A SWOT analysis is a high-level thinking tool used in many business environments, particularly during periods of complex decision-making. A SWOT analysis takes into account the Strengths, Weaknesses, Opportunities and Threats an organisation faces and provides a snapshot of the business environment, enabling executives to understand the major components, filter out irrelevant information and make an appropriate decision. Although a SWOT analysis provides a solid foundation, there are drawbacks to this approach as well.
It's a report, not research
It's important to remember that a SWOT analysis is a format of presenting a formal analysis. Anyone can address the strengths, weaknesses, opportunities and threats of an organisation and document the conclusions and information in a chart. The most important element of a SWOT analysis is the accuracy of the information cited and the quantitative data that revealed those conclusions. An executive who is reading the strengths sections of a SWOT analysis will not be shuffling through survey or poll data to learn that a cited strength is "superior customer satisfaction." A manager must remember that a SWOT analysis is not research but, ostensibly, the accurate conclusions of diligent and quantitative research. Although this is not a drawback, it is imperative to remember that a SWOT analysis is only as good as the research and data that went into drawing the conclusions.
On the surface, a SWOT analysis is just the listing of strengths, weaknesses, opportunities and threats an organisation faces, only with a fancy name and format. A SWOT analysis can be easily written and presented but often can be oversimplified. Even with proper prior research, those conducting the analysis tend to feel the urge to simplify their findings and streamline information to ensure their managers understand their conclusions. Although a manager appreciates employees thoughtfully minimising irrelevant information, many times crucial decision-making information is still unintentionally left out.
It is important to remember that salesmen and marketers rely on SWOT analyses very much. This is simply the case because they make presentations to many clients and their clients are expecting this format. For example, television networks sell air time for specific shows and their SWOT analyses present the high show ratings and young viewing demographic. Although marketers and salesmen are delivering what their client wants, they must remember that they are making a presentation that should resonate logically, emotionally and persuasively with their audience. Oftentimes, SWOT analyses can appear superficial, dull and uninteresting, especially to creative executives looking for "the next big thing" or an organisation with enthusiasm and momentum. A SWOT analysis is one part of the entire presentation and it's important to realise it's not the most stimulating or inspiring component.
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