Why SWOT isn’t utterly pointless

5 reasons why SWOT analysis is still relevant to marketing strategy development

I enjoy the contrarian views of Mark Ritson in his column for Marketing Week. I agree with what he says less often, but usually keep it to myself. But in this case I thought I’d comment since he’s knocking SWOT analysis, a technique that I continue to use and recommend for creating digital marketing strategies.

Here’s a flavour of his views, from a recent post for Marketing Week expanded on in this post for Australia’s B&T titled the utter pointlessness of SWOT, Ritson says:

“The big clue to the utter pointlessness of the SWOT approach can be gleaned from its total lack of value to any marketer”.

He’s talking about the application in the real-world and bemoaning why it is still taught in universities and colleges. I’d certainly agree, if it doesn’t work in the real world, it shouldn’t be taught, but I think it does still hold value if applied in the right way. Now that’s true of a lot of tools. Misapplied or in the wrong hands they don’t work.

Why SWOT analysis is valuable

Since our focus at Smart Insights is developing digital marketing strategies, my arguments are based on developing a digital channel-specific SWOT, but my five arguments showing the value of SWOT apply equally to development of overall marketing strategy.

1. SWOT is a strategy development tool

We’ve seen in several polls that many companies don’t have a digital marketing strategy.

So, a technique that can help inform strategy and communicate it more effectively has to be better than no strategy at all. The beauty of this tool is in its simplicity – you can engage non-digital specialists with the key issues facing a company without getting bogged down in analytics reports. A simple tool is valuable for explanation, buy-in and carrying others with you.

Not pointless.

2. SWOT analysis informs strategy

Or at least it should. I’d agree with Mark that the conventional simple form of SWOT only looks at analysis, not strategy. If SWOT analysis just includes the 4 areas of S-W-O-T as a four box matrix, then it’s like to get left on a shelf and rightly ignored.

That’s why I always recommend using this form of SWOT analysis, often called the TOWS matrix:

The TOWS matrix approach has the internal strengths and weaknesses and external market opportunities and threats, but also the 4 types of strategy that can be reviewed for the future.

3. SWOT is informed by marketplace research – it’s outward looking

Or at least it should be… It encourages analysis of the factors that impact a company, starting with customers, then competitors and other marketplace players like media and publishers. Then going on to external macro-forces like PEST.

Just so I don’t misrepresent Mark Ritson, or he doesn’t misrepresent himself through his eye-catching headline, Ritson isn’t saying that analysis or research isn’t valuable, simply that SWOT is a poor technique. He points to these other ten marketing analysis techniques which I recommend taking a look at. I’d also suggest you need a way of summarising the output from these more complex analysis techniques. A SWOT can help here!

In my experience, many companies are too involved with executing campaign tactics to make the time to look outwards at the changes happening in the marketplace in a structured way.

Of course this is particularly important in the fast-moving environment of digital marketing. Competitors can be eating your lunch through innovative use of digital tactics like search, social media and mobile marketing.

The other benefits of SWOT are in common with many other analysis or strategy development tools, so I’ll keep these brief:

4. SWOT generates ideas for key strategies

Using the TOWs format, the SWOT analysis can be used in training and strategy development sessions to think through alternative strategies and priorities. You can argue that some of these may be obvious, but it can help senior management buy-in if these ideas are worked through by a team, rather than just presented.

Take one example from this diagram, discussing countermediation helps companies think about ways of increasing their digital footprint through partnering with or acquiring publishers, something I find is often missed in web strategy.

5. SWOT provides focus

After the SWOT has been created, companies can then summarise the key issues that need to be faced and look at the cost-benefit of different communications approaches and place them on a roadmap.

What do you think? How do you use SWOT? Is it just for theory and best ignored in favour of tactics or other strategy development tools?

  • Larry Eiler

    SWOT is old, proven and has high value to anyone whoi wants to vet and filter some marketing issue. Just have participants honor honesty and you will win every time — as I have with my business over 25 years.

    • http://www.smartinsights.com/ Dave Chaffey

      Thanks for your comment Larry.

      Yes, it’s established for a reason – it has value, especially in getting buy-in/input – particularly if you run a workshop with participants as you suggest, rather than just presenting it.

  • Bryan Dibben

    There are different approaches to a SWOT. Some approaches have more value than others.

    What I think Mark Ritson is referring to is an approach to a SWOT that is not customer led.

    I quote

    “I think SWOT is a subjective, pointless waste of time used by managers who don’t know any better.” (Said in the comments in the original article)

    “…the completion of every SWOT always ends the same way. The manager in charge of the whiteboard asks if anyone else wants to add anything and the muffled silence that ensues indicates either that the job is done or, more likely, that its home time.”

    I agree to some extent that this approach (or management guesses) may not be the most effective way to conduct a SWOT.

    In contrast, a proper market led approach to a SWOT can be extremely worthwhile.

    1. Starting with a segment of your market, ask your customers what factors do they take into consideration when they buy? In other words what are the critical success factors?

    2. From this ask your customers to evaluate your organisations strengths and weakness against these factors.

    The key point is that it’s your customers that inform not a bunch of managers with a whiteboard.

    Done correctly, strengths and weaknesses alone has extreme value to any organisation.

    • http://www.smartinsights.com/ Dave Chaffey

      Is SWOT pointless? Hi Brian, thanks for your detailed comments – adding a bit more context to what Mark R said and recommending the approach you have found it has worked.

      I agree – keep it customer-centred, research-based.

      I like your summary:

      “The key point is that it’s your customers that inform not a bunch of managers with a whiteboard”.

  • James Gurd

    Hi Dave,

    Thanks for this post. For me the framework for analysis is rarely the issue, more the degree of focus and clarity from people doing the analysis. If you have clear goals and objectives, then you focus the output to deliver against them. SWOT can be useful. It can be useless.

    Which way the coin falls depends on how it is approached, how well communicated the goals are to people taking part and outcomes are focussed on delivering against goals.
    The problem with theory teaching is that often it lacks the real world application – I know from having done an MBA, the SWOT thing was just chucked in without giving any clear context and application. People learn best when what they are being asked to contribute to is framed by the context of their day to day job.

    So if a SWOT project helps clarify what people have to do to contribute to the global goals to improve business performance, you’re likely to get greater buy-in than a fancy document that gathers dust because nobody knows how to apply it to their own roles and their team output.

    Whether or not SWOT is the right approach depends on what you are trying to achieve. Start with goals/objectives & desired outcomes, then match back the methodology that fits the best.
    Thanks
    james

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