Definition of SWOT Analysis:
A scan of the internal and external environment is an important part of the strategic planning process. Environmental factors internal to the firm usually can be classified as strength (S) or weaknesses (W), and that external to the firm can be classified as opportunity (O) or threats (T). Such an analysis of the strategic environment is referred to as a SWOT analysis.
The SWOT analysis provides information that is helpful in matching the firm’s resources and a capability to the competitive environment in which it operates. As such, it is instrumental in strategy formulation and selection.