Explain one benefit Sports Direct could gain from conducting a SWOT analysis.
- Edexcel - A-Level Business - Question 2 - 2022 - Paper 2
Question 2
Explain one benefit Sports Direct could gain from conducting a SWOT analysis.
Worked Solution & Example Answer:Explain one benefit Sports Direct could gain from conducting a SWOT analysis.
- Edexcel - A-Level Business - Question 2 - 2022 - Paper 2
Step 1
Knowledge of SWOT Analysis
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Answer
SWOT analysis helps Sports Direct to identify its internal strengths, weaknesses, as well as external opportunities and threats. This analysis can provide a structured approach to understanding the company's competitive position.
Step 2
Internal Strength
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Answer
Sports Direct generated sales revenue of £3.359.5 million in 2018, indicating a strong financial position.
Step 3
Internal Weakness
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Answer
Sports Direct faced an internal weakness by losing £85 million as a result of its investment in Debenhams.
Step 4
External Opportunity
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Answer
The acquisition of House of Fraser presents an external opportunity, as it allows Sports Direct to transform it into the 'Harrods of the High Street'.
Step 5
External Threat
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Answer
A significant external threat is the growth of online sales, occurring at a rate 10 times that of physical store sales, which impacts traditional retail businesses.
Step 6
Analysis of SWOT Importance
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Answer
Conducting a SWOT analysis is key in planning Sports Direct's strategy for leveraging its strengths to exploit opportunities, such as positioning itself as a leader in the sports retail sector.
