What does SWOT analysis identify?

SWOT analysis is a strategic planning tool that helps organizations identify their internal strengths and weaknesses, as well as external opportunities and threats. This framework is particularly valuable because it allows businesses to gain a comprehensive understanding of both their internal capabilities and external environment.

By recognizing strengths, companies can leverage these advantages to enhance their competitive position. Identifying weaknesses helps organizations to address areas needing improvement. Opportunities present potential avenues for growth or expansion, while threats highlight challenges that could jeopardize the company's success.

In contrast, the other options focus on specific aspects of market and customer dynamics. Market trends and demands address the broader environmental context without the introspection of internal capabilities. Customer preferences and behaviors consider consumer insights, which are valuable but do not encompass the full scope of organizational analysis that SWOT provides. Financial risks and rewards focus on monetary aspects without considering the holistic view of internal and external forces that affect overall business strategy.