In developing a successful business strategy, organizations must assess their internal strengths and weaknesses alongside external opportunities and threats, a process known as __________.

The process is called a SWOT analysis, which stands for Strengths, Weaknesses, Opportunities, and Threats. By looking inside the company, you find what it does well and what it needs to improve. Then you look outside to see what chances exist for growth and what dangers might come. Putting all four parts together helps a business decide where to focus its efforts. For example, a small bakery might note its strong local reputation (strength), limited kitchen space (weakness), rising interest in healthy baked goods (opportunity), and new competitors nearby (threat).