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Why SWOT isn’t utterly pointless

By Dave Chaffey 11 Jun, 2012
SWOT analysis

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?

By Dave Chaffey

Digital strategist Dr Dave Chaffey is co-founder and Content Director of marketing publisher and learning platform Smart Insights. Dave is editor of the 100+ templates, ebooks and courses in the digital marketing resource library created by our team of 25+ digital marketing experts. Our resources are used by our Premium members in more than 100 countries to Plan, Manage and Optimize their digital marketing. Free members can access our free sample templates here. Dave is a keynote speaker, trainer and consultant who is author of 5 bestselling books on digital marketing including Digital Marketing Excellence and Digital Marketing: Strategy, Implementation and Practice. To learn about my books, see my personal site Digital marketing books by Dr. Dave Chaffey. In 2004 he was recognised by the Chartered Institute of Marketing as one of 50 marketing ‘gurus’ worldwide who have helped shape the future of marketing. Please connect on LinkedIn to receive updates or ask me a question.

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