What does a SWOT analysis evaluate?

A SWOT analysis evaluates an organization's internal strengths and weaknesses, alongside external opportunities and threats. This framework allows businesses to assess their current situation and develop strategies to improve performance.

Strengths refer to internal attributes and resources that give a company an advantage over competitors, such as skilled labor, strong brand reputation, or superior technology. Weaknesses are areas where the organization lacks capabilities or resources compared to competitors, which could hinder its progress. Opportunities encompass external factors that the business could exploit to its advantage, such as emerging markets or technological advancements. Threats are external challenges that could negatively impact the organization, like increased competition or changes in regulations.

Understanding these four elements provides valuable insights that can guide strategic planning, decision-making, and resource allocation to enhance business performance.