Tuesday, 4 December 2012

Beware the Generic SWOT

SWOT analysis would have to be among the most over and misused models around. I am particularly reminded of this fact around this time of the year when marking undergraduate assignments, where quite a number of them incorporate rather inappropriate SWOTs.

However, the misuse of SWOT analysis isn’t just confined to undergraduates. Most of the organizations that I worked for have also managed to equally misuse the SWOT.

One of the alluring dangers of a SWOT is its supposed simplicity. It is certainly a simple concept to grasp, but the development of an effective SWOT is quite painstaking and difficult to achieve.

The standard use of a SWOT in an organization, based on my direct experience, usually occurs two hours or so into a strategic planning weekend, right after a series of ice-breaker and team-building exercises (primarily designed to convince people that they should be giving up their weekend for the good of the organization).

To make matters worse, the development of the SWOT normally takes place within a brainstorming session, which somehow manages to be completed in just ten minutes or so to produce the infamous generic SWOT.

However, to be used effectively a SWOT analysis should be completed at the end of an extensive period of analysis and completed in detail by a number of analytical and strategic people, who may debate the issues for days to arrive at a final document. In other words, the final SWOT (for larger firms) should represent weeks of insightful analysis and discussion - not a quick ten minutes of random brainstorming.

Why is so much effort required for a SWOT? Because a SWOT is the summary and foundation position for the firm or brand that the entire marketing strategy is then based upon. And it goes without saying, that if you quickly brainstorm a generic SWOT, then you are very likely to develop a generic marketing strategy that will have limited impact in the marketplace.

So what is a generic SWOT? A generic SWOT is the direct output of a SWOT brainstorming session that produces a SWOT that is 90% identical to every other firm in the world. In other words, if your firm has used brainstorming or some other top-level technique to develop a SWOT, then I could probably predict 90% of your SWOT.

The usual starting point is strengths and of course we will usually come up with such classics as 'our product range', 'our customer service', and, of course, the always popular and politically correct 'great management team' and even occasionally we will throw in 'great staff' or 'great culture'.

Next we turn to weaknesses and usually we will identify 'product gaps', 'brand equity', 'limited target markets', along with some 'staff skills' in order to ensure that the training department has something to do for the next 12 months.

Threats are usually the easiest and often the longest list. Topping the charts here is 'competition', followed by 'environmental issues', 'rising costs' and 'technology change'.

The list of opportunities is pretty straightforward as well and will include the standards of 'new products', 'new markets', along with the more modern entries of 'social media' and 'digital marketing'.

It goes without saying that in these sessions there is the almost mandatory discussion of the difference between strengths and opportunities and between weaknesses and threats, along with the debate of whether the same issue can be on two lists. Unfortunately, this style of discussion and direction, particularly in an open and judgmental brainstorming session, is usually not helpful. And, of course, we will end up with 'technology change' being both an opportunity and a threat and an 'established product range' being both a strength and a weakness.

As you can guess, I'm not a big fan of the quick top-level SWOT. In my view, they are very dangerous and best to be avoided. However, thought-out, debated and analytical SWOTs can open the door to the development of innovative and highly effective marketing strategies that can make a huge difference to an organization’s performance.

Geoff Fripp
Lecturer – Masters of Marketing at the University of Sydney Business School

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