3.1.3 SWOT Analysis

SWOT analysis

🔗 A way of analysing a business, looking at the business's strengths, weaknesses, opportunities and threats.

Key performance indicators (KPI)

🔗 Indicators used by businesses to determine the strengths and weaknesses in their SWOT analysis.

Strengths and Weaknesses

• Market share
• Sales revenue
• Capacity utilisation
• Customer satisfaction
• Profit margins
• Size of business
• Labour turnover
• Employee satisfaction

Opportunities and threats

• Demography – population change
• Laws and regulations
• Technological factors
• Commodity prices (E.G Oil)
• Economic factors (E.G Inflation, exchange rates, interest rates)

Why SWOT analysis is used

• Provides sufficient insight into the current and potential position of the business.
• Can be used to determine the corporate strategies for what is identified, indicating what should come next for the business

Methods of conducting SWOT analysis

• By the boss with a top-down process
• Huge responsibility already and SWOT analysis may be tedious and demotivating

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• Can be more consultative with boss going into each department to thoroughly identify SWOT
• Time-consuming

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• This can be done by an outside consultant to ensure fairness
• Expensive and the consults may not be knowledgeable about the business