Which of the following includes both an opportunity and a threat from a SWOT analysis?
(A) Low interest rates and high gearing
(B) Loyal employees and outdated technology
(C) Excellent management and strong competition
(D) Strong economic growth and increased tax rates - HSC - SSCE Business Studies - Question 7 - 2013 - Paper 1
Question 7
Which of the following includes both an opportunity and a threat from a SWOT analysis?
(A) Low interest rates and high gearing
(B) Loyal employees and outdated tech... show full transcript
Worked Solution & Example Answer:Which of the following includes both an opportunity and a threat from a SWOT analysis?
(A) Low interest rates and high gearing
(B) Loyal employees and outdated technology
(C) Excellent management and strong competition
(D) Strong economic growth and increased tax rates - HSC - SSCE Business Studies - Question 7 - 2013 - Paper 1
Step 1
Identify the opportunity and threat in SWOT analysis
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Answer
In a SWOT analysis, opportunities are external factors that can be used to the advantage of a business, while threats are external challenges that can hinder its performance.
To address the question effectively, we need to evaluate the options provided based on their potential to represent both an opportunity and a threat.
Step 2
Evaluate option (A): Low interest rates and high gearing
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Answer
Low interest rates can be seen as an opportunity because they reduce borrowing costs. However, high gearing (high levels of debt relative to equity) can pose a threat if interest rates were to increase.
Step 3
Evaluate option (B): Loyal employees and outdated technology
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Answer
Loyal employees are typically an asset (opportunity), but outdated technology can be a significant threat due to inefficiencies and falling behind competitors.
Step 4
Evaluate option (C): Excellent management and strong competition
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Answer
Excellent management is an opportunity that enhances business performance, while strong competition represents a threat as it can limit market share.
Step 5
Evaluate option (D): Strong economic growth and increased tax rates
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Answer
Strong economic growth offers numerous opportunities for expansion and increased profits, while increased tax rates represent a threat as they can reduce profitability.
Step 6
Conclusion
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Answer
Considering the evaluations, option (D) "Strong economic growth and increased tax rates" is the correct answer as it simultaneously presents an opportunity (economic growth) and a threat (increased tax rates) in the context of SWOT analysis.
