CSEET · Economic and Business Environment · Business Environment
A textile exporter's managers classify the following four items in a SWOT exercise. Which classification is INCORRECT?
Classifying the firm's own high debt-servicing burden as a threat is incorrect. Debt is an internal, unfavourable factor under the firm's control, so it is a weakness. Threats must be external factors, such as competitor actions or adverse regulation.
- ASkilled workforce with low attrition: Strength
- BDepreciation of the rupee making exports cheaper abroad: Opportunity
- COutdated spinning technology: Weakness
- DThe firm's own high debt-servicing burden: ThreatCorrect
Explanation
SWOT separates internal factors (strengths, weaknesses) from external ones (opportunities, threats). The firm's own debt burden is internal and unfavourable, so it is a weakness, not a threat. The other three classifications are correct.
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