What does a SWOT analysis help an organization identify?

A SWOT analysis is a strategic planning tool used by organizations to identify and assess internal and external factors that can impact their success. By breaking down the analysis into four components—Strengths, Weaknesses, Opportunities, and Threats—it allows organizations to clearly see their internal capabilities and limitations (Strengths and Weaknesses) and their external environment (Opportunities and Threats).

This holistic view enables leaders to make informed decisions about strategy, resources, and potential risks. For example, by recognizing internal strengths, an organization can leverage them to pursue opportunities effectively. Simultaneously, acknowledging weaknesses helps in addressing potential challenges. Understanding external opportunities and threats aids in strategic planning to capitalize on favorable trends or mitigate risks in the market.

While financial considerations, training needs, and market trends can be derived from a SWOT analysis, the primary function of the analysis is to summarize and synthesize the internal and external factors affecting the organization as a whole.