Developing business strategy — common mistakes

In exam answers, explicitly link a factor from a PESTLE analysis to an Opportunity or Threat in your SWOT. For example, 'The ageing population identified in the social analysis of PESTLE creates an opportunity for the business to develop products for this demographic.'

Draw Ansoff 2×2 with firm's chosen option circled and one sentence justification per rejected quadrant.

No, this is a common misconception. A SWOT analysis is a situational analysis tool, not a strategy. It provides a summary of the internal and external factors affecting a business at a specific point in time. The results are used to inform and help choose a strategy, but the analysis itself does not tell the business what to do.

Not at all. While it can lead to significant growth, diversification is the riskiest of Ansoff's four strategies because it involves moving into unfamiliar products and markets simultaneously. The 'best' strategy depends entirely on the specific context of the business, including its financial resources, brand strength, risk tolerance, and the opportunities available. For many businesses, lower-risk strategies like market penetration or product development are more appropriate.

While it is essential to analyse competitors' strategies, directly copying them is highly risky and often ineffective. A strategy's success depends on its alignment with a company's unique internal strengths, weaknesses, resources, and culture. A strategy that works for a market leader with a strong brand and large budget may fail for a smaller business with different capabilities. An effective strategy must be tailored to the specific circumstances of the organisation.