Setting Clear Business Goals: SWOT Analysis – JSS3 Business Studies Lesson Note (First Term)

A business goal is an objective or target that a business aims to achieve within a specific period. SWOT analysis is a tool for identifying a business’s strengths, weaknesses, opportunities and threats before goals are set.

Behavioural objectives

By the end of the lesson, students should be able to:

1. Define a business goal.
2. Explain why an entrepreneur should identify goals at the start of a business.
3. State what SWOT stands for.
4. Explain strengths, weaknesses, opportunities and threats, with examples.
5. Say why SWOT analysis should come before the setting of business goals.

What is a business goal?

A business goal is an objective or target that a business aims to achieve by a specific period.

• Who sets it: the entrepreneur identifies the goals when setting up the business.
• What follows: the entrepreneur sets targets and works at achieving them.
• Example: a baker aims to sell 200 loaves of bread each week within three months.
• Time limit: every goal has a period in which it must be achieved.

Why should an entrepreneur identify goals at the start of a business?

Goals should be identified at the start because a business may fail if its goals are not known.

• Direction: goals show the entrepreneur where the business is going.
• Targets: goals give workers and owners something clear to work towards.
• Measurement: the entrepreneur can check whether the business is succeeding.
• Planning: goals help in deciding how to use money, time and workers.

What are the features of a good business goal?

A good business goal is clear, measurable, achievable, realistic and has a time limit.

• Clear: it states exactly what the business wants.
• Measurable: progress can be counted, for example in naira or number of items sold.
• Achievable: the business has the means to reach it.
• Time-bound: it names the period, such as one year.

What is a SWOT analysis?

SWOT analysis is a tool for finding out the strengths, weaknesses, opportunities and threats of a business.

SWOT is an acronym for Strengths, Weaknesses, Opportunities and Threats.

What are strengths in a SWOT analysis?

Strengths are the internal characteristics of a business that give it an advantage over others.

• Sufficient capital: the business has enough money to run and grow.
• Strategic location: the shop or factory is where customers can reach it easily.
• Effective and efficient workforce: workers are skilled and do their jobs well.
• Good customer relations: customers are treated well and return to buy again.

These strengths can help a business venture achieve its goals.

What are weaknesses in a SWOT analysis?

Weaknesses are the internal characteristics that put a business at a disadvantage compared with others.

• Insufficient capital: the business cannot afford stock, tools or expansion.
• Low-standard products: goods are poor, so customers go elsewhere.
• Poor marketing: people do not know about the business or its products.
• Poor customer service: customers are treated badly and leave.
• Absenteeism among workers: workers stay away, so work is delayed.

What are opportunities in a SWOT analysis?

Opportunities are external factors in the business environment that help the business to achieve its objectives.

• Infrastructural facilities: good roads and constant power supply make business easier.
• Growing demand: more people want to buy the product.

What are threats in a SWOT analysis?

Threats are external factors in the business environment that can have adverse effects on the business.

• New government law: the enactment of a new law can make the business harder to run.
• Bad debt: customers who owe the business fail to pay.
• Competition: new businesses selling the same goods can take away customers.

What is the difference between internal and external factors?

Internal factors are things inside the business that the owner can control, such as capital, workers and products.

External factors are things outside the business in its environment, which the owner cannot control, such as laws, roads and competitors.

When is SWOT analysis used?

SWOT analysis is carried out before business goals are set, so that the entrepreneur can set achievable goals and objectives.

• Enterprise: it can be done for a whole business.
• Product: it can be done for one item the business sells.
• Industry: it can be done for a whole line of business, such as baking.
• Venture: it can be done for a new business idea.

How is a SWOT analysis carried out?

1. Draw a four-part grid and label it Strengths, Weaknesses, Opportunities and Threats.
2. List the internal strengths of the business.
3. List the internal weaknesses of the business.
4. List the external opportunities in the business environment.
5. List the external threats in the business environment.
6. Use the lists to set goals that the business can achieve.

Evaluation

1. Define a business goal.
2. What is a SWOT analysis?
3. State what each letter of SWOT stands for.
4. Give two examples each of a strength and a weakness of a business.
5. Why should SWOT analysis be done before business goals are set?

Assignment

Reading assignment

WABP Business Studies Book 3, pages 54 to 63.

Weekend assignment

1. The objective of a business that is to be achieved at a specific period is called: (a) business strategy (b) business purpose (c) business document (d) business map.
2. Before establishing a business venture, it is necessary to identify the goals of such a business. (a) Sometimes true (b) False (c) Always true (d) One cannot be sure
3. Who among the following should be the one to identify the business goals? The ____ (a) receptionist (b) secretary (c) manager (d) entrepreneur
4. The following explain the acronym SWOT analysis except: (a) objectives (b) threat (c) strengths (d) weakness
5. Insufficient capital and poor customer service can be regarded as ____ to a business. (a) threats (b) weaknesses (c) opportunities (d) strengths

Theory

1. What is a business goal?
2. Give the acronym of SWOT.
3. What is a SWOT analysis?