ITPEC FE Morning October 2018 Question 68

In SWOT analysis, which of the following is generally positioned as a threat?

Explanation

Entry of strong companies in the market — a new powerful competitor is an external factor that harms the company, which is a threat.

SWOT sorts factors on two axes:

FactorHelpfulHarmful
InternalStrengthWeakness
ExternalOpportunityThreat

The company cannot control who enters its market, and a strong entrant takes customers and pushes prices down, so it is external and harmful.

Answer (a)

Why not others:

  • •(b) — a fast-growing business domain is external but helpful: an opportunity
  • •(c) — higher production efficiency than competitors is internal and helpful: a strength
  • •(d) — a low market share is the company's own position and harmful: a weakness

Key rule: First ask whether the company controls the factor (internal S/W) or not (external O/T), then whether it helps or hurts.

Business Strategy Management · AI-written, may contain errors

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