3.1.3 - SWOT analysis Flashcards
Def SWOT analysis
Identifies a businesss strengths and weaknesses along with the opportunities and threats it faces
2 ways of conducting SWOT analysis
Top down approach
Consultative approach
Description top down approach
Using external management consultants working directly with the boss of the business
Benefits of top down approach
- dispassionate approach identifying strengths and especially weaknesses
- detachment from company culture may allow aspects of business to be seen in new light
Drawbacks of top down approach
Managers fail to share all necessary details to present their area of responsibility in a more favourable light
Description consultative approach
Boss travels around business engaging with those who understand each aspect best
Benefits of consultative approach
- greater insight from a wider range of contributors
- the chance for the boss to gain first hand understanding of the whole business
Drawbacks of consultative approach
Staff may be even less willing to point out problems because they feel this will reflect badly on leadership of person they’re talking to
Def KPI key performance indicator
Are quantifiable measures of aspects of a businesses performance that the business considers fo be the main determinants of its commercial success
Examples of KPIs
- like for like sales
- market share
- capacity utilisation
- unit costs
- brand recognition
- staff turnover
4 opportunity and threats to consider
Demography, new laws and regulation, technological factors and economic factors
Description of demography
Changes to population such as increasing aging population, space for retirement products and immigration creating new markets
Description of laws and regulations
Changes in laws and regulations opening up opportunities or making products obsolete overnight eg sugar tax
Description technological factors
Technological change can be opportunity seized for some and can destroy sales of outdated products in a matter of months for others
Description economic factors
Changes of variables such as: economic growth, inflation, unemployment, interest rates
