How can a company effectively use its SWOT analysis to formulate a competitive business strategy?

A SWOT analysis shows what a company does well and where it can improve, while also pointing out market chances and dangers. By matching its strong points with external opportunities, a firm can decide which markets to enter or which products to boost. At the same time it must use its weaknesses as a warning to avoid threats that could hurt the business. For instance, a local bakery that sees strong brand loyalty (strength) and a growing demand for gluten‑free pastries (opportunity) can launch a gluten‑free line, while staying alert to rising ingredient costs (threat) that might erode profits. This balanced approach turns SWOT data into a clear plan that leverages strengths, tackles weaknesses, capitalizes on opportunities, and guards against threats.