Introduction to entrepreneurship/IENT101/Small business/SWOT

A SWOT analysis is a process for identifying internal and external factors that might affect the success of a business. SWOT stands for:

• Strengths
• Weaknesses
• Opportunities
• Threats

Web resources

Read these two articles to learn why a SWOT analysis is useful and how to perform one:

• What is SWOT Analysis?
• How to build company strategy using SWOT Analysis

This site provides useful examples of SWOT analyses: SWOT Analysis Examples Can you find others?

SWOT Analysis Quiz

This quiz helps you to check whether you have understood the difference between strengths, weaknesses, opportunities and threats.

Imagine you are carrying out a SWOT analysis for a small local start-up business.

• Which of the following might appear in a list of strengths? (There are 2 correct answers)
  • Knowledgeable staff
    • Correct. Good staff are important to the success of a business and are an internal factor.
  • Announcement of new government grant scheme for start-up businesses
    • Incorrect. This may present a good opportunity but it is not internal to the business.
  • Business premises in prominent location
    • Correct. This is likely to help attract customers.
  • Out-dated equipment
    • Incorrect. Although the business may have got it cheaply, if equipment doesn't work well, then it is unlikely to be a strength.
• Which of the following might appear in a list of weaknesses? (There are 2 correct answers)
  • Boss has poor organisational skills
    • Correct. This is likely to be a problem, but it is something the boss can work at to improve.
  • Rising premises costs
    • Incorrect. This is external to the business.
  • Out-dated equipment
    • Correct. The business is unlikely to work as efficiently as its competitors if it has old equipment - but can plan to buy newer equipment in time.
• Which of the following might appear in a list of opportunities? (There are 2 correct answers)
  • New housing estate being built nearby
    • Correct. This is an external factor that may bring additional customers.
  • Business has a strong social media marketing strategy
    • Incorrect. This is an internal factor (something the business itself made happen), so is a strength rather than an opportunity.
  • Announcement of new government grant scheme for start-up businesses
    • Correct. This is an external factor which may provide financial help for the business.
  • High quality staff
    • Incorrect. This is a positive, but it is internal to the business, not external.
• Which of the following might appear in a list of threats? (There are 2 correct answers)
  • Shop-front signage is tatty and unclear
    • Incorrect. This is a weakness, not a threat, because it is within the business's control to change it.
  • Receptionist has limited computer skills
    • Incorrect. This is a weakness, not a threat, because it is internal - and the business can take steps to upskill staff.
  • Lack of workers in the region with appropriate skills
    • Correct. This is an external factor which may make it difficult for the business to attract or retain good staff.
  • Rising premises costs
    • Correct. This will increase the business's overheads and is largely outside of the business's control.

Were there any answers that surprised you? Do you disagree with any of the answers? Post your comments in the general discussion forum and find out what other learners think.