A SWOT Analysis is a strategic planning tool commonly used to complete an objective evaluation of a firm's business. This evaluation and subsequent analysis addresses for critical areas:
- Strengths - positive qualities of the business that may serve as a competitive advantage
- Weakness - negative qualities of the business that may serve as liabilities
- Opportunities - circumstances that may positively affect the firm if taken advantage of
- Threats - circumstances that may negatively affect the firm if ignored
In addition to taking an internal look at the company (strengths and weaknesses), companies also need to scan the external environment to identify both opportunities and threats. In this video, you'll learn more about the SWOT Analysis and the various qualities that may constitute strengths, weaknesses, opportunities, and threats.