Which term is used to describe the potential for gaining an advantage in business through recognizing both strengths and threats?

The term that describes the potential for gaining an advantage in business by recognizing both strengths and threats is known as SWOT analysis. This analytical framework helps organizations identify their internal strengths and weaknesses, in addition to external opportunities and threats within the marketplace.

By conducting a SWOT analysis, a business can develop strategies that harness its strengths to capitalize on opportunities while addressing weaknesses and mitigating threats. This comprehensive understanding allows firms to make informed decisions that strategically position them for success in a competitive environment. For example, if a company identifies a strength in a unique product feature and an external threat in increasing market competition, they can strategize to enhance their marketing focusing on that unique feature.

The other terms listed do not encompass the full analysis and strategic implications that accompany recognizing strengths and threats. Resource allocation pertains to distributing resources efficiently within the organization. Business strategy refers to the overarching plan to achieve business objectives but does not specifically focus on the internal and external factors. Market research involves gathering information about consumer needs and preferences but does not explicitly categorize internal strengths and external threats as SWOT analysis does.