Drill 27 ·
AP Business with Personal Finance: SWOT Analysis Drill 27 is a practice drill. It contains 5 original questions created by Brian Stewart, a Barron's test prep author with over 20 years of tutoring experience.
A competitive-analysis drill in which a juice bar sorts factors into a SWOT framework and reads what they imply; it uses an invented company and original figures.
Verriden Juice Bar is a single-location smoothie and cold-press juice shop. Before deciding whether to expand, the owner lists four factors that affect the business and begins sorting them into a SWOT analysis. In SWOT, Strengths and Weaknesses are internal to the firm, while Opportunities and Threats come from outside the firm.
Verriden Juice Bar: Factors to Classify
| Factor | Description | Internal or external? |
|---|---|---|
| 1. Strong repeat-customer base | A base of regular buyers the shop has built up over time | Internal |
| 2. Only one blender station | Limits how fast the shop can serve at peak times | Internal |
| 3. New gym opening next door | Could bring in health-focused foot traffic | External |
| 4. A national juice chain entering the city | A larger rival may open nearby | External |
Question 1. Q1. According to the table, how many of the four factors are internal to the firm?
Explanation: The answer is C (two). The table marks Factor 1 (the repeat-customer base) and Factor 2 (one blender station) as internal, which is two factors. A and B undercount, and D would mean all four are internal, but Factors 3 and 4 are marked external.
Question 2. Q2. In a SWOT analysis, Factor 1, the strong repeat-customer base, belongs in which quadrant?
Explanation: The answer is B (Strength). A strong repeat-customer base is an internal, favorable attribute of the firm, which is the definition of a Strength. A is wrong because an Opportunity is external; the customer base the shop has built is internal to the business. C and D are unfavorable categories, but a strong repeat-customer base is favorable, not a Threat or a Weakness.
Question 3. Q3. Factor 2, having only one blender station that slows service at peak times, belongs in which SWOT quadrant?
Explanation: The answer is D (Weakness). The single blender station is internal to the firm and works against it by limiting service speed, which makes it a Weakness. A is wrong because the factor hurts rather than helps the business. B and C are external categories, but the bottleneck is something inside the firm's own operation, not an outside condition.
Question 4. Q4. Why is Factor 4, the national juice chain entering the city, classified as a Threat rather than a Weakness?
Explanation: The answer is A. A Threat is an external factor that could harm the firm, and a new rival entering the market is outside the firm and potentially damaging, so it is a Threat, not a Weakness. B is wrong because the rival is external, not internal, and internal harmful factors are Weaknesses, not Threats. C is wrong because the chain does not help Verriden and helpful factors are not Threats. D confuses two separate factors; the rival is a Threat on its own regardless of the blender station.
Question 5. Q5. Taken together, the SWOT picture shows a repeat-customer Strength and a new-gym Opportunity alongside the rival-chain Threat. Which action does this picture best support?
Explanation: The answer is C. A SWOT analysis is used to build on Strengths and Opportunities to counter Threats, so leaning on the repeat-customer base and the new gym's foot traffic to compete with the incoming chain is the supported move. A ignores a real Opportunity. B misclassifies the customer base, which is a Strength, not a Weakness. D is an overreaction unsupported by the analysis, which shows clear advantages the shop can use.