What is a SWOT analysis?

A SWOT analysis is a strategic planning tool that helps organizations evaluate their internal strengths and weaknesses, along with external opportunities and threats. This comprehensive framework enables teams to identify what they do well and where they may need improvement while also considering the external factors that could impact their success.

By assessing strengths, organizations can leverage these advantages to capitalize on opportunities in the market. Meanwhile, understanding weaknesses allows them to make informed decisions about areas needing enhancement or potential risks that could impede progress. Additionally, recognizing external threats helps in developing strategies to mitigate risks posed by competitors, market changes, or other factors outside the organization.

Other options, while related to business management, do not encompass the broad and structured approach of a SWOT analysis. A financial forecasting method would typically focus on predicting future financial performance rather than evaluating strategic position. A performance review system assesses individual employee performance, which is a more focused evaluation. A risk assessment framework identifies and manages risks but does not provide the holistic view of both internal and external factors that a SWOT analysis does.