SWOT is generally a marketing term. SWOT analysis refers to the evaluation of strength and weakness within an organization and opportunities and threats present in external environment. This kind of analysis can also help a person in improving his/her personality, level of thinking, and way of living, as it does for business development.
Recognizing one’s strength helps to set the path and processes for achieving goals, maximizing profits. In similar way by identifying one’s weakness, negative effects to the goals can be determined and thus the losses can be minimized. A proper diagnosis of internal strength and weakness helps in the proper allocation of the resources according to the objective of either maximizing profit or minimizing losses.
Analysis of changes in external environment is necessary for survival as well as development of oneself. In case of business management an organization undergoes to structural changes according to market, economic, social factors like customers, political setups etc and competition with other organizations. Competition may be a threat or opportunity. It may create new identities, new product, and chances to improve performance or may require to find an alternate solution.