3.1.3 SWOT Analysis Flashcards
What is a internal audit
Is an analysis of the business itself and how it operates. It attempts to identify the strengths and weaknesses of its operations.
What is an external audit
Is an analysis of the environment in which the business operates and over which it has little or no control. This audit may address three key areas, technology, legal and environmental issues relevant to the business.
What areas may a internal audit cover?
- Products and their costs, quality and development
- Finance, including profit, assets, and cash flow
- Production, including capacity, quality, efficiency and stock management
What areas may a external audit cover?
- The size and growth potential of the market
- The characteristics of the customers in the market
-The products on offer
What is a PESTLE analysis? (what it stands for?)
P - Political
E - economic
S - social
T - technological
L - Legal
E - environmental
What does a SWOT analysis stand for?
S - Strength
W - weakness
O - opportunities
T - threats
What is strength in SWOT
These are the positive aspects of a business that may be identified from the internal audit. Strengths are watch the business is good at they all want to help make the business a success.
Examples :
- a respected , intelligent , inspirational leader
- a highly motivated and loyal workforce
- a loyal customer base
What is weakness in SWOT
These are the negative aspects of a business that may be identified from the internal audit. Weaknesses are what the business and axle autos poorly for example in relation to its competitors.
Example:
-A poorly motivated workforce with a high staff turnover
-An organisational structure that has too many layers of management
- Hey, poorly presented and out of date website
What is opportunities in SWOT
External audit should show up what opportunities are available to the business. These are the options or openings that the business might be able to exploit resulting in improving such as higher revenues or lower costs.
Examples:
- A new overseas market opening up following a political change
-Low interest rates which provide cheap finance for investments
- A fall in the exchange rate, which will make exports cheaper
What is Threats in SWOT
The external audit should show up what threats face the business. Threats of possible hazards that have potential to damage the performance of the business.
Example :
-A new entrant in the market
- A rival appointing, a new and highly successful CEO
-A looming recession
Why would you use a SWOT analysis
-Make a decision about which new products to launch
-Have a design, a new marketing strategy
-Help prepare for a completely new business venture
What is a SWOT Analysis
An analysis of the internal strengths and weaknesses of the business and the trade opportunities and threats presented by its external environment
What is a trade association
An organisation whose members are all involved in the same industry or trade. The organisation pursues the interests of these businesses.
Advantages of using a SWOT analysis?
1.Simple and Easy to Use: SWOT analysis is a simple and easy-to-use tool that can be used by organizations of all sizes and industries. It provides a clear and concise overview of an organization’s strengths, weaknesses, opportunities, and threats.
2.Cost-Effective: Conducting a SWOT analysis is cost-effective, as it does not require any special tools or expertise. It can be performed by a team of employees or managers within the organization, without the need for external consultants or experts.
3.Strategic Planning: SWOT analysis provides a framework for strategic planning by identifying internal and external factors that can impact an organization’s performance. It can help organizations develop specific strategies and tactics to capitalize on their strengths, mitigate their weaknesses, leverage opportunities, and mitigate threats.
Disadvantages of using a SWOT analysis?
1.Subjective Analysis: SWOT analysis can be subjective, as it relies on the opinions and perceptions of the individuals conducting the analysis. This can lead to biases and inaccuracies in the analysis.
2.Limited Scope: SWOT analysis only focuses on internal and external factors that are relevant to an organization’s performance. It may not consider other factors such as market trends, regulatory changes, or technological advancements.
3.Lack of Actionable Insights: SWOT analysis may not provide specific and actionable insights that can be used to develop strategies and tactics. It may only provide a broad overview of an organization’s strengths, weaknesses, opportunities, and threats, which may not be sufficient to guide decision-making.
