Professional in Human Resources (PHR) Practice Exam

The term that refers to the evaluation of an organization's strengths and weaknesses, as well as external opportunities and threats, is SWOT analysis. This tool is widely used in strategic planning and provides a comprehensive overview of internal and external factors that can impact an organization's success.

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. By identifying strengths and weaknesses, organizations can assess their current capabilities and limitations. Opportunities and threats focus on external factors that could influence the organization’s strategic direction, such as market trends, competition, and economic conditions.

In contrast, market analysis specifically focuses on understanding market dynamics and consumer behavior but does not typically analyze internal strengths and weaknesses. PEST analysis examines Political, Economic, Social, and Technological factors that could influence an organization but does not provide a comprehensive evaluation of internal capabilities. Financial analysis primarily focuses on financial data and metrics to understand an organization’s monetary health rather than a holistic evaluation of its strategic position.

Thus, the correct answer is firmly supported by the definition and scope of SWOT analysis as a strategic planning tool.