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Internal and External Analysis - SWOT

Business Management and Enterprise (Year 12) - Management (U4)

Kanwal Singh

A SWOT analysis is a method of analysing a business’ competitive position and is composed of four main components:

  1. Strengths (internal)

    • These entail what a business does well and relates to the internal aspect of a firm:

      • A firm's expertise in certain fields, such as marketing, operations and more

      • Ability to produce innovative goods and services

      • Quality processes and procedures

      • Other unique selling points (USPs)

2. Weaknesses (internal)

  • These refer to what a business does poorly and revolves around the internal aspect of a business:

    • Lack of expertise in certain fields

    • Undifferentiated goods and services, when compared with competitors or past performance

    • Weak brand image

3. Opportunities (external)

  • These refer to external initiatives that can place a business in a stronger, more competitive position.

    • The market for a particular product may be growing

    • New technology in the space of that market

    • Increased investment

    • Competitors going out of business

4. Threats (external)

  • These are any external factors that can be harmful for a business:

    • Social perception and brand image, which is easily influenced through social media

    • Natural disasters and unexpected shocks, like pandemics

    • Legislation changes

    • Increased competition

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