Stukent Social Media Marketing Certification Practice Test

What tool do companies often use to assess themselves and their competitors?

1. Pest analysis

2. Porter's Five Forces

3. SWOT analysis

4. Market segmentation analysis

The correct answer is: SWOT analysis

SWOT analysis is a strategic tool that companies use to evaluate their internal strengths and weaknesses alongside external opportunities and threats. This comprehensive approach enables organizations to gain insights into both their own performance and how they compare to their competitors. By identifying strengths, a company can leverage these to capitalize on market opportunities effectively, while recognizing weaknesses allows for strategic adjustments to mitigate potential risks. In the context of assessing competitors, SWOT analysis helps companies understand not only their own positioning but also where their rivals stand in these four categories. This makes it easier to formulate strategies that can capitalize on competitive advantages or counter perceived threats in the marketplace. The other tools listed serve different purposes; for example, PEST analysis focuses on external factors affecting the business environment, Porter's Five Forces analyzes industry dynamics and competitive intensity, and market segmentation analysis works on identifying specific customer groups. While all these tools can be beneficial in strategic planning, SWOT analysis provides a more direct framework for self-assessment relative to competitors.