Key Idea: SWOT analysis helps a business understand its current strategic position by analysing internal strengths and weaknesses and external opportunities and threats. In IB exams, it is mainly used to evaluate options and justify decisions.
🏢 Internal factors: **Strengths —** what the business does well (brand, finance, skills). **Weaknesses —** internal limitations (cash flow, reputation, inefficiency). **Controllable —** the business can change these. **Used to assess capability —** what the business is good/bad at.
🌍 External factors: **Opportunities —** external chances for growth (market growth, tech). **Threats —** external risks (competition, regulation, economy). **Uncontrollable —** the business must respond to these. **Used to assess environment —** what is happening outside.
[Diagram: swot-grid]
🧠 How SWOT is used: **Evaluate options —** which option fits strengths?. **Assess risk —** does it expose weaknesses?. **Support decisions —** link SWOT to strategy. **Compare options —** which has better fit?.
⚠️ Limitations: **Subjective —** depends on opinion. **No prioritisation —** everything looks equal. **Static —** snapshot, not dynamic. **Does not give answer —** only supports decisions.
Do NOT just list strengths or weaknesses. Examiners reward answers that explain how each factor affects the decision and link it to the option being evaluated.
In 10-mark questions, use SWOT to compare options: Option A uses strengths and opportunities, while Option B exposes weaknesses and threats. This shows clear evaluation.
Tip:
- State the factor (e.g. strong brand)
- Explain it (gives customer trust)
- Link to option (helps expansion succeed)
- Explain impact (increases likelihood of success)
Important: Identify strengths/weaknesses, explain opportunities/threats, use SWOT to evaluate options, justify a decision using SWOT, or support a recommendation.
- Identify relevant SWOT factors from the case
- Classify correctly (internal vs external)
- Explain each factor clearly
- Link it to the decision or option
- Compare options using SWOT
- Finish with a justified conclusion if required