What tool is used to evaluate strengths, weaknesses, opportunities, and threats affecting a business?

• A. SWOT Analysis
• B. PEST Analysis
• C. Root Cause Analysis
• D. Balance Scorecard

Answer: (A)

Assessing a business’s overall situation by examining internal capabilities and external conditions is done with a SWOT analysis. It looks at four components: strengths and weaknesses are internal factors the company can influence, such as resources, processes, and reputation; opportunities and threats are external factors like market trends, competitors, and regulatory changes. By organizing these areas, you can see how to leverage strengths to seize opportunities, address weaknesses to defend against threats, and decide where strategic actions are most needed.

Other tools don’t fit this exact purpose: PEST analysis focuses on broad external factors (Political, Economic, Social, Technological) and doesn’t assess internal capabilities. Root cause analysis digs into the origins of a problem rather than mapping the whole strategic situation. The Balanced Scorecard centers on translating strategy into performance metrics across perspectives, not on listing internal and external factors for strategic planning.