What is a SWOT analysis used for?

A SWOT analysis is a strategic planning tool that helps organizations identify and understand their internal strengths and weaknesses, as well as external opportunities and threats in their operating environment. By documenting these factors, businesses can develop strategies that leverage their strengths, address their weaknesses, capitalize on opportunities, and mitigate threats. This comprehensive overview allows decision-makers to make informed choices about the direction of the organization and its strategic initiatives.

In contrast, assessing employee performance focuses specifically on evaluating individual contributions and effectiveness within the organization, which does not align with the broader strategic context of a SWOT analysis. Evaluating customer satisfaction rates is a specialized process aimed at understanding the experiences and satisfaction levels of customers, and while this can inform strategic decisions, it is not a core function of a SWOT analysis. Analyzing financial statements involves a review of the financial health of the organization, which, while important, is a financial analytics task rather than a strategic environmental assessment like a SWOT analysis.