What is SWOT analysis and what is its purpose?

• A. It assesses only internal capabilities to guide staffing.
• B. It analyzes strengths, weaknesses, opportunities, and threats to inform strategy.
• C. It is a financial ratio tool for budgeting.
• D. It measures customer satisfaction across channels.

Answer: (B)

SWOT analysis is a framework for evaluating internal strengths and weaknesses alongside external opportunities and threats, with the goal of guiding strategic choices. By listing what the organization does well, where it could improve, what market chances exist, and what external challenges could block progress, you get a clear picture of where to focus efforts and how to allocate resources. This helps shape decisions about entering new markets, launching or adjusting products, and prioritizing improvements in a way that leverages strengths while addressing gaps and risks. It isn’t just about staffing or budgeting, and it isn’t a measure of customer satisfaction; it’s a broad tool that ties what you can do internally to what’s happening outside, to inform strategy.