What does SWOT analysis primarily evaluate?

SWOT analysis is a strategic planning tool that evaluates an organization's internal and external environments by identifying its Strengths, Weaknesses, Opportunities, and Threats.

Strengths refer to the internal characteristics that give the organization an advantage over competitors, such as unique resources or capabilities. Weaknesses highlight the internal factors that may hinder the organization from achieving its goals, which allows managers to identify areas for improvement. Opportunities focus on external factors that the organization can leverage to its advantage, such as emerging market trends or favorable regulations. Lastly, Threats encompass external challenges that could pose risks to the organization, such as competitive pressures or changing market conditions.

By analyzing these four dimensions, organizations can develop informed strategic decisions that capitalize on strengths, address weaknesses, seize opportunities, and mitigate threats. This comprehensive evaluation is essential for effective strategic management and ultimately contributes to successful organizational performance.