What is the purpose of a SWOT analysis?

The purpose of a SWOT analysis is to evaluate an organization's strengths and weaknesses, as well as its opportunities and threats. This strategic planning tool helps businesses gain a better understanding of their internal capabilities and external market conditions. By identifying strengths, a company can leverage these to improve its competitive position, while recognizing weaknesses allows it to pinpoint areas needing improvement.

Opportunities highlight potential market advantages or advancements that the organization can seize, while threats illustrate external challenges that could hinder performance. The comprehensive nature of a SWOT analysis provides valuable insights that can inform strategic planning and decision-making, making it an essential tool for organizations seeking growth and effectiveness. This focus on internal and external evaluation is what distinguishes a SWOT analysis from assessments related to political influences, market trends, or customer demographics.