You’re not going to get away with answering, “Very well!” to this question. What the interviewer expects you to do – and what you very much need to do – is to explain precisely how your skills and experience match the job description/person specification.
Job descriptions and person specifications are often very lengthy and comprehensive. You don’t want to go into too much detail when answering this question – not least because it could get rather boring! The best strategy to adopt is for you to select a handful of issues and briefly talk about each in turn – expressing each in terms of your prospective employer’s needs.
Naturally, you will need to give this some thought and to have determined in advance what skills and experience the interviewer is going to be most interested in.