Unit 1 – Business and the Business Environment

9 – Frameworks For Analysis - SWOT

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By the end of this unit a student will be able to:

1. Explain the different types, size and scope of organisations.

2. Demonstrate the interrelationship of the various functions within an

organization and how they link to organizational structure.

3. Use contemporary examples to demonstrate both the positive and negative

influence/impact the macro environment has on business operations.

4. Determine the internal strengths and weaknesses of specific businesses and

explain their interrelationship with external macro factors.

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 Pass , Merit and Distinction criteria For
this section
P5 Conduct internal and external analysis of specific organisations in order to identify strengths
and weaknesses.

P6 Explain how strengths and weaknesses interrelate with external macro factors.

M3 Apply appropriately SWOT/TOWS analysis and justify how they influence decision-making.

D2 Critically evaluate the impacts that both macro and micro factors have upon business
objectives and decision-making.
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 9 – Frameworks For Analysis - SWOT:

▪ 9.1 Microenvironment

▪ 9.2 SWOT Analysis

▪ 9.3 Application of SWOT Analysis

▪ 9.4 Assignment Discussion – LO 3

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 Micro - Environment
▪ This is the operating environment of the firm. This is
because the functioning of the micro-
environment has a direct and immediate bearing on
the company.

▪ They are more interlinked with the company than

macro environmental factors.

▪ These factors affect business strategy, decision

making and performance.

▪ Diagram represents the components of the micro-

environment.

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▪ Competitors
Competition is what keeps the firm thriving. Competitors are the rival sellers operating in the same
industry.

▪ Suppliers
Suppliers are the one who provides inputs such as material, components, labour and other stock of
goods to the firm.

▪ Shareholders

Shareholders are the real owners of the company who invest their money in the company’s

business.

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▪ Customers
The customers are the central part of any business as they tend to attract and retain most of the
customers to generate revenue.

▪ Employees
Placing the right person at the right job and retaining them for the long term by keeping the staff
motivated

▪ Intermediaries

Intermediaries refer to marketing intermediaries which cover agents, merchants, distributors, dealers,

wholesalers, etc.

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 SWOT Analysis
▪ Is a framework used to evaluate a company's competitive position and to develop
strategic planning. SWOT analysis assesses internal and external factors, as well as
current and future potential.

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Strengths

Describe what an organization excels at and what separates it from the competition

▪ Strong brand name

▪ Loyal customer base

▪ Strong balance sheet

▪ Unique technology

▪ Skillful Employees

▪ Widespread distribution line

▪ Competitive Advantages

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Weaknesses
This stop an organization from performing at its optimum level. They are areas where the
business needs to improve to remain competitive.

▪ Weak brand name

▪ Higher employee turnover rate

▪ High levels of debt

▪ Inadequate supply chain

▪ Lack of capital

▪ Scattered customer base

▪ Organizational structural errors

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 Opportunities
▪ Favorable external factors that could give an organization a competitive advantage.

▪ Market Developments

▪ Industry or Lifestyle Trends

▪ Innovations

▪ Technological Advancements

▪ Global Influences

▪ Tax Reliefs

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Threats
Factors that have the potential to harm an organization.

▪ Rising costs for materials

▪ Increasing competition

▪ Tight labor supply

▪ Legal Impacts

▪ Natural Disasters

▪ Depletion of Resources

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SWOT to TOWS Analysis
TOWS emphasizes the external environment

▪ Strengths-Opportunities (Maxi-Maxi) - Use your internal strengths to take

advantage of opportunities.
▪ Strengths-Threats (Maxi-Mini) - Use your strengths to minimize threats.
▪ Weaknesses-Opportunities (Mini-Maxi) - Improve weaknesses by taking
advantage of opportunities.
▪ Weaknesses-Threats (Mini-Mini) - Work to eliminate weaknesses to avoid
threats.

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 HOMEWORK
▪ Refer the additional study material attached and
complete the SWOT analysis

Cadbury UK – Case Study.

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