SWOT ANALYSIS | TOWS ANALYSIS | A Note on Marketing Planning

SWOT (Strengths, Weaknesses, Opportunities, Threats) is a popular framework for developing a marketing strategy. A Google search for “SWOT” and “planning” turned up almost 93,000 hits (August 2004), most all of which laud the use of SWOT Analysis. Some students have said that it is the most important thing they learned at the Wharton School.

Although SWOT is promoted as a useful technique in numerous marketing texts, it is not universally praised: One expert said that he preferred to think of SWOT as a “Significant Waste of Time.”

The problem with SWOT is more serious than just wasting time. Because it mixes idea generation with evaluation, it is likely to reduce the range of strategies that are considered. In addition, people who use SWOT might conclude that they have done an adequate job of planning and ignore such sensible things as defining the firm's objectives or calculating ROI for alternate strategies. I have observed this when business school students use SWOT on cases.

What does the evidence say? Perhaps the most notable indication is that I have been unable to find any evidence to support the use of SWOT.

Two studies have examined SWOT. Menon et al. (1999) asked 212 managers from Fortune 1000 companies about recent marketing strategies implemented in their firms. The findings showed that SWOT harmed performance. When Hill and Westbrook (1997) examined the use of SWOT by 20 companies in the UK in 1993-94, they concluded that the process was so flawed that it was time for a “product recall.”

One advocate of SWOT asked: if not SWOT, then what? Borrowing from corporate strategic planning literature, a better option for planners is to follow a formal written process to:

(1) set objectives, (2) generate alternative strategies, (3) evaluate alternative strategies, (4) monitor results, and (5) gain commitment among the stakeholders during each step of this process.

I describe this 5-step procedure in Armstrong (1982). Evidence on the value of this planning process, obtained from 28 validation studies (summarized in Armstrong 1990), showed that it led to better corporate performance:

20 studies found higher performance with formal planning, 5 found no difference, and 3 found formal planning to be detrimental.

This support was obtained even though the formal planning in the studies typically used only some of the steps, the steps were often poorly implemented, and the conditions were not always ideal for formal planning.

Given the evidence, SWOT is not justified under any circumstances. Instead use the comprehensive 5-step planning procedure.

References

Armstrong, J. S. (1982) “The Value of Formal Planning for Strategic Decisions,” Strategic Management Journal, 3, 197-211. Available in full text at http://jscottarmstrong.com

Armstrong, J. S. (1990), “Review of Corporate Strategic Planning," Journal of Marketing, 54, 114-119 also found in full text at http://jscottarmstrong.com.

Hill, T. & R. Westbrook (1997), “SWOT Analysis: It’s Time for a Product Recall,” Long Range Planning, 30, No. 1, 46-52.

Menon, A. et al. (1999), “Antecedents and Consequences of Marketing Strategy Making,” Journal of Marketing, 63, 18-40

SWOT ANALYSIS: How to Reboot Your Life with the SWOT MATRIX

We often see, when the computer locks up and nothing functions, there is a convenient option: you can reboot it. There are times when our life gets locked up as well. At those times we feel paralyzed and if we stay in the feeling of paralysis, we can end up with depression or other health problems.


When we’re stuck, we need to reboot our life. Unfortunately there isn’t a convenient button to push. But it’s possible all the same. The first thing we need to look at is why and where our life has got stuck. A great tool to get this overview is the SWOT matrix. SWOT is an acronym for Strength, Weaknesses, Opportunities, and Threats. The first two, Strengths and Weaknesses, are our personal attributes that we bring to our life. The second two, Opportunities and Threats are what the outside world brings to us.


The way to reboot our life with the help of the SWOT matrix is to look at each of the seven areas of life and check out where we may be stuck and how to move forward. The important point here is that stuckness can result from internal forces, that is from our own personal attributes and how we bring them to bear on the various areas of our life. Stuckness can also result from external factors, that is from forces that impinge on our life from outside.

Here are seven areas of life that we need to consider:

• Mental
• Physical
• Spiritual
• Social
• Professional
• Recreational
• Creational

If we take each one and investigate it in terms of the SWOT Matrix, we can see how to reboot our life.

1. Mental

This area includes our emotional, as well as our intellectual well-being. Right now, what are your strengths and weaknesses in this particular area? Are you involved in learning something new? Learning is important for our intellectual well-being. We need to use our brain, in order to develop it. After all, the good news is that we can develop intelligence at any age. What threats or opportunities to you see in regard to your mental wellbeing?


How is your emotional health right now? What is strong about it and where are there weaknesses? What threats or opportunities to you see in regard to your emotional wellbeing?

2. Physical

How is your physical health? Which basket are you in: fit or flab? What are your strength or weaknesses in regard to your body? What threats or opportunities do you perceive? Threats could be health problems.


Maybe you’re out of shape, overweight, or you have other health threats to deal with. Opportunities are actions that we can take to optimize our physical condition.

3. Spiritual


Is there a spiritual component to your life? Do you have a spiritual practice, like meditation or prayer? Or are there moments in nature where you feel connected? I’m talking about natural spirituality here.



What are your strength and weaknesses in respect to spirituality? What threats or opportunities do you perceive?

4. Social

The social aspect of our life covers all the areas of connection. How are your connections? Are you in a relationship with a special person? Do you have family? Do you have strong friendships? What about colleagues – do you have strong connections? And how is your social life?



Take a look at the SWOT Matrix and consider what your strengths and weaknesses are in respect of your social connections. What threats and opportunities can you discover?

5. Professional

The professional area of life covers what we do for a living, and what we do in order to develop new areas of expertise. How is your motivation? What are your strengths and weaknesses in this area? Are there threats and opportunities on the horizon?

6. Recreational

What do you do for fun? We all need time out where problems recede and we do something that is pure enjoyment.

How easy is it for you to include fun in your life? What are your strengths and weaknesses? How to you see opportunities and threats in this area of your life?

7. Creational

We need to be creative in one way or another if we are to feel in balance and happy. How is your creativity? What are your strengths and your weaknesses?


Many people find it difficult to be creative. Creativity is something we can misplace along the way. Any creative activity can kickstart it again.

Now that you’ve looked at the various areas of your life with the help of the SWOT Matrix, you’ll have a better understanding about how to reboot your life. Even if you just choose one area of your life and look for opportunities, your life will start to open in a new way.m If you focus on all areas of your life and focus on opportunities, your life will reboot completely.

What did you notice about your life when you looked at the various areas with the help of the SWOT Matrix?