Study Notes

SWOT Analysis

Level:
GCSE, AS, A-Level
Board:
AQA, Edexcel, OCR, IB

Last updated 22 Mar 2021

SWOT analysis is a method for analysing a business, its resources and its environment. It focuses on the internal strengths and weaknesses of a business (compared with competitors) and the key external opportunities and threats for the business.

SWOT is commonly used as part of strategic planning and looks at:

  • Internal strengths
  • Internal weaknesses
  • Opportunities in the external environment
  • Threats in the external environment

SWOT analysis aims to discover:

  • What the business does better than the competition
  • What competitors do better
  • Whether it is making the most of the opportunities available
  • How a business should respond to changes in its external environment

The result of the analysis is a matrix of positive and negative factors for management to address:

The key point to remember about SWOT is that:

Strengths and weaknesses

  • Are internal to the business
  • Relate to the present situation

Opportunities and threats

  • Are external to the business
  • Relate to changes in the environment which will impact the business

Using SWOT analysis

There is no point producing a SWOT analysis unless it is actioned! SWOT analysis should be more than a list - it is an analytical technique to support strategic decisions

Strategy should be devised around strengths and opportunities

The key words are match and convert:

A key challenge for any business is to convert weaknesses into strengths. For example:

Don’t forget that for every perceived threat, the same change presents an opportunity for business.

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