Which practice would be used to evaluate internal capabilities and external opportunities for growth?

• A. SWOT analysis
• B. Demand forecasting
• C. Break-even analysis
• D. Quality audit

Answer: (A)

Evaluating internal capabilities alongside external growth opportunities is best done with a SWOT analysis. This approach examines internal strengths and weaknesses as well as external opportunities and threats, giving a clear picture of what the organization can leverage and where it may need to improve to pursue growth. By layering internal factors with market conditions, SWOT helps identify strategic moves—using strengths to seize opportunities, while addressing weaknesses to mitigate threats.

Demand forecasting estimates future customer demand to guide inventory, staffing, and capacity planning, but it doesn’t map internal capabilities to external market factors. Break-even analysis looks at how much sales are needed to cover costs, informing pricing and profitability, not the broader internal-external landscape. A quality audit focuses on whether operations meet specified quality standards, concentrating on processes and compliance rather than market opportunities.