What does a SWOT analysis evaluate in a business context?

A SWOT analysis is a strategic planning tool used to evaluate a business's internal strengths and weaknesses, as well as external opportunities and threats. The rationale behind this comprehensive evaluation is to provide a clear picture of where the business stands in relation to its environment and its own capabilities.

Internal strengths are aspects of a business that are advantageous to achieving its objectives, such as skilled personnel, efficient processes, or strong brand recognition. Internal weaknesses, on the other hand, are factors that may hinder the organization's progress, such as lack of expertise, inadequate resources, or poor market reputation.

Externally, opportunities refer to favorable conditions in the market that the business can exploit to enhance its performance or growth. These might include emerging markets, technological advancements, or changes in consumer behavior that align with the business's offerings. Threats involve potential challenges that could negatively impact the business, such as increased competition, regulatory changes, or economic downturns.

By integrating both internal and external factors, a SWOT analysis provides a holistic view that can guide decision-making and strategic planning. This multi-faceted approach is essential for developing strategies that leverage strengths, address weaknesses, capitalize on opportunities, and mitigate threats.

The other options focus on limited aspects of the SWOT analysis—such as only strengths