ITPEC FE Morning October 2019 Question 68
Which of the following is an external factor concerning an in-house product identified using SWOT analysis?
Explanation
Threats owing to a new entry — a competitor entering the market is part of the external environment.
SWOT analysis sorts factors on two axes. Internal factors belong to the company or its product and it can control them: strengths and weaknesses. External factors come from the market and environment, outside its control: opportunities and threats. A new entrant is a change in the market, so it is an external threat.
Answer (d)
Why not others:
- •(a) — cost competitiveness comes from the company's own cost structure, an internal strength or weakness
- •(b) — functional strengths are a property of the product itself, an internal strength
- •(c) — quality-related weaknesses are also a property of the product, an internal weakness
Key rule: Strengths and weaknesses describe the company and its products (internal); opportunities and threats describe the market, competitors and environment (external).
Business Strategy Management · AI-written, may contain errors
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