For a business to know its current position and plan a strategy, the business may do a SWOT analysis. SWOT is Strengths, Weaknesses, Opportunities and Threats.
Strengths and weaknesses are internal factors, opportunities and threats are external factors.
Strengths are the things in the business’ favour, what they are good at, what they have available for their use so they can maximise on these things.
Weaknesses are the things which they are not so good at, things against them.
Opportunities are things that are outside the business and that the business has no control over, but is in their favour, and is helping them.
Threats are things which are obstacles to the business but are external to the business and the business has no control over them.
Most businesses have Mission statements, Business aims and Business objectives.
A Mission statement is the purpose of the business, why it was created, e.g. To create value for our customers, to earn their lifetime loyalty ; Tesco. To benefit and refresh everyone who is touched by our business; Coca-Cola.
Business aims are the basic goals of the business, what they ultimately want to achieve. E.g. to meet the needs of customers.
Business objectives are a more detailed version of business aims. Business objectives are SMART.
SMART stands for Specific, Measurable, Achievable, Realistic, Time-specific.
E.g. To increase profitability by 20% in the next year. This is specific (says what they want), Measurable (you can wok out 20%), Achievable (they could do it), Realistic (not impossible in the time specified), time-specific (mentioned a time frame).