What is SWOT analysis? Give examples.

Question

What will be an ideal response?

Answer 1

Student answers and examples will vary, but should demonstrate knowledge of the four elements of a SWOT analysis. Once managers have analyzed the external environment and the internal resources of the organization, they have the information they need to assess the organization's strengths, weaknesses, and opportunities, and threats. This is called a SWOT analysis. Students should give examples that demonstrate an accurate understanding of SWOT analysis as described in the textbook. Strengths and weaknesses refer to internal resources. For example, an organization's strengths might include skilled management, positive cash flow, and well-known and highly regarded brands. Weaknesses might be lack of spare production capacity and the absence of reliable suppliers. Opportunities and threats arise in the macroenvironment and competitive environment. Examples of opportunities are a new technology that could make the supply chain more efficient, and an underserved market niche. Threats could include the possibility that competitors will enter the underserved niche if it is shown to be profitable.