What is the purpose of SWOT analysis?

The purpose of SWOT analysis is to identify strengths, weaknesses, opportunities, and threats related to an organization or a project. This strategic planning tool helps businesses and individuals understand internal factors (strengths and weaknesses) as well as external factors (opportunities and threats) that could influence success. By conducting a SWOT analysis, organizations gain insights into their current position and the environment in which they operate, enabling them to formulate informed strategies for improvement and growth.

Strengths allow a business to identify and leverage its competitive advantages, while weaknesses highlight areas that require attention or improvement. Opportunities present potential avenues for growth, innovation, or market expansion, whereas threats represent external challenges that could jeopardize the organization’s performance. This comprehensive overview helps in strategic decision-making and aligning resources effectively to achieve objectives.

Other options such as calculating financial returns, evaluating employee performance, or establishing sales targets do not encapsulate the broader strategic purpose of SWOT analysis, which goes beyond mere financial metrics or performance evaluations. These activities can be informed by the outcomes of a SWOT analysis but do not represent its primary aim.