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The internal strengths and weaknesses, and the external opportunities and threats are
analysed and used to evaluate the Utopia business model. A summary SWOT is provided in
Table 1 below, and each point should then be comprehensively explained by the student.
Strengths: Weaknesses:
Established and profitable business Finance. The business will only consider internal
operation. sources of finance to pursue growth
Finance. Strong balance sheet with low opportunities.
levels of debt. Relatively undiversified with just two revenue
Established brand. streams.
Differentiated product. Marketing. Utopia’s reliance on word-of-mouth
Customers are mostly wealthy and advertising limits its promotional opportunities
relatively insensitive to price. and reduces sales revenues.
Relatively high gross profit margins. Management. The paternalistic style of John’s
The location of Utopia. leadership has resulted in businesses that are
Privately held company. family-run and this means that they are unlikely
Low cost of local labour. to have the skills of qualified and professional
Effective supply chains sourcing fresh local managers.
produce.
Threats:
Opportunities:
Increase prices as wealthy customers may Natural disasters such as hurricanes and tsunamis
be relatively insensitive to higher prices. can quickly destroy Utopia’s own infrastructure
Expand the number of villas to cater for as well as the supporting infrastructure on Ratu
higher numbers of guests. (e.g., roads) and neighbouring islands (e.g.,
Pursue additional revenue streams – airports and ports) that tourists are reliant on to
souvenirs. reach Utopia.
Pursue additional revenue streams – Other threats from nature such as mosquito
selling Aora coffee beans in New Zealand. borne diseases (dengue fever and Zika virus) or
an influx of jellyfish.
IB Business Management – Pre-Released Case Study May 2017
Utopia SWOT Analysis
Pursue additional revenue streams – Sea level rises and an increase in the number
develop additional tours and activities for and size of storm surges.
guests (e.g., weddings). Increased competition from a new resort on
Pursue additional revenue streams – Ratu or nearby islands.
develop a new resort in a new location on Poor word-of-mouth promotion from guests (e.g.,
Ratu or other Pacific Island. a shark attack or bout of food poisoning
Improving internet infrastructure will amongst guests).
enable better and faster communication Supply chains. The café (and potential
and allow Utopia to establish an effective wholesale operation) is reliant on a single
social media presence. supplier of coffee beans.
Develop a promotional campaign to Coffee is a commodity, and thus subject to high
target potential customers instead of levels of price volatility.
relying on word-of-mouth promotion.
Source: www.BusinessManagementIB.com