Skip to content

CA Intermediate · Financial Management and Strategic Management · Strategic Analysis: Internal Environment

Ravi Retail has strong brand loyalty and a robust distribution network, but suffers from outdated IT systems and high employee attrition. When these are listed in a SWOT analysis of the internal environment, how should they be classified?

Brand loyalty and the distribution network are strengths, while outdated IT systems and high attrition are weaknesses. SWOT classifies internal positive and negative factors as strengths and weaknesses, whereas opportunities and threats refer to the external environment.

  1. AStrengths: IT systems and attrition; Weaknesses: brand and distribution
  2. BStrengths: brand and distribution; Weaknesses: IT systems and attritionCorrect
  3. COpportunities: brand and distribution; Threats: IT systems and attrition
  4. DStrengths: brand only; Threats: distribution, IT systems and attrition

Explanation

Brand loyalty and distribution network are internal positives, so strengths. Outdated IT and high attrition are internal negatives, so weaknesses. Opportunities and threats are external factors, so options three and four are wrong.

Did you get it right without looking?

One question tells you little. A timed set on Strategic Analysis: Internal Environment shows your real accuracy, how long you take and where you lose marks.

Practise Strategic Analysis: Internal EnvironmentFree diagnostic mock

More Strategic Analysis: Internal Environment questions