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SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. Strengths and weaknesses are internal factors and opportunities and threats are external factors. You usually want to use a SWOT diagram to analyze a project or business venture by focusing on each of these factors and writing down your findings in four boxes arranged in a single diagram.
SWOT diagrams can be especially useful when trying to decide whether or not to embark on a certain venture by determining if the pros outweigh the cons. By clearly outlining all positives and negatives concerning the project, it will be easier to decide whether or not it is really worth it.