What analysis helps in identifying a firm's strengths and weaknesses?

SWOT analysis is a strategic management tool that helps organizations identify their internal strengths and weaknesses, as well as external opportunities and threats. By assessing both the internal and external environments, firms can gain a comprehensive understanding of their strategic position.

When focusing specifically on strengths and weaknesses, the internal component of SWOT plays a crucial role. Strengths refer to the resources and capabilities that give a firm a competitive advantage, while weaknesses are areas where the firm may lack resources or capabilities, thus posing challenges to its performance.

Moreover, SWOT analysis incorporates insights from both qualitative and quantitative data, allowing firms to assess various internal factors like organizational culture, financial resources, operational efficiency, and human capital. This thorough evaluation supports better decision-making, resource allocation, and strategic planning, enabling firms to capitalize on their strengths and address their weaknesses effectively.

On the other hand, while Internal Factor Evaluation and External Audit also provide important insights, they do not encompass the broad, integrative perspective that SWOT analysis offers by explicitly linking internal strengths and weaknesses with external opportunities and threats. PEST analysis, which examines political, economic, social, and technological factors, focuses solely on external environments and does not directly address internal capabilities. Therefore, the comprehensive nature of SWOT analysis makes it the most suitable tool for