Business strategy
SBUs, product lines, and geographic markets.
Fourth, to evaluate the size of its competitive gaps and leads, the company needs to know the relevant performance levels of all its close competitors. Yet, the relevant business practice is often different. Many companies find it too difficult to collect comprehensive, unbiased and up-to-date information on all relevant facets of competitor performance. Sometimes, the difficulties begin at the level of defining who all their close competitors are. Volatility of the competitive environment and differing judgments on factors by various individuals involved in SWOT analysis often aggravate this problem.
Fifth, SWOT inventories are rarely modified for alternative strategy options. All such oversights are quite remarkable in that few would disagree that the meaning and significance of any weakness or strength is strategy-specific. Let us imagine, for instance, a company that has sold organically grown vegetables and fruit of superior appearance and freshness at premium prices accepted by some market niches. If such a company all of a sudden switches to a mass, rather than niche, marketing strategy, its assumed technological strengths are likely to carry, at least for some time, significantly less weight with those of their potential, or actual, consumers who buy largely on price and accept average appearance and freshness.
Sixth, the reference to the current, rather than to the anticipated future, competitors' performance levels is another popular misconception. Some companies are slow to adapt bench trending, rather than benchmarking, as the more accurate, and more appropriate, strategic planning tool. They develop their strategies on the implicit, or arbitrary, assumption that their current strengths and weaknesses will retain their validity and currency throughout the entire period during which new strategies are to be pursued. Such a practice contradicts the very logic that underlies an effective strategy generation: the choice of strategy needs to be based on the anticipated future situation, not on an analysis of the current one. The (perceived) level of difficulty in obtaining a complete, unbiased and up-to-date prediction of all relevant facets of competitive performance could be the main cause of such a neglect.
Conclusion:
Despite the fact that SWOT does have some inherent drawbacks it still a relatively popular tool available to managers to assess the internal and external environment of their firm.
Some points to be noted before the conduct of a SWOT are the following:
Ø Training should be carried out for those who will be involved in the exercise. This will help them to familiarise themselves with the tool.
Ø The team should consist of not only top management . Even though the strategic direction is provided for at corporate level. This would ensure the most precious “buy-in” on the part of other members of staff who would be responsible for the implementation of the objectives so defined.
Ø Enough time should be provided to carry out the exercise properly.