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Business Studies: How to do a SWOT analysis

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Business Studies: How to do a SWOT analysis

Strengths: doing situational analyses. Weaknesses: writing subheads. Opportunities: getting people to read this. Threats: we took this gag too far.

When it comes to taking stock of a business – getting an overall view of where it sits – the SWOT method is a common and useful way of doing what we call a situational analysis. What’s it for? To help the business be more prepared to for the future and know where they stand compared to competitors and other organisations.

How does it work? Pretty much like this. You split your analysis into four sections, and fill them in with relevant points. (In case studies, you’ll generally be given this info to work from, but it’s good to know what’s what anyway [especially because you can use it for other stuff {like making tough decisions}].)

Strengths are internal positives

Here’s where you write down everything that’s great about the business. Try to get specific here – you want to be asking questions about what they’re good at, how skilled their people are, how popular their products are and things along those lines.

Weaknesses are internal negatives

You may have guessed – this is where you make note of everything bad about a business. The important thing to remember here is that these downsides are elements that the owners have some control over. For example, if a business is hard to get to, that’s a weakness they can fix by moving to somewhere more convenient.

Opportunities are external positives

Here’s where you want to look at the paths a business can take to grow and succeed. The obvious questions to ask are – who else can they sell their product to? Is there room to grow within their current industry? Is it possible to get the money to expand to another location? These are external factors that the business won’t have as much contol over.

Threats are external negatives

In the same way, threats are downsides that the business can’t control. For example, a new business opening up next door, selling the same product cheaper, is a threat. The government changing the laws around whatever they’re selling is another example – think about the advertising laws for cigarettes or the potential ban on live export.

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