What is the purpose of a SWOT analysis?

A SWOT analysis serves as a strategic planning tool used to evaluate a company's internal and external environment by examining its Strengths, Weaknesses, Opportunities, and Threats. This comprehensive evaluation allows organizations to understand their current position in the market and make informed decisions regarding future strategies.

The Strengths and Weaknesses components focus on internal factors, such as resources, capabilities, and processes, that influence a company's performance. In contrast, Opportunities and Threats encompass external factors, including market trends, competition, and regulatory changes. By systematically analyzing these four elements, businesses can identify potential areas for growth, understand challenges they may face, and develop strategies that leverage their strengths while addressing weaknesses.

In contrast, eliminating competition, analyzing product features only, or solely measuring customer satisfaction do not encompass the broader strategic assessment that a SWOT analysis provides. The holistic nature of a SWOT analysis makes it invaluable for strategic planning and decision-making in any organization.