What is the purpose of conducting a SWOT analysis?

The purpose of conducting a SWOT analysis is to evaluate strengths, weaknesses, opportunities, and threats related to a business. This analytical tool provides a comprehensive overview of both internal and external factors that can impact an organization. By identifying strengths, organizations can leverage these advantages in their strategic planning. Understanding weaknesses allows a business to target areas for improvement. Opportunities highlight potential avenues for growth or development that the organization can exploit, while threats represent external challenges that could hinder success.

This holistic view that comes from a SWOT analysis equips managers and decision-makers with the insights needed for effective strategy development, making it a critical component in strategic planning processes rather than focusing solely on marketing strategies, employee performance, or increasing sales.