SWOT Analysis: A Strategic Planning Tool
- Jojo is the CEO of a company.
- How does Jojo decide where to focus theefforts?
This is where SWOT analysis comes in, a tool that helps businesses understand their current position and plan strategically.
SWOT analysis
SWOT analysis is a strategic planning tool used to identify internal strengths and weaknesses and external opportunities and threats affecting an organization.
Breaking Down SWOT Analysis
1. Strengths: Internal Advantages
- Strengths are the internal factors that give a business a competitive edge.
- These are the unique qualities or resources that set the company apart.
A strong brand, loyal customer base, efficient supply chain, or innovative products.
When identifying strengths, focus on what your business does better than competitors.
2. Weaknesses: Internal Disadvantages
- Weaknesses are the internal factors that hinder a business' performance.
- These are areas where the company lacks or struggles.
High production costs, outdated technology, poor customer service, or lack of expertise.
- Be honest when identifying weaknesses.
- Acknowledging them is the first step to improvement.
3. Opportunities: External Factors to Leverage
- Opportunities are external factors that a business can exploit to grow or improve.
- These are favorable trends or changes in the environment.
Market growth, technological advancements, changes in consumer preferences, or regulatory changes.
- Look for opportunities that align with your strengths.
- This maximizes the potential for success.
4. Threats: External Risks
- Threats are external factors that could harm a business.
- These are challenges that the company needs to address or mitigate.
Increased competition, economic downturns, changing regulations, or supply chain disruptions.
Identify threats early to develop strategies that minimize their impact.
How SWOT Analysis Works
- SWOT analysis involves listing strengths, weaknesses, opportunities, and threats in a four-quadrant matrix.
- This visual representation helps businesses see the big picture and make informed decisions.
Here is the SWOT analysis for the predicted Paper 1 Case Study about Myt PLC for the upcoming May 2025 examination:
You can check the full study guide for the predicted case study and other materials via this link: https://www.revisiondojo.com/ib/ib-business-management/papers.
Applications of SWOT Analysis
1. Strategic Planning
SWOT analysis helps businesses align their strategies with their strengths and opportunities while addressing weaknesses and threats.
A company with a strong brand and market growth opportunities might focus on expanding into new regions.
2. Decision-Making
Businesses use SWOT analysis to evaluate options and choose the best course of action.
For instance, a company considering a new product launch can assess whether its strengths align with market opportunities.
3. Problem-Solving
SWOT analysis helps identify root causes of problems and develop targeted solutions.
If high costs are a weakness, the company might invest in more efficient technology.
How can SWOT analysis help a business identify growth opportunities?
