The opportunity and threat analysis, also referred to as environmental analysis, is a strategic planning method for identifying and analyzing external opportunities to improve an organization’s performance as well as external risks to the organization’s success. It is part of the SWOT analysis which is commonly used to evaluate the strengths, weaknesses, opportunities, and threats of an organization or project. In addition to strategic planning, the opportunity and threat analysis can also be used for quality development, marketing purposes, location analysis, as well as in product politics.
External factors analyzed may include macroeconomic, technological, political, and socio-cultural change as well as changes in the marketplace or competitive position. The opportunity and threat analysis can be applied to a wide variety of aspects of an organization, including financial, personnel, technology, and products. The method helps organizations to minimize threats and take the greatest possible advantage of opportunities available to them which can result in competitive edges.
See also: SWOT analysis