
       • An analysis of the environment in which the business operates
         • And over which they have little control
           • It should include
             • The size and growth potential of the market
             • The characteristics of the customers in the market
             • The products on offer
             • How products are distributed
               • And promoted
   • Internal Audits
     • An analysis of the business itself and how it operates
       • It attempts to identify the strengths and weaknesses of its operations
         • It may cover areas such as...
           • Products and their costs, quality and development
           • Finance, including profits and cash flow
           • Production, including capacity and efficiency

2. Strengths

   • Positive aspects of the business
     • That may be identified from an internal audit
     • Examples may include
       • An inspiring leader with vision
       • A highly motivated loyal workforce
       • A product with a USP
       • A loyal customer base
       • An innovative marketing department

3. Weaknesses

   • Negative aspects of the business
     • That may be identified from an internal audit
     • The characteristics that undermine the performance of the business
       • Or may even be preventing the business from growing
       • Examples may include
         • A poorly motivated workforce
           • With high staff turnover
         • An organisational structure that has too many layers of management
         • A product range that is getting out of date
         • A poor cash flow and growing debt
         • Outdated tools and machinery

4. Opportunities

   • Options or openings that the business may be able to exploit
     • Should have been found with an external audit
     • Resulting in improvements such as higher revenues or lower costs
       • Examples may include
         • A new overseas market opening up
           • Following a political change
         • A fall in the cost of an essential raw material
           • Such as oil
         • The collapse of a major rival

5. Threats

   • Possible hazards or perils
     • That have the potential to damage the performance of the business
       • Examples may include
         • A new entrant to the market
         • A rival appointing a new an highly successful CEO
         • A looming recession
         • A change in social attitudes
           • To the businesses key product
     • Should have been found in an external audit