What does a SWOT analysis identify?

A SWOT analysis is a strategic tool that identifies an organization’s internal strengths and weaknesses, as well as external opportunities and threats. This framework is important for business planning and decision-making because it allows organizations to take stock of their current situation and formulate strategies that leverage their strengths and opportunities while addressing weaknesses and threats.

Strengths refer to what the organization does well or what sets it apart from competitors, such as unique resources or capabilities. Weaknesses are areas where the organization struggles or lacks resources. Opportunities are favorable factors or trends in the environment that the organization can exploit, while threats are challenges that could hinder its performance, such as competitive pressures or economic downturns.

By understanding these four components, organizations can better navigate their strategic landscape and pursue growth and improvement effectively.