What is a reason for conducting a SWOT analysis?

Conducting a SWOT analysis is a strategic planning tool that assists organizations in identifying their internal Strengths and Weaknesses, as well as external Opportunities and Threats. The primary reason for performing a SWOT analysis is to compare the organization's current position within its market and environment. This comparison facilitates informed decision-making by presenting a clear overview of where the organization stands and what external factors could impact its future.

By understanding the strengths, organizations can leverage them to exploit opportunities or defend against threats. Recognizing weaknesses allows for the identification of areas needing improvement or potential risks that could affect performance. Ultimately, the insights gained from a SWOT analysis empower managers to make strategic decisions that align with the organization's goals and resources, enhancing its competitiveness and potential for success.

In contrast, while ensuring compliance with laws, forecasting financial performance, and evaluating employee satisfaction are important aspects of overall business management, they do not encapsulate the primary purpose of conducting a SWOT analysis, which focuses predominantly on strategic positioning and decision-making.