SWOT analysis is used to inform strategy by evaluating strengths, weaknesses, opportunities, and threats. Which scenario best illustrates its use?

• A. Identifying a pricing strategy for existing products
• B. Identifying growth opportunities in new market segments
• C. Selecting a logo color
• D. Forecasting quarterly sales

Answer: (B)

SWOT analysis guides strategy by weighing internal strengths and weaknesses against external opportunities and threats. It helps you see how what you do well internally can be used to seize external chances and how to shore up or mitigate internal gaps to address external risks. Identifying growth opportunities in new market segments fits this approach because it requires evaluating external opportunities and determining whether your current capabilities support entering those markets, while also recognizing any weaknesses that could hinder expansion. This is a strategic use of SWOT—looking outward to decide where to grow and how to align resources with promising external conditions. Other options describe more tactical or non-strategic tasks—pricing existing products, choosing a branding detail, or simply forecasting sales—aren’t about using internal-external factor analysis to chart a new strategic direction.