The SWOT analysis evaluates the internal Strenghts and Weaknesses, and external Oppurtunities and Threats involved in a project of business venture. It provides a clear and simplified picture of the factors that will create an advantage and disadvantage for the company in doing the project or business venture, and whether the advantages will overcome the disadvantages and vice versa.
Take Wal-Mart for example. The multinational retailer is initiating a business venture by entering South Africa through the acquisition of Massmart Holdings Inc.
http://www.theglobeandmail.com/globe-investor/wal-mart-takes-a-chance-on-africa/article1727253/
A SWOT analysis would help determine if this business venture will be profitable or not. As stated in the article a threat to Wal-Mart’s business venture would be the South African market in “recession and suffers from unemployment, crime and a highly unionized work force that has staged sometimes violent strikes.” However, the opportunities for Wal-Mart would be the fact that “South Africa possesses attractive market dynamics, favorable demographic trends and a growing economy.”
However, the SWOT is not only useful for companies and corporations. It can also be used by stockholders, and analysts in evaluating business ventures and projects being done by corporations, or any other decision-making situation where there is a clear desired outcome.
http://www.theglobeandmail.com/globe-investor/a-tough-quarter-even-for-wal-mart/article1136155/