A SWOT analysis involves scanning the internal and external environment of a company to classify strengths and weaknesses as internal factors that are controllable, and opportunities and threats as external uncontrollable factors. It provides a quick understanding of a company's position by analyzing its resources and capabilities as strengths, limitations as weaknesses, favorable external conditions as opportunities, and unfavorable external barriers as threats. The analysis is presented in a 4-cell matrix and is a commonly used tool to evaluate companies and strategize competitive advantage.