Hi, Marketers:
Today, I want to talk about an evolution of SWOT analysis. It seems like such an old term that everyone in college had to learn and quickly forget. However, there is no management or marketing plan that lacks these four letters. SWOT analysis has its critics as well, who claim it to be a distraction and a waste of time. Judge for yourself.
According to the famous Wikipedia “SWOT analysisis a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a projector in a businessventure. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieving that objective. The technique is credited to Albert Humphrey, who led a convention at Stanford University in the 1960s and 1970s using data from Fortune 500companies.”
Critics, such as J. Scott Armstrongnote that "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 ROIfor alternate strategies." Findings from Menon et al. (1999) and Hill and Westbrook (1997) have shown that SWOT may harm performance. As an alternative to SWOT, Armstrong describes a 5-step approach alternative that leads to better corporate performance.
In any case, if you decide to do a SWOT analysis, it MUST have a purpose. Below are the three examples of SWOT analysis that showcase an evolution of the method from a very basic description (IMG) of internal and external factors to actually illustrating weighted factors on the graph (Second Life).
Graph 1. SWOT Analysis. IMG
Graph 2. SWOT Analysis. ZARA
Graph 3. SWOT Analysis Using Clusters. Second Life
Advantage of the second and third methods of SWOT analysis is that it provides management with a much clearer picture of the situation. It ranks internal and external factors based on the predetermined weight. This way, it is much easier to understand what are top strengths, weaknesses, opportunities and threats and which ones are either less important or insignificant to the immediate health of an organization.
NOTE:
This is our first blog and I know it is really important to set tone of the conversation from the very beginning. This blog will be primarily about best advertising and marketing practices in the world. I will try my best collecting and analyzing various case studies that proved to be very successful or failed horrendously. I welcome everyone to provide opinions, share their thoughts and ideas, criticize and send your own case studies, so we can discuss them here.
