A small café is struggling to attract new customers in a competitive market. The owner decides to conduct a SWOT analysis to identify areas for improvement. Which of the following scenarios exemplifies the most effective use of the SWOT analysis in this context?

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The owner lists their café's location as a weakness and decides to move to a more populated area without considering other factors.

The owner identifies high-quality ingredients as a strength, recognizes the growing trend of organic food as an opportunity, but fails to address their limited social media presence as a threat.

The owner assesses their strengths and weaknesses, such as unique recipes and limited marketing, while also exploring opportunities like community events and threats like nearby competition.

The owner focuses solely on external threats and opportunities, ignoring internal strengths and weaknesses which limits their strategic planning.

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Answer

The owner first lists what the café does well, such as its friendly staff and a cozy seating area, and notes weaknesses like a small menu and slow service during rush hours. She then identifies opportunities such as partnering with local farms for fresh ingredients and threats such as a new specialty coffee shop opening nearby. Using this information she decides to add a signature latte, extend lunch hours, and run a “farm‑to‑table” promotion. By turning the SWOT findings into concrete actions—like a loyalty card and a social‑media campaign—she attracts more customers and improves her competitive edge. This example shows the SWOT analysis driving real, targeted improvements.

Detailed Explanation

The owner looks at what the café does well, what it lacks, what outside chances exist, and what outside dangers loom. Other options are incorrect because The owner focuses only on the café’s location and thinks moving will solve everything; The owner notes good ingredients and an organic food trend but overlooks its weak social media.

Key Concepts

SWOT Analysis

Strategic Planning

Market Analysis

Topic

SWOT Analysis

Difficulty

medium level question

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understand

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Question 1

A small coffee shop is struggling to attract more customers in a competitive neighborhood. The owner decides to analyze their strengths, weaknesses, opportunities, and threats (SWOT) to develop a business strategy. Which aspect of their SWOT analysis should they prioritize to improve their competitive advantage?

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Question 2

A small retail company is facing declining sales and is unsure about the reasons behind it. They decide to conduct a SWOT analysis to evaluate their current position. Which of the following best describes how they should utilize the SWOT analysis to improve their business strategy?

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Question 3