ITPEC FE Morning October 2018 Question 68

Source exam: ITPEC FE Morning October 2018Topic: Management Strategy

ITPEC FE Morning October 2018 — Question 68 of 80

SWOT Analysis — Understanding factor classification

In SWOT analysis, factors are classified along two axes: internal vs. external and positive vs. negative.

PositiveNegative
InternalStrengthWeakness
ExternalOpportunityThreat

The correct answer is a) Entry of strong companies in the market.

New competitors entering the market is a classic external negative factor — a Threat. The company cannot control it, and it can harm business performance.

Why not the others:
- b) High growth rate of the business domain is external but positive — that's an Opportunity

- c) High production efficiency is an internal positive factor — that's a Strength

- d) Low market share is an internal negative factor — that's a Weakness

Key rule: First determine if the factor is inside the company (S/W) or outside (O/T), then whether it's helpful or harmful.

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