SWOT Analysis

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SWOT Analysis

  1. 1. Lesson 4 SWOT Analysis Module: Entrepreneurship Responsibility: Unit 2: The Business Plan—Part 1 Business Plan Committee CEO and VPs Standard: Timeline: Virtual Enterprise students will research business Weeks 3-8 for a 10-hour program opportunities and participate in the development/ Weeks 6-12 for a 5-hour program revision of a business plan. (Must comply with national Virtual Enterprise format for competition.) Lesson Create the SWOT Analysis and discuss the economic conditions and business Objective(s): risks for the selected business opportunity. A SWOT analysis is a tool used to audit an organization and its environment. This framework helps you to focus your activities in areas where you are strong and where the greatest opportunities lie. It is the first stage of planning and helps marketers to focus on key issues. It provides a good framework for reviewing strategy, position and direction of a company or business proposition, or any idea. This analysis should be used to build on strengths, resolve weaknesses, exploit opportunities, and avoid threats. Internal Audit—Inside the Firm Strengths—A firm’s resources and capabilities that can be used as a basis for developing a competitive advantage. Strengths Examples of Strengths What advantages do you have? Strong brand names What do you do well? Good reputation among customers What relevant resources are accessible Favorable access to distribution networks to you? What do other people see as your Convenient location strengths? Weaknesses—List of areas where the company might struggle. Also included are the absences of certain strengths which may be viewed as weaknesses. Do not use lack of training or expertise of employees as a weakness. Companies would not hire a person for a position unless they have the knowledge, background and skills needed to perform the job well.
  2. 2. Weaknesses Examples of Weaknesses Do customers recognize your brand Weak brand name names? What is your reputation in community? Poor reputation among customers What is your cost structure? High cost structure Do you have access to primary Lack of access to key distribution distribution channels? channels External Audit—Outside the Firm Opportunities—Areas that may reveal new opportunities for profit and growth. Opportunities Examples of Opportunities What is going on in the world that may Changes in technology and markets contribute to your success? What are the interesting trends in your Local events area? Does your product meet a currently Changes in social patterns, population unfulfilled customer need profiles, lifestyle changes, etc. Has the government recently removed or Loosening of regulations modified any international trade barriers Threats—Changes in the external environment which may present threats to the company. Threats Examples of Threats What obstacles do you face? Shifts in consumer tastes away from firm’s products What is your competition doing? New government (local, state, federal) regulations Is changing technology threatening your Emergence of substitute products position? What changes in the economy will impact Increases in interest rates, high the company? unemployment, high gasoline prices, etc. Discussion of Business Risks Risks Identified—Possible areas where the business may be in jeopardy of reaching stated goals. What could happen (inside or outside the company) that inhibit your company from reaching its goals? Risks Addressed—Clear evidence of understanding of identified risks and feasible
  3. 3. solution/strategy proposed to eliminate or reduce risk. What could your company to minimize or reduce risk? *Extracted in part from “United States Network of Virtual Enterprises National Business Plan Competition” with explanations from SCVEN. What you need to do and how to do it: Use the Market Analysis (Lesson 3) information, the website resources, and the SWOT Analysis Worksheet to help create/revise the SWOT Analysis of the business plan using the guidelines above. Make sure you have documentation of your analysis. For example: If you are selling cars, an increase in interest rates may affect sales because customers will need to pay more to borrow money to purchase a car. What documentation have you found that indicates an increase in interest rates will substantiate your statement? (ie., economic forecast, auto sales information based on previous increases in interest rates, etc.) For the discussion of business risks, identify your business risks and explain how you would eliminate or minimize these risks. Investors want to know you are prepared to react in a positive way to potential risks. Tasks SWOT Analysis SWOT Analysis Rubric Economic Conditions and Business Risks Materials Needed: SWOT Analysis Worksheet Market Analysis (Lesson 3) information Resources: Textbooks: Eggland, Steven S., Les R. Dlabay, and James L. Burrow. Intro to Business. 5th ed. Cincinnati: South-Western, 2004. Greene, Cynthia L. Entrepreneurship Ideas in Action. 2nd ed. Cincinnati: South-Western, 2004. Townsley, Maria. Survivor’s Guide to Small Business. Cincinnati: Thomson South-Western, 2003 Websites: http://www.smalltownmarketing.com/swot.html http://www.businessballs.com/swotanalysisfreetemplate.htm http://www.businesslink.gov.uk/bdotg/action/detail?type=RESOURCES&itemId=1074405230 http://www.mftrou.com/how-to-do-a-SWOT-analysis.html http://www.marketingteacher.com/Lessons/lesson_swot.htm

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