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SWOT ANALYSIS - Coggle Diagram
SWOT ANALYSIS
How to Conduct
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Can also detach from the culture of the business, an outsiders perspective to view the business in a new light
Top Down Approach : using external management consultants working directly with the boss of the business.
However, managers may fail to share all necessary information with those conducting the SWOT in order to present their company in good light.
Consultative Approach : a boss who takes the opportunity to travel around the business and engage in conversation with those who understand each aspect at best.
A slower, more in depth analysis where you can understand what works best and less well within the business
Can gain greater inside from a wide range of contributors and the boss can gain first hand understanding of each department.
However, staff may be less willing to point out problems if they feel this will reflect negatively on them.
KPI'S
The skill of identifying strengths and weaknesses for a business is in picking out the areas that really matter, this can be a challenge for managers who mainly focus on quantitative data, thereby the use of KPI's are a good measure of ensuring a robust identification.
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Quantifiable measures of aspects of a businesses performance that the business considers to be the main determinants of its commercial success.
Like for like sales/ Market share /Capacity utilisation /Unit costs/ Brand recognition /Staff turnover.
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External Considerations
In order to understand the situation in which they are operating it is vital to include an assessment of the external environment. Key areas to consider are;
DEMOGRAPHY - changes to the population and its structure can alter target markets as well as open up niche markets. These issues can represent threats to a business that fail to find a way to change to their advantage
LAWS - changes in laws and regulations can open up opportunities or make certain products obsolete overnight.
TECHNOLOGY - production and innovation can really seize this opportunity of development and efficiency however changes in technology can destroy sales of now outdates products.
ECONOMIC - changes in the whole range of economic variables will affect a businesses operations for example; economic growth, inflation, exchange rates, unemployment, tax, interest rates.
Purpose
SWOT analysis identifies a businesses strengths and weaknesses along with the opportunities and threats it faces.
A SWOT analysis sets out to gain full understanding of what a firm does well and not so well, and what major issues must it address in the future. It is therefore a framework used to help begin the process of strategic planning.