What does a SWOT analysis help identify?

A SWOT analysis is a strategic planning tool that helps organizations understand their internal and external environments by identifying Strengths, Weaknesses, Opportunities, and Threats. This framework allows analysts and decision-makers to evaluate both internal factors (the organization’s strengths and weaknesses) and external factors (market opportunities and potential threats) that can affect the organization’s success.

By clearly categorizing and assessing these four elements, a SWOT analysis enables companies to leverage their strengths, address weaknesses, capitalize on opportunities, and mitigate threats. This comprehensive understanding is essential for formulating strategic plans and making informed decisions.

The other options focus on specific aspects of business analysis that do not encompass the broader scope of the SWOT analysis itself. While future market trends and sales forecasts can be informed by insights gained from a SWOT analysis, they do not capture the full essence of what SWOT itself aims to achieve. Financial risks, while important, represent only a fraction of what a SWOT analysis assesses, which includes a wider scope of organizational health and market position.