IB Business Management HLTopic 6 — The Business Management ToolkitPapers 1, 2 & 3Situational tool~10 min read
Using SWOT Analysis
SWOT is the first tool most students meet and the easiest one to throw marks away on. The four letters are simple. The marks are in two other places: putting each fact in the right box, and then saying what the business should actually do about it.
📘 What you need to know
SWOT sorts information about one business into four boxes: Strengths, Weaknesses, Opportunities, Threats.
Strengths and weaknesses are internal. They sit inside the business and the business can change them.
Opportunities and threats are external. They sit outside and the business can only react to them.
SWOT describes a position. It does not make the decision. Managers do that afterwards.
In “explain” questions you usually get one mark for a correct point and a second mark for applying it to the named business.
Evaluation marks come from questioning the data behind the SWOT: who collected it, when, and how biased it is.
The four boxes
Think of SWOT as a sorting tray. Every fact you have about a business drops into one of four boxes. Two of them are about the business itself. Two of them are about the world around it.
The grid is not just decoration. Reading it as a grid stops the most common error of all, which is dropping an outside factor into strengths.
Box
Question it answers
Example for a small bakery chain
Strengths
What do we do better than rivals?
Recipes made in-house, so no supplier can copy the taste
Weaknesses
Where do we fall behind?
Only two shops, so fixed costs are spread over few sales
Opportunities
What is happening outside that we could use?
A new office block opening two streets away
Threats
What is happening outside that could hurt us?
Flour and butter prices rising faster than wages
The test that never fails
Students mix up internal and external all the time. There is one question that sorts it every single time:
The sorting question
Could the business change this by itself next month?
Yes → internal (S or W) No → external (O or T)
“Our staff are poorly trained” — the business could book training next month, so it is internal, a weakness. “Customers are eating less bread” — the business cannot change that by itself, so it is external, a threat.
Strong brand is a strength. Growing demand for the type of thing you sell is an opportunity. They feel similar because both are good news, but one is yours and one belongs to the market. Examiners notice the difference.
Watch the wording. “Rising interest rates” is a threat for a business with big loans, but an opportunity for a business sitting on savings. The same fact can land in different boxes for different businesses, so always ask “for whom?”.
Turning a SWOT into a decision
A completed SWOT is a list. Nobody gets top marks for a list. The value comes when you pair boxes together and suggest an action.
🧩 From four boxes to one recommendation
Harness strengths. Push harder on the thing you already do well.
Fix weaknesses. Spend money or time on the gap, or accept it and work around it.
Seize opportunities. Move before rivals do, because opportunities do not wait.
Reduce threats. You cannot stop them, so plan for them: build stock, fix prices, spread suppliers.
Pair them up. The best answers match one box to another: “use strength X to grab opportunity Y”. That is where the top band lives.
Worked examples
WORKED EXAMPLE
Explain one strength and one weakness that Loop Cycles, a bicycle repair chain with six city workshops, may identify in a SWOT analysis. [4 marks]
Step 1: pick one point for each boxStrength: trained mechanics. Weakness: all six sites are in one city.Step 2: write the point, then apply it to Loop CyclesA strength is that Loop Cycles employs fully trained mechanics [1], which means repairs are done right first time and customers come back rather than trying a cheaper rival [1].A weakness is that all six workshops sit in a single city [1], so if that city’s cycling demand falls, Loop Cycles has no other market to fall back on [1].4 marks: two points, both appliedthe second mark each time is the “so what for this business” sentence — never leave it out
WORKED EXAMPLE
Explain two threats that Loop Cycles may identify. [4 marks]
Step 1: check both points are genuinely outside the businessNew rivals, and a council decision, are both outside Loop’s control. Good.Step 2: write each threat and apply itLarge sports retailers now offer cheap in-store repairs [1], which could pull away the simple, high-margin jobs such as puncture and brake work that Loop relies on [1].The council is cutting the budget for cycle lanes [1], so fewer people may cycle to work and demand for servicing in Loop’s only city would fall [1].4 marks: two applied threats“increased competition” on its own is a list item, not an explanation
How good is the tool?
Evaluation questions do not ask you to rewrite the SWOT. They ask whether the SWOT can be trusted. Attack the data, not the letters.
Question to ask
Why it changes the answer
Where did the data come from?
Managers writing their own SWOT tend to inflate strengths and quietly forget weaknesses
How old is it?
A SWOT is a photograph of one moment. Six months later the threats may have moved on
Who was asked?
Shop-floor staff and customers see weaknesses that head office never hears about
How deep does it go?
Four bullet points per box looks tidy but hides how big or how likely each factor is
Does it rank anything?
SWOT treats a tiny threat and a business-ending threat as equal lines on a page
WORKED EXAMPLE
Explain one advantage and one disadvantage to Loop Cycles of carrying out a SWOT analysis. [4 marks]
Advantage, then appliedSWOT gives Loop a clear, shared picture of its position [1], so the six workshop managers can agree on one plan instead of each guessing what matters most [1].Disadvantage, then appliedSWOT is only as good as the information put into it [1], and if Loop’s own managers write it they may play down the risk of relying on a single city [1].4 marksnotice both halves name the business — generic answers cap at 2
💡 Exam tips
Name the business in every sentence. The application mark is usually the easier of the two.
Read the command word. “Identify” wants a point. “Explain” wants a point plus a consequence. “Evaluate” wants both sides and a judgement.
If the question says “two threats”, give exactly two and develop both. A list of five undeveloped threats scores less.
Use the case study, not your own general knowledge. Every point should be traceable to a line in the text.
For 10-mark questions, finish with a judgement: is the SWOT useful enough to base this decision on, or does the business need another tool too?
SWOT pairs well with STEEPLE. STEEPLE fills the O and T boxes properly, so mentioning it shows range.
⚠ Common mix-ups
Putting an outside factor in strengths. “Growing market” is an opportunity, not a strength.
Confusing a weakness with a threat. Weakness = our fault. Threat = the world’s fault.
Listing without explaining. Bullet points earn identification marks only.
Saying SWOT “makes the decision”. It organises information; managers decide.
Repeating one idea in two boxes to fill space. Examiners mark it once.
Vague evaluation such as “it may not be accurate”. Say why: who collected it, when, and with what bias.
Up next: Using the Ansoff Matrix — once you know your position, Ansoff tells you which direction to grow in and how risky each direction is.
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