An analysis of strengths, weaknesses, opportunities, and threats—or SWOT analysis—is a business management tool that managers use to evaluate a project, new product, or other business endeavor, and make well-informed decisions regarding such business endeavors. More specifically, a SWOT analysis forces a manager to evaluate his or her organization’s internal strengths and weaknesses against other competitors in the marketplace. In addition, the manager must analyze the potential impact of external forces—known as opportunities and threats—on the endeavor.
The goal of a business is to maximize shareholder value. Businesses maximize shareholder value by maximizing profits and minimizing expenses. In the litigation context, generally a party is seeking a remedy for a perceived wrong. The parties may be businesses, business owners, partners, employees, financiers, suppliers, customers, competitors, or other stakeholders. A SWOT analysis can be used to assess the potential costs and benefits of a legal course of action or settlement in the context of the relationship between the parties. Each element of the SWOT analysis must be applied with the goal of maximizing the client’s stakeholder value.