SWOT Analysis (Unit P5)
Unit 1 Exploring Business (International Specification). Resources for BTEC Level 3 Business Studies
SWOT is an acronym for strengths, weaknesses, opportunities and threats. The SWOT analysis is a tool used by business to;
Gain a better understanding of the business.
Gain a better understanding of the market in which the business operates.
Develop effective growth strategies.
Make plans to improve on weaknesses, e.g. staff training.
Develop contingency plans.
Strengths and Weaknesses
Strengths are internal factors that improve the position of a business and can give it a competitive advantage over rivals. Internal factors mean that the business has some control over them. Examples include;
Strong brand reputation
Unique selling point
Competitive advantage
Skilled workforce
Efficient production processes
High customer retention and loyalty
Weaknesses are internal factors that can prevent businesses from performing their best and can reduce their competitive advantage. Internal factors mean that the business has some control over them. Examples include;
Lack of qualified staff
Weak brand image
Poor quality products
High staff turnover
High levels of debt
Weak supply chain
Opportunities and Threats
Opportunities are factors in the external environment that can positively impact business activity if the business responds appropriately. External factors mean the business has no control over them happening but should respond. Examples include;
Market growth
New trends that can increase sales
Upcoming events
Changes in regulations
New technologies
Threats are factors in the external environment that can have a negative impact on business activity if the business responds appropriately. External factors mean that the business has no control over them happening but should respond. Examples include;
Increasing competition
Natural disasters
Downturn in the economy
Legislation changes
Supply chain issues
