Which statement best describes a threat in SWOT analysis?

Which statement best describes a threat in SWOT analysis?

• A. A downturn in the economy.
• B. Customer tastes aligning with the business.
• C. A boom in the market.
• D. A favorable government policy.

Answer: (A)

Threats are external factors that could harm the business’s performance. A downturn in the economy fits this because it reduces overall demand, can squeeze margins, and creates uncertainty—conditions outside the company’s control that could negatively affect outcomes. In contrast, when customer tastes align with what the business offers, market conditions are favorable, a market boom occurs, or government policy is advantageous, those are opportunities the business can pursue rather than threats. So the downturn is the best description of a threat.

Threats are external factors that could harm the business’s performance. A downturn in the economy fits this because it reduces overall demand, can squeeze margins, and creates uncertainty—conditions outside the company’s control that could negatively affect outcomes. In contrast, when customer tastes align with what the business offers, market conditions are favorable, a market boom occurs, or government policy is advantageous, those are opportunities the business can pursue rather than threats. So the downturn is the best description of a threat.