Is SWOT Dead?

Even If You’re Not Ready to Kill It, It’s Time to Demote the Old Standard

No doubt, your mother once asked you after a misstep, “If all of your friends jumped off of a bridge, would you jump too?” We would like to propose the business corollary to a common planning mistake: If all of your business colleagues use SWOT analysis, would you use SWOT too?

You already know that SWOT stands for an analysis that highlights your company or brand’s Strengths, Weaknesses, Opportunities and Threats, because – admit it – you use it in your plans as a key input to your strategy. We see enough SWOTs to know that its’ use as an overrated strategy tool is responsible for the slow growth and lack of differentiation of many brands.

That’s why we want to kill it. Or at least cut back its’ use significantly, as you will see at the end of this short article.

What’s Wrong With SWOT?

SWOT analysis is, at it’s worst, an internally-focused analysis. Time and again we see companies base their strategies on a strength that simply does not matter to its’ customers.

For example, a medical device company kept touting its superiority in educating doctors — long after doctors needed or wanted training. The company’s customers already felt they fully understood the maturing product category and were looking to fulfill other needs in this market.

SWOT is, at it’s mediocre best, a competitor-focused analysis. Companies often invest in shoring up a weakness or reacting to a competitive threat only to find that the resulting capability is not anything customers care about.

For example, the online education company that spent huge sums managing a separate process just because competitors were doing it. Called “lazy registration”, new users didn’t have to register with the site right away.

Research and actual user behavior showed customers couldn’t care less about lazy registration – the company and its competitors were wasting time and resources managing a process that just didn’t matter to customers.

SWOTs Much More Powerful Cousin

The problem with SWOT – which you’ve probably figured out by now – is that it is not a customer-focused analysis. Comparing your company against competitor’s matters only if what you are comparing, matters to customers. First find out what customer’s want, then figure out if you are strong, weak, competitively threatened or have an opportunity in those areas.

Our own Ability to Win framework provides this discipline to our clients. As you can see below, the analysis moves left to right. It starts with the benefits that customers are seeking and only then compares competitive strengths and weaknesses in those areas from the customer’s perspective.

The resulting score shows how well a segment or customer group perceives your offering fulfills their needs (see below for an example from our book, The Accidental Marketer, highlighting a company in the medical equipment market — click on the image to see the detail):

 

 ATC for SWOT Is Dead

Using the customer’s perspective in the Ability to Win often paints a scary picture, especially if you are facing strong competitors and/or are not the dominant player in a market (like our client above). Maybe using a SWOT in planning seems less scary, because it starts with a long non-prioritized list of your company’s strengths.

But if you want to win, you must first face reality.   And the Ability to Win gives direct guidance to where you can leverage company strengths and improve weaknesses that will matter to customers. 

A Death Sentence Reprieve for SWOT Lovers

If you are one of those “bridge jumpers” that can’t bear to part with your SWOT, take heart – it has one useful purpose. A SWOT can be helpful assessing your own and competitor’s capabilities after you have assessed customer needs.

Then – if you must — you can use your SWOT as a guide to help you understand your own and competitor’s capabilities in fulfilling those needs.

But we think you are better off without it. SWOT takes you away from something that is, has been and always will be the driver of success in business – understanding and fulfilling customer needs.

For this reason, in our opinion SWOT is dead – long live the Ability to Win!

9 Responses to “Is SWOT Dead?”

  1. Wim Van Cotthem

    Dear,

    I was not never a big fan of SWOTs as they are descriptive at best and too internally focused. I agree that defining what is needed to win in a market and finding your abilities to win, does force you to think about what really matters to customer and to outline strategies to win.
    Asking the “so what question” when defining strategies with marketers result in on better defined and actionable strategies than just general wording.

  2. Laura

    Mary and team,
    I appreciate your perspective and have been impressed with the Lean Start Up concepts (Eric Ries) that are taking hold with new ventures here in the bay area. The idea is the same — seek input from your customers and iterate or pivot based on their needs. Such a simple idea, yet many companies are challenged to embrace and incorporate this into their processes.

  3. Rob Neill

    Great article. I won’t drop SWOT yet though. I find it’s a good tool but people misuse it. Often they seem to be in template filling mode when they use them, not really thinking about what is relevant. I usually tell my team that everything on a SWOT is an issue, and therefore HAS to be dealt with in the plan. So if they say that a strength is our great sales force, I look for the part of the plan that says in what different ways will we use the sales force. If nothing is mentioned then either they overlooked it or it wasn’t relevant in the first place. Such an approach helps ensure that they focus on what matters. Combined with a tool like the Ability to Win tool the SWOT is still pretty powerful.

  4. Tom Spitale

    Rob — many thanks for your comments (and for all the other comments on this article by various folks.) We were originally going to call this article “SWOT is Dead” instead of the subtly different, final title “Is SWOT Dead?” for reasons similar to what you mention above. Used right, SWOT analysis can have some redeeming qualities. For example, we’ve found that doing a SWOT-like analysis — after a full customer needs analysis — can be helpful in highlighting what a company’s current assets and skills are. These company capabilities can then be applied to customer needs in unique ways that create a sustainable competitive advantage. It’s just that we see too many plans where the SWOT analysis is used to create strategies without connecting to customer needs, which is where the trouble begins and ends.

  5. Clifton

    I was wondering when such a question would be asked and so thank you for a great article. I agree with Rob that SWOT is useful but abused unnecessarily. The SWOT’s I have come across are very internally focused. Also they tend not take into account the external environment and the customer’s perspective of what the strengths of the organization are. Acting on this subjective analysis leads to strengthening areas which may have no impact on the customer.

  6. Larry Cohen

    i agree with the authors and comments regarding “what it takes to win” but also believe that SWOT or something similar needs to be used deep into the company to critically assess skills and talent after understanding what is needed to win.
    Just as important is to figure out a good way to get representative customer feedback. I have found that feedback and needs received from KOLs is verry different than from the average customers. Getting good customer input is critical in developing a winning competitive strategy and plan
    Larry

  7. Tom Spitale

    Hi Larry — thanks for the comment — you put it perfectly from my perspective. As you said, SWOT can have a useful place in the planning process, but it must come after understanding what is needed to win. And we are in violent agreement with your thoughts that getting feedback from average customers (not just KOLs) is critical. We are always eager to hear about creative ways that people are getting this feedback, in addition to traditional market research. Please write back if you have had experiences in obtaining this type of feedback that will help our readers!

  8. Perini Schleroso

    This article lost all credibility with me the moment I read “could care less”.

  9. Tom Spitale

    Thanks, you are right and I made the correction.

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