What is a SWOT analysis?

• A. A SWOT analysis evaluates strengths, weaknesses, opportunities, and threats
• B. A SWOT analysis is a method for forecasting monthly sales
• C. A SWOT analysis only examines internal capabilities
• D. A SWOT analysis is primarily a financial audit

Answer: (A)

A SWOT analysis is a strategic planning tool used to assess internal strengths and weaknesses and external opportunities and threats. It provides a structured way to look at what the organization does well, where it could improve, what favorable conditions exist, and what external challenges might hinder goals. This holistic view helps teams set priorities, allocate resources wisely, and craft strategies that leverage strengths and opportunities while addressing weaknesses and mitigating threats. The other descriptions miss the core purpose: forecasting monthly sales focuses on a specific metric, not a broad strategic assessment; looking only at internal capabilities ignores external factors that can impact success; and a financial audit is about verifying financial records, not analyzing strategic positioning.