Context analysis is a critical preliminary step when developing a business plan. In context analysis, potential competitors and overall market conditions are analyzed in the context of available strengths and assets.
The SWOT matrix is a popular system for organizing data in context analysis. SWOT stands for "Strengths, Weaknesses, Opportunities and Threats." Using the SWOT matrix, a context analysis might identify and categorize emerging trends in a particular industry. Analysis of this contextual information can provide the information needed to create business plans that use organizational strengths appropriately. Context analysis is also used by various types of organizations to guide strategy in fragile, conflict-prone regions.