What type of analysis can be used to understand both internal and external factors affecting a company?

SWOT analysis is a comprehensive tool used to evaluate both internal and external factors that can impact a company's performance. The acronym SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.

The internal factors, namely strengths and weaknesses, allow a company to assess its own resources and capabilities—understanding what it does well and where it can improve. This helps in identifying competitive advantages and areas in need of enhancement.

On the other hand, external factors are captured through opportunities and threats. Opportunities refer to favorable conditions in the market or industry that a company can leverage for growth, while threats signify external challenges or obstacles that could hinder success.

This dual focus creates a holistic view that is crucial for strategic planning, enabling organizations to align their internal capabilities with external market conditions effectively. Other analyses, such as financial, market, or competitor analysis, tend to focus more narrowly on specific aspects and may not provide the intersection of both internal and external evaluations that SWOT analysis uniquely offers.