Which of the following best describes the purpose of a SWOT analysis?

• A. Market position and branding
• B. Capital structure
• C. Strengths, weaknesses, opportunities, and threats
• D. Employee satisfaction

Answer: (C)

SWOT analysis is a planning tool that organizes internal strengths and weaknesses alongside external opportunities and threats to guide strategic decisions. By laying out these four categories, you can see where to leverage advantages, address weaknesses, pursue promising opportunities, and defend against potential threats. For instance, a startup with a strong engineering team (strength) but limited funds (weakness) might look to secure partners (opportunity) to counter competition or regulatory changes (threat). This framing helps decide targeted actions to grow effectively.

Other topics like market position and branding, capital structure, or employee satisfaction are important in their own right, but they don’t embody the full purpose of SWOT, which is to systematically assess both internal and external factors to inform strategy.