ManagementLesson 1 of 3 in the course Strategic Analysis: Understanding a Firm’s Competitive Environment

SWOT Analysis: Factor Classification, Strategic Choices, and Limitations

5 flashcards · 5 quiz questions · 5 match pairs · 5 fill-in sentences · English

Save course
Lesson progress
0 / 5

Your progress is kept in this browser only.Sign up to save it

Summary

SWOT analysis helps managers organize information about a firm and its competitive situation. It separates factors inside the firm from conditions in the external environment, helping leaders recognize what they can build on and what they may need to address.

Strengths are capabilities, resources, and assets that help a firm perform well. Examples include cash available for investment, skilled employees, effective marketing, or a strong ability to produce goods quickly. Identifying strengths helps a firm plan ways to use them. For instance, a company with strong sports marketing expertise may be well positioned to introduce products for a new sport.

All flashcards

What is SWOT analysis?
A framework for organizing a firm's strengths, weaknesses, opportunities, and threats.
What is a firm strength?
An internal capability, resource, or asset that helps the firm perform well.
What is a firm weakness?
An internal gap in a firm's resources or capabilities that may limit its actions.
How do opportunities differ from threats?
Both are external factors; opportunities may favor success, while threats may hinder it.
How can a firm address a capability it does not want to develop internally?
It can obtain help from an outside provider, such as hiring a payroll-processing firm.

Quiz questions

  1. How should managers use SWOT findings to make the analysis useful?Answer: Use the findings to shape strategic choices rather than leave them as a list.
  2. A decline in car ownership among urban consumers may affect conventional car sales and car sharing in what way?Answer: It may threaten conventional sales while creating an opportunity for car sharing.
  3. What can managers do with information about an external threat?Answer: Prepare responses, adjust plans, or seek alternative sources of revenue.
  4. Why does a SWOT analysis not guarantee a complete strategic assessment?Answer: Analysts may overlook relevant factors, including possible threats.
  5. How can a firm make use of an internal strength?Answer: Apply it to pursue a suitable external opportunity.

Based on Principles of Management by David S. Bright, Anastasia H. Cortes, Eva Hartmann, K. Praveen Parboteeah, Jon L. Pierce, Monique Reece, Amit Shah, Siri Terjesen, Joseph Weiss, Margaret A. White, Donald G. Gardner, Jason Lambert et al. (OpenStax), licensed CC BY 4.0. Adapted into a summary, flashcards and quizzes.

More in Management

All Management lessons
ManagementCSR, Stakeholder Management, and Organizational Implementation5 flashcards · 5 quiz questions · 4 gamesPlay free →ManagementScientific Management: Taylor's Methods, Principles, and Legacy5 flashcards · 5 quiz questions · 4 gamesPlay free →ManagementSystems, Contingency, and Evidence-Based Management5 flashcards · 5 quiz questions · 4 gamesPlay free →ManagementOrganizational Goals: Types, Formulation, Conflicts, and Hierarchy5 flashcards · 5 quiz questions · 4 gamesPlay free →ManagementBehavioral Leadership: Research Dimensions, Grid Styles, and Situational Fit5 flashcards · 5 quiz questions · 4 gamesPlay free →ManagementManagerial Communication: Message Flow, Feedback, and Noise5 flashcards · 5 quiz questions · 4 gamesPlay free →