Preview
IB DP Business Management — Unit 1: Introduction to Business Management | SL | 1.3 Business Objectives and Strategy
📋 What You Will Learn
- Define SWOT analysis and identify its four components: strengths, weaknesses, opportunities, and threats
- Explain how internal factors (strengths and weaknesses) differ from external factors (opportunities and threats)
- Construct a SWOT grid for a real business and populate it with relevant, specific evidence
- Apply SWOT analysis to support a strategic decision — such as market entry, product launch, or expansion
- Evaluate the usefulness and limitations of SWOT analysis as a strategic planning tool
- Link SWOT findings to other tools (Ansoff matrix, STEEPLE) and to the concepts of change and sustainability
📊 Topic Importance
| Paper | Relevance | Common Question Types |
|---|---|---|
| Paper 1 | High | Identify/explain SWOT factors for the pre-seen company; use SWOT to justify a strategic recommendation |
| Paper 2 | Moderate–High | Section A: identify strengths/weaknesses from stimulus; Section C: evaluate SWOT in the context of change or sustainability |
| Paper 3 (HL) | Moderate | Use SWOT to analyse a social enterprise's strategic position and support a justified recommendation |
🔍 Guiding Question How can a business systematically assess its own position — both what it controls and what it cannot — in order to make better strategic decisions?
🌍 Why This Matters In 2023, Lego reported record revenues while simultaneously acknowledging a key vulnerability: its products are made almost entirely from oil-based plastic, creating a sustainability threat as environmental regulation tightens. That single tension — a financial strength alongside an environmental weakness — is exactly the kind of strategic insight a well-constructed SWOT analysis is designed to surface.
What Is SWOT Analysis?
Every business must periodically step back and ask: where do we stand? SWOT analysis provides a structured framework for answering that question by organising information into four categories before any strategic decision is made.
📘 SWOT Analysis A strategic planning tool that identifies a business's internal Strengths and Weaknesses alongside external Opportunities and Threats , in order to inform decision-making and strategy formulation.
- Internal factors (within the firm's control): Strengths and Weaknesses — reflect the current state of the organisation's resources, capabilities, and performance.
- External factors (outside the firm's control): Opportunities and Threats — reflect conditions in the business environment that the firm must respond to.
- SWOT is a snapshot tool: it captures the situation at a point in time and must be updated as conditions change.
- It is most useful as a precursor to strategy — the output of a SWOT should lead to decisions, not just a list.
🔗 Analogy: The Medical Check-Up Think of SWOT as a business health check. Strengths and weaknesses are like your current fitness level — things you can work on. Opportunities and threats are like the environment you live in — the air quality, the job market — things you must navigate but cannot fully control. A doctor (strategist) uses both to recommend a course of action.
The Four Components in Detail
Strengths — Internal, Positive
Strengths are internal capabilities or resources that give the business a competitive advantage. They represent