Which of the following best describes SWOT analysis?

The best description of SWOT analysis is that it is a tool for identifying strengths, weaknesses, opportunities, and threats. This framework is widely used in strategic planning to help organizations understand their internal factors—strengths and weaknesses—and their external factors—opportunities and threats. By categorizing these elements, businesses can better formulate strategies that leverage their strengths, address their weaknesses, capitalize on opportunities, and mitigate external threats.

SWOT analysis is not limited to performance evaluation or confined to financial assessment; instead, it encompasses a broader perspective that considers various aspects of an organization, making it an invaluable tool for comprehensive strategic planning. Lastly, while it can be a component of long-term planning, it is not exclusively a long-term strategy in itself. It serves as a foundational analysis that can influence both short-term and long-term decision-making processes.