Advantages and Disadvantages
The popularity of SWOT analysis is down to its simplicity and flexibility. It is easy for everyone to understand and its implementation does not require any technical knowledge or specialist training.
The SWOT methodology can condense a large number of situational factors into a manageable number but it does encourage a tendency to oversimplify the situation and it can be unduly influenced by vested interests within the organization. This is particularly apparent when conducting a high-level organizational SWOT. For example,
It is a subjective decision as to whether or not a particular organizational culture should be classified as a strength or a weakness. Those responsible for the prevailing culture will see it as a strength no matter what, whereas those who have less invested may be more objective and see it as a weakness in certain circumstances.
A technological change may be considered a threat or an opportunity depending on perspective. Those who owe their jobs and status to an existing technology are likely to view any change as a threat to their position and therefore to be avoided. Others who have no vested interest may consider it is as an opportunity.
Those responsible for developing strategy need to be aware of these issues of oversimplification and vested interests, and try to take them into account. This is always going to be difficult, however, if senior management has a reputation for being unwilling to consider options that may threaten the current business model.
Another problem with SWOT is that there are no obvious limits as to what is and is not relevant. The Chair managing the SWOT discussions needs to keep everyone involved focused on what is important in achieving the objectives, rather than just creating lists of issues and classifying them arbitrarily without any external reference.
It is also necessary to add an element of priority to the list of factors in each of the four categories. Otherwise you may decide that opportunities and threats balance each other out, when in fact the threats pose a greater risk to your organization than the weaker opportunities it could take advantage of.
Anyone using the SWOT technique must also be mindful that its simplicity does not provide a mechanism for solving any disagreements that arise from the discussion. Because this technique is often used in a brainstorming or blue-sky thinking environment there is usually little opportunity to verify statements with hard data or assess the practicalities of implementation.
Although this business analysis technique has its limitations it does play a valuable role in enabling unusual and non-conformist issues to be raised and discussed. It also has a role to play in developing a strategy objective when it is used as part of the process, but its limitations must be acknowledged.
A SWOT analysis is useful for any kind of strategic planning. It's a relatively quick way to look at organizational strengths, weaknesses, opportunities, and threats. The overall purpose of a SWOT analysis is to examine the internal and external factors that help or hinder you in achieving each of your objectives. It can be used as a brainstorming tool or to help focus your attention on key areas.
You can use your SWOT analysis as a means of gathering information from a range of perspectives or you may be able to use your results to strategic advantage by either matching your strengths to opportunities or converting threats or weaknesses into strengths or opportunities.
SWOT analysis can play a valuable role in enabling unusual and non-conformist issues to be raised and discussed. It also has a role to play in developing a strategy objective when it is used as part of the process, but its limitations must be acknowledged.
The most obvious limitations are: the risks of oversimplification; the fact that vested interests can prevent weaknesses and threats from being acknowledged; and the danger of information overload as there are no obvious limits as to what is and is not relevant.
|
|
 |
You may also be interested in: Definition of SWOT Analysis, Strengths, Weaknesses, Opportunities, and Threats, Internal Factors (Strengths and Weaknesses), External Factors (Opportunities and Threats), Matching and Converting, Advantages and Disadvantages and SWOT Analysis Example.
