What is a SWOT analysis?

A SWOT analysis is a strategic planning tool that helps organizations assess their internal and external environments by evaluating their Strengths, Weaknesses, Opportunities, and Threats.

By identifying Strengths, an organization can leverage its core competencies and advantages in the market. Weaknesses point out areas where the organization may be lacking or at a disadvantage, providing insights into what needs improvement. Opportunities highlight external factors that the organization can exploit for growth or competitive advantage, while Threats represent external challenges that could impact the organization negatively.

This holistic assessment allows businesses to craft strategies that align with their internal capabilities and external market conditions. Through a clear understanding of these four components, organizations can make informed decisions regarding strategic initiatives and resource allocation, ultimately guiding them toward achieving their objectives.

The other options do not encapsulate the full breadth and purpose of a SWOT analysis. Identifying customer preferences, analyzing market trends, and competitive pricing frameworks are all important aspects of strategic management, but they do not provide the comprehensive analysis that a SWOT framework offers regarding an organization’s overall strategic position.