 | SWOT analysis: Strengths, Weaknesses, Opportunities,
Threats. |
| Internal business environment:
 | Strengths- what we do well |
| Weaknesses- what problems or weaknesses we have
|
|
| External business environment:
| Opportunities- the chances to expand and improve
presented to us |
| Threats- possible changes that will do us harm
|
|
| Market analysis- collecting, summarising and analysing
information about the state of the market, customer, the threats and
opportunities that the market presents, and any advantages or disadvantages
that the business is likely to have over its competitors. |
| The business needs to segment the whole market and
decide on a target market |
| A goal states what a business expects to achieve over a
set period which will assist in realising the business's vision or mission.
|
| Goals can be:
| Financial- profit, return on investment, product
sales, market share, growth, diversification etc. |
| Social- community services, provision of employment,
social justice, ecological sustainability |
| Personal- goals of the owner |
|
| These goals sometimes conflict- business owners need to
strike a balance between competing goals or find a way to allow them to
coexist. |
| Goals will often to allocated to different functional
areas- production, finance, marketing, sales, human resources etc.
|
| Projections or forecasts are the business's predictions
about the future. |
| A break-even analysis determines the level of sales
that needs to be generated to cover the total cost of production. The cost of
production includes fixed costs and variable costs. |
| The number of units that need to be sole to break-even
is = total fixed costs divided by (unit price-variable costs per unit).
|
| A decision tree is a diagram that represents different
courses of action, possible outcomes of each action, and the probability of
success for each action. It presents these alternatives as branches of a tree.
|
| budgets are the business's financial plan for the
future. No business should commence operation without having prepared a
budget. Types of budgets include:
| capital expenditure |
| cash |
| raw materials |
| labour hours |
| production/output |
|
