What does a SWOT analysis evaluate?

A SWOT analysis evaluates four critical aspects of a business's environment: strengths, weaknesses, opportunities, and threats. This strategic planning tool helps organizations understand their internal capabilities (strengths and weaknesses) and external factors (opportunities and threats) that can impact their success.

By identifying strengths, a business can leverage these assets to gain a competitive advantage. Recognizing weaknesses allows the organization to address areas that need improvement. Opportunities help the business identify potential areas for growth, while awareness of threats enables it to develop strategies to mitigate risks.

In contrast, evaluating financial success, sales strategies, or market penetration and pricing focuses on specific operational or financial metrics rather than the broader strategic perspective that SWOT analysis provides. Therefore, the correct option encapsulates the comprehensive nature of a SWOT analysis in assessing both internal and external factors influencing a business.