SWOT analysis is a structured and planned method that is used to evaluate the strengths, weaknesses, opportunities, and threats of any business or venture. This analysis can be carried out not just by any business – it can also be carried out by any industry, product, place, or person. The tool collects the information from an environmental analysis and divides it into two categories – 1) internal, comprising of strengths and weaknesses, and 2) external, comprising of opportunities and threats. Once, these factors are analysed, SWOT analysis determines what are the factors and components that are necessary for the fulfilment of the objectives, and the obstacles that have to be overcome, neutralized, or minimized. While strengths and weaknesses are internal factors, opportunities and threats are usually external factors.
SWOT analysis is a very renowned and dependable tool for audit and analysis of the overall position of the business and the environment. The main idea in conducting such a study is identify a plan of action that will help the business to determine its resources and capabilities vis-a-vis the requirements of the environment in which the business operates. It views and analyses all positive and negative factors inside and outside