• MAP Asia Pacific Ltd

Are You Doing the SWOT Analysis Backwards?

There are few tools more ubiquitous in management, marketing, and other key business functions than the SWOT analysis: It involves listing the strengths, weaknesses, opportunities, and threats facing your firm, division, functional area, or other aspects of your organization, products, or services. The results of a SWOT analysis can be (and almost always are) presented simply as a 2 x 2 grid, with one dimension representing the internal versus external factors, and the other depicting positive versus negative valence.

The problem is, as typically conducted, the SWOT is not really an analysis or diagnosis at all. It is simply list and categorization of the internal and external situational factors related to the subject that you’re evaluating, usually produced during a group brainstorming session. The resulting document is typically less than insightful and does not offer a clear path to action. It is simply an elegant organizational tool. That might be part of its attractiveness — besides its catchy acronym — and a key reason for its popularity.

There are a few reasons that SWOT, in its current form, falls short of desired outcomes. First, the traditional 2 x 2 grid layout for the analysis, which encourages users to present all of the information on a single PowerPoint slide or piece of paper, often leads to exceedingly short, often one- or two-word descriptions. This desire for brevity also often leads to shortcuts in thinking. In our experience as both consultants and teachers, for instance, we’ve found that an important attribute like “price” might be listed as a strength, weakness, opportunity, and threat without any further explanation. The SWOT offers no analysis or insight as to whether the price is too comparatively high, if competitors can undercut it, if a firm can run a promotion, or any other factor related to pricing.

Second, the SWOT analysis is surprisingly difficult to interpret, primarily because of the lack of a hierarchy. All four quadrants of the grid are emphasized equally. It is merely a snapshot of the current situation — or, worse, a snapshot of what’s currently on the minds of brainstorming session attendees.

Third, our natural instinct is to jump to solutions, particularly when it comes to listing opportunities. In too many cases that we’ve seen, SWOT users misinterpret what “opportunities” are, presuming that they are recommendations of “what could be done.” For instance, we once saw a bicycle tour service provider list “create a mobile application with a live map” as an opportunity. But this isn’t an opportunity in the SWOT sense of the word; rather, it is merely a recommendation that has not been fully processed. Rather, an opportunity might be the growth in the adoption of voice technology. Another: That phone apps are becoming easier to develop, yet the competition isn’t using them.