What best describes SWOT when applied to formulating strategy?

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Question: What best describes SWOT when applied to formulating strategy?

Option 1: An effective approach is to immediately list all of a company’s strengths, weaknesses, opportunities, and threats

Here, the claim suggests a one-shot, front-loaded listing without integration. In practice, SWOT is used as a diagnostic tool that should feed into strategy, not just be dumped as a list at the start. The emphasis on immediate listing misses the strategic synthesis step where findings are translated into actionable options.

Option 2: Opportunities are matched with S, W, and T to formulate strategy

This option hints at using a matching process, which is closer to the idea of using SWOT to inform strategy via SO, WO, ST, and WT combinations. However, the wording is imprecise and implies that opportunities are paired with all elements (S, W, and T) in a simplistic way. The conventional approach is to pair opportunities with strengths (SO), address weaknesses with opportunities (WO), leverage strengths to counter threats (ST), and mitigate weaknesses to defend against threats (WT). The description here lacks that structured framework.

Option 3: Capabilities are always strengths and never weaknesses

This is incorrect. Capabilities can be strengths when the organization possesses them; but they can also be weaknesses if absent or deficient. Treating capabilities as always strengths ignores gaps and competitive disadvantages, leading to an incomplete strategic picture.

Option 4: SWOT should be repeatedly examined before making strategic recommendations

This statement captures the dynamic, iterative nature of strategic planning. As internal and external conditions change, reassessing strengths, weaknesses, opportunities, and threats helps keep strategy relevant and responsive. It emphasizes ongoing learning, validation of assumptions, and updating strategic choices as new information emerges.

BUSN 0302 Module 3 Knowledge Check

What best describes SWOT when applied to formulating strategy?

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