A bottleneck is quite literally a small part of your installation (hardware or software), where too much processing is being funneled through a specific area. In other words, far too much is going on in one particular area of an installation, in comparison with any other part.
What are the causes of bottlenecks? Causes are numerous. More often than not, bottlenecks are a result of poorly designed SQL code or a poorly structured data model. Rarely is there a hardware issue. One of the most commonly occurring hardware performance issues is inappropriate disk structure for redo logs and archive logs.
Excerpted from
Excerpted from Digital.Press.Oracle.Performance.Tuning.for.10gR2.2nd.Edition.Sep.2006