What is the purpose of a SWOT analysis?

A SWOT analysis is designed to systematically evaluate an organization's internal and external environments by identifying its Strengths, Weaknesses, Opportunities, and Threats. This analytical framework helps managers and decision-makers understand the factors that can affect the success of a project or business strategy.

By outlining strengths, organizations can leverage these to capitalize on opportunities or counteract threats. Similarly, recognizing weaknesses helps organizations address internal challenges that could inhibit growth or performance. Opportunities signify external conditions that the organization can exploit for growth, while threats are external challenges that could pose risks. This multifaceted view enables informed strategic decisions, aligning resources and capabilities with market realities.

The other options focus on specific aspects of business analysis but do not encapsulate the comprehensive approach of a SWOT analysis. For example, determining market conditions or analyzing competitor strategies are narrower in scope and do not provide the holistic insights that a SWOT analysis offers. Evaluating financial performance, while critical, does not engage with the broader strategic considerations of both internal and external factors that influence an organization's success.