What does a SWOT analysis evaluate?

A SWOT analysis evaluates a business or project by examining four key aspects: Strengths, Weaknesses, Opportunities, and Threats. This framework helps organizations identify internal factors, such as strengths and weaknesses, which relate to resources, capabilities, and areas for improvement. It also considers external factors like opportunities and threats, providing insight into the business environment and external challenges that could impact success.

By understanding strengths, companies can leverage them to gain competitive advantages. Recognizing weaknesses allows businesses to address vulnerabilities before they become significant issues. Opportunities highlight potential areas for growth or innovation, while threats draw attention to obstacles and risks that may hinder progress.

This comprehensive assessment is crucial for strategic planning and decision-making, allowing organizations to develop informed strategies that build on their strengths and capitalize on opportunities while mitigating potential risks. Other options provided do not accurately define the components of SWOT analysis, focusing instead on different aspects or unrelated terminology, which do not align with the established framework.