Strengths vs. Strong Position: Rethinking the Nature of SWOT Analysis

Abstract

The analysis of strengths, weaknesses, opportunities and threats (SWOT) has long been recommended
as the foundation for strategy. In spite of this popularity, the actual procedure remains vaguely
operationalized, and both descriptive and empirical accounts of its use (as noted here) indicate both
conceptual and procedural problems. After reviewing the development of SWOT in the strategy
literature, examples of SWOT analyses are noted. A variety of criticisms of the SWOT method are
examined, leading to a summary of key principles for SWOT analysis. A new, five-step method for
carrying out SWOT is proposed based on critical customer values and competitor comparisons,
producing an assessment of organizational strengths in terms of strong product positioning. This
method is illustrated by a case analysis of a graduate degree program. The implications of SWOT
analysis for analyzing threats are considered in some detail, stressing the importance of competitive
intelligence as part of this process.