1) The city must prove that it is big enough to handle the Olympics. With the games come a huge number of tourists, athletes, journalists, and politicians. They must show that they can host the games in new stadiums and venues, they must house all the people in adequate hotels, and they have to transport everyone from one place to the next with a reliable mass transit system. They also need to show that they can handle the high level of security needed at the games.
2) The city needs to convince residents that the expenses of covering the Olympics (which may be covered by raising taxes) are worth it in city improvement and new jobs.
3) The cities needs to maintain a highly positive media exposure to carry the games.
4) The tangible effects of hosting the Olympic games may not prove beneficial if the bid committees do not exercise proper judgment in developing the city to host the Olympics.
If the IOC decides that a city has fulfilled the four points above, the city is considered a "Candidate City" and goes into the second phase of the process. After submitting an application and an application fee, the IOC makes a final judging on which city is the best candidate for the coming Summer or Winter Olympic Games.