How is a SWOT analysis commonly used in business analysis?

A SWOT analysis, which stands for Strengths, Weaknesses, Opportunities, and Threats, is primarily utilized in business analysis for strategic planning and evaluation. This tool helps organizations assess both internal and external factors that can affect their success.

By identifying strengths and weaknesses, an organization can evaluate its current position and resources, which is essential for informed decision-making. Meanwhile, recognizing opportunities and threats allows businesses to understand the external environment, including market dynamics and competitive pressures. This comprehensive perspective aids in formulating strategies that capitalize on strengths and opportunities while mitigating weaknesses and threats.

In contrast, other options such as financial forecasting, technical documentation, and marketing analysis serve different purposes. Financial forecasting focuses specifically on predicting future financial outcomes, technical documentation pertains to the creation of materials that describe the specifications and standards of a product or service, and marketing analysis usually involves studying customer behavior and market trends to inform marketing strategies. These activities may involve some level of situational assessment, but they do not encapsulate the broad strategic evaluation framework that a SWOT analysis provides.