CAT / FIA FBT Syllabus A. The Business Organisation, Its Stakeholders - SWOT Analysis - Notes ^{1 / 3}

SWOT analysis is a model that assesses organisation’s:

1. Strengths 

   what an organisation can do

2. Weaknesses 

   what an organisation cannot do

3. Opportunities 

   potential favourable conditions for an organisation

4. Threats 

   potential unfavourable conditions for an organisation

SWOT analysis is an important step in planning and its value is often underestimated despite the simplicity in creation.

Strengths and Weaknesses

• A manager must begin to think in terms of what the firm can do well and where it may have deficiencies. 

  Strengths and weaknesses exist internally within a firm, or in key relationships between the firm and its customers.

• SWOT analysis must be customer focused to gain maximum benefit.  

  Strength is really meaningful only when it is useful in satisfying the needs of a customer.

Opportunities and Threats

• Focus on the external environment when looking for Opportunities and Threats.

• Opportunities and Threats can occur in the competitive, economic, political/legal, technological, or socio-cultural environments.

The main sources of Competitive Advantage

Competitive advantage occurs when an organisation acquires or develops an attribute or combination of attributes that allows it to outperform its competitors.  

Competitive advantage is a key determinant of superior performance and it will ensure survival and prominent placing in the market. 

Some of the main sources of competitive advantage include:

1. Synergy

2. Effective leadership

3. Teamwork

4. Learning organization

5. Economies of scale

6. Differentiation

7. Cost leadership