What is the purpose of a SWOT analysis?

The purpose of a SWOT analysis is to systematically evaluate an organization's internal strengths and weaknesses, as well as external opportunities and threats. This framework assists in strategic planning by offering insights into both the internal capabilities of the organization and the external environment in which it operates.

By identifying strengths, organizations can leverage these aspects to gain competitive advantages. Weaknesses highlight areas for improvement or potential vulnerabilities that need attention to ensure sustainability and growth. Opportunities refer to favorable situations in the market that could be exploited for growth or enhancement, while threats indicate external factors that could jeopardize the organization's success.

This holistic assessment allows businesses to make informed decisions that align with their capabilities and market conditions, thus enabling the formulation of strategies that capitalize on strengths and opportunities while mitigating weaknesses and threats.