In what way does a SWOT analysis benefit a business?

• A. It simplifies budgeting processes
• B. It provides a competitive advantage
• C. It allows for the identification of internal and external factors affecting success
• D. It enhances employee morale

Answer: (C)

A SWOT analysis benefits a business primarily by allowing for the identification of internal and external factors that significantly affect its success. This analytical tool evaluates the Strengths and Weaknesses of the organization along with the Opportunities and Threats present in the environment. By understanding these dynamics, a business can strategically plan its initiatives, capitalizing on strengths and opportunities while addressing weaknesses and minimizing threats.

This process leads to more informed decision-making, enabling managers and leaders to adapt to changes in the market and better position the company for growth and sustainability. The insights gained through SWOT analysis foster a comprehensive understanding of the business landscape and can lead to a more effective strategic plan.

While other options touch on aspects that may contribute to the overall performance of a business, they do not capture the purposeful framework and depth of understanding that a SWOT analysis provides regarding internal and external influences on business success.