Question

Define what a SWOT is, how it is used to develop a new service or business.  Be sure to write a SWOT for this new service or business

Answer 1

Solution:-

SWOT is a business strategy which helps to evaluate strengths, weaknesses, opportunities and threats.

SWOT is an acronym which stands for:-

1. Strength
2. Weaknesses
3. Opportunities
4. Threats

Strengths are the internal to the company and are within the control of business owner, weaknesses on the other hand are due to external forces and beyond the control of the company.

SWOT Analysis helps to see things with new perspective. It can help to predetermine a business threat which may hinder future growth of business.

SWOT ANALYSIS can be used to develop new business or service in following ways:-

1. Once a company has listed all the strength it possess, it can use that strength to develop new business idea
2. If a business can come up with new business idea, then marketing strategy will be based on innovations. SWOT analysis can be used to focus the marketing efforts in the area or a product where company feels it will have most advantage or opportunity with minimum amount of risk
3. Generally before developing a new business it becomes difficult to identify the competitors. SWOT analysis helps to do so. It helps to research the competitors. It also helps to provide information after self-analysis of the company and then providing a clear picture of how company can deal with the competitors in future.
4. Assessment of company’s weakness will help to prevent the mistake of launching the products which are not up to par with what all the other well established competitors are already offering. What new can be done to a product so that it can be highly demanded in the market ?, the answer to this can be given through SWOT analysis
5. Evaluating the strength of company will help in better allocation of resources. This is because after evaluating the strengths the company will be able to determine where and how the resources should be used in development of new product so that high revenue growth and profitability can be earned.