Unit 6: Business Management Toolkit — BMT 1 SWOT Analysis
Introduction to SWOT Analysis
SWOT Analysis is a strategic planning tool used to identify and evaluate the Strengths, Weaknesses, Opportunities, and Threats related to a business, project, or decision. It organizes internal and external factors to support better decision-making and long-term planning.
Purpose:
- Assess competitive position
- Identify areas of improvement
- Prioritize actions and strategies
- Match strengths to opportunities, mitigate weaknesses and threats
- Assess competitive position
- Identify areas of improvement
- Prioritize actions and strategies
- Match strengths to opportunities, mitigate weaknesses and threats
SWOT Matrix
| Internal | External | |
|---|---|---|
| Positive | Strengths Core competencies Resources & advantages Skilled workforce, strong brand | Opportunities Market trends Technological changes Competitor weaknesses, regulation changes |
| Negative | Weaknesses Gaps in capabilities Financial limitations Low brand recognition, outdated tech | Threats New entrants Market downturns Regulatory risks, changing consumer trends |
How to Conduct a SWOT Analysis
- List internal strengths and weaknesses (resources, skills, processes)
- Identify external opportunities and threats (competition, trends, regulations)
- Organize findings in a SWOT matrix, separating internal/external and positive/negative
- Prioritize most impactful points for decision making
- Develop actionable strategies based on analysis
Strategy Matching Example Formula:
SO\ Strategy: Match\ Strengths\ with\ Opportunities
WT\ Strategy: Use\ defensive\ tactics\ to\ minimize\ Weaknesses\ and\ Threats
SO\ Strategy: Match\ Strengths\ with\ Opportunities
WT\ Strategy: Use\ defensive\ tactics\ to\ minimize\ Weaknesses\ and\ Threats
Applications and Example
Example: A retail business uses SWOT to identify its strong reputation (S), limited capital (W), rising demand for online shopping (O), and increased competition (T).
Application: Invest in online sales platforms (use S to capture O), seek partnerships to compensate for W, develop marketing to counter T.
Benefits & Limitations
| Benefits | Limitations |
|---|---|
|
- Provides clear framework - Encourages strategic focus - Supports team alignment - Adaptable to any business |
- May be subjective - Can oversimplify complex situations - Requires up-to-date information |
Conclusion
SWOT Analysis gives organizations a comprehensive view of their current situation, enabling smarter decisions and proactive strategies for competitive advantage and sustained success.