The grid on the wall at Mill Lane: The SWOT Lena and Marco drew up before Station Road opened (6.1.1) is still pinned up in the Mill Lane office. Regulars, fresh bread every night and the crackers the cafés buy are its strengths; one bakehouse for every shop and a failing oven its weaknesses; the station's commuters and two new cafés that want the crackers its opportunities; Crumbline's kiosk, dearer flour and Park Road's rent its threats.
Marco looks at it for a long time and asks the only question that matters: so what do we do?
The grid cannot answer him. It says where the bakery stands, not where it should go.
A SWOT is a picture of a business's position (a situational tool). Deciding what to do is a separate step. First you turn the entries into possible courses of action (strategic options); then you judge which one is best. The quickest way to find options is to pair the boxes: one entry from inside the business with one from outside it.
Pair an inside box with an outside box
Strength + opportunity: use it
Build on something the business does well to take a chance outside. The crackers already sell to cafés, and two new cafés near the station have asked for them. Option: supply the two new cafés.
Weakness + opportunity: fix it first
Mend a gap so the business can take the chance. One Mill Lane oven is failing just as Station Road adds about 250 loaves a night. Option: buy the $45,000 second deck oven Lena is planning, now.
Strength + threat: defend with it
Answer a danger with what the business does well. Crumbline's kiosk sells a coffee and a pastry for $3.50 inside the station; Lena's bread is baked in town every night. Option: a breakfast roll baked that morning, sold on freshness, not on price.
Weakness + threat: protect yourself
Keep a weak spot out of a danger's way. Every shop depends on one bakehouse and its flour, and flour will cost more after a poor harvest. Option: agree a year's flour at a fixed price with Valley Grain.
Copying is not deciding: A SWOT that only copies facts from a case into four boxes has decided nothing. Every one of those facts was already in the case.
The work starts after the grid: which entries matter most, which options they point to, and which option wins.
Notice that the four pairings gave four different options, and they compete for the same money. The $45,000 oven and a breakfast counter at Station Road would both need paying for in the same year, and how much cash the bakery has is not even on the grid. A SWOT can point to options that pull against each other, so each option has to be judged on its own.
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Take the first option: supply the two new cafés with crackers. In the grid it looks perfect, a strength meeting an opportunity. Judging it means asking it four questions, with a figure wherever the case has one.
Four questions for any option
Does it fit?
Does it build on a strength or take an opportunity, and does it lean on a weakness? The café deal builds on the crackers, but it adds work at Mill Lane, where one oven is failing.
Does the money work?
What does it bring in, what does it cost, and can the business pay for it now? A figure turns an opinion into evidence.
What could go wrong?
Which threat could hit it, and how hard? What happens if a forecast turns out wrong?
Who is affected?
Staff, customers, suppliers and owners (stakeholders) can each gain or lose from the same option, and their reaction can make it or break it.
| The figure | What it means | |
|---|---|---|
| The order | 2 cafés × 50 packets a week × 52 weeks = 5,200 packets | More than a quarter on top of the 18,000 packets sold in 2025 |
| Left from each packet (contribution) | $2.50 - $0.60 = $1.90 | The same price the other cafés pay (5.5.1) |
| Left each year | 5,200 × $1.90 = $9,880 | No new machine: the crackers already have a recipe, a price and a packet |
| What would wipe it out | $9,880 ÷ $2.10 = about 4,700 loaves a year | About 90 loaves a week of Station Road sales lost to the two cafés |
The threat the grid did not show: The two new cafés are near the station. They sell coffee and breakfast to the same 1,850 commuters Station Road was opened for, and Lena's crackers would give them one more reason to stop there.
Each loaf Station Road does not sell costs the bakery $2.10. If the cafés take about 90 loaves' worth of its sales a week, the $9,880 from the crackers is gone.
Then the people. Priti's team would bake about 100 more packets a week on top of the night's bread, with one oven failing. The cafés that already stock the crackers may not like two new rivals selling them. And the Station Road staff, whose shop is still building its trade, would be competing with cafés that sell Lena's own crackers.
A judgement, not a yes or no: Judging an option ends in a decision and what it depends on. Supply the two cafés with crackers only, never bread or pastries, and watch Station Road's morning sales for a month.
The SWOT pointed to the option. The figures and the people decided it.
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What the grid missed: Lena and Marco's SWOT put the two new cafés under opportunities. It never showed that the same cafés sell breakfast to the commuters Station Road needs.
That was not bad luck. It comes from the way a SWOT is built.
| The limit | At Lena's Bakery | What covers it |
|---|---|---|
| It is subjective. The entries are opinions, and people disagree. | Marco files the two new cafés as an opportunity: more cracker sales. Lena sees two rivals for Station Road's commuters: a threat. | Back every entry with evidence: sales, a survey, a figure. |
| It has no weights. Every entry gets one line, large or small. | 'One oven is failing' gets one line, the same as 'Park Road's rent has gone up', though only one can empty every shop. | Rank the entries, or pick the two or three that matter most. |
| It is a snapshot. It shows one moment. | Drawn before Station Road opened. Within weeks, the shop's first sales had already changed the picture. | Date it, and redo it when something big changes. |
| It does not decide. It lists; it does not choose or count. | It could not show that losing about 90 Station Road loaves a week wipes out the cracker deal. | Judge each option with figures (contribution, break-even, payback) and its effect on people. |
| It is only as good as its information. | Cash is not on the grid at all, though the bakery ended 2025 with $25,000 and an overdraft. | Collect the facts first. What nobody writes down never reaches the decision. |
None of this makes a SWOT useless. It is quick and cheap, it puts the inside and the outside of a business on one page, and it gets a team talking about the same facts before they argue about the plan. It is a good start and a poor finish.
What a SWOT does well
- Quick and cheap: one page, built from facts the business already has
- Puts strengths and weaknesses beside opportunities and threats
- Gets the team to agree the facts before arguing about the plan
- Points to options when the boxes are paired
Where it stops
- Opinions, not measurements
- No weights: a small entry looks as big as a large one
- A snapshot that dates quickly
- Says nothing about cost, risk or people until you add them
The start of a decision: A SWOT is where a decision starts, not where it ends. Pair the boxes to find the options, then judge each option with figures and with the people it affects.
How this comes up: SWOT decisions are tested in the long case questions, for ten marks: using information in the stimulus, discuss whether a business should choose Option 1 or Option 2; or, using two tables of data, recommend which strategy a business should follow to gain an advantage over its competitors.
Whenever a SWOT is used to plan, it has to lead somewhere. A grid that only copies the case into four boxes is description; the options and the judgement that follow it are the answer.
The ten-mark pattern
- Option 1, for. What it builds on or protects, with a figure from the case.
- Option 1, against. What it misses or risks.
- Option 2, for. The strength it uses and the opportunity it takes.
- Option 2, against. The weakness it leans on, the threat that could hit it, and who loses.
- Decide, and say what it depends on. One option, the condition that would change your mind, and what the case does not tell you.
Two traps: A SWOT and no decision. Four boxes of facts from the case is where the answer starts, not what it is. The answer is the weighing of the two options.
Points that fit any business. 'It could raise sales' fits anyone. 'The block brings 900 workers next to a shop that is 80 loaves a day short of its target' fits only this one.
Using information in the stimulus, discuss whether Lena's Bakery should choose Option 1 or Option 2.
Model answer plan
See the mark-by-mark plan — for / against / judgement, with marking guidance — in study mode.