SWOT analysis is recognised as a structured marketing planning tool, utilised to evaluate strengths, weaknesses, opportunities and threats within a business. The first step to create a SWOT analysis involves identifying the ultimate goal, in our case to create value for our shareholders through highly profitable products. Mehta states that a SWOT analysis allows you to “Invest strategically in key areas to convert weaknesses into strengths and threats into opportunities” (Mehta S, 2000) and to “Match key strengths with opportunities to create capabilities that can be developed into competitive advantages”. However, as Roebuck states in his book ‘Business Analytics’, SWOT may harm performance as studies by Menon et al. (1999) and hill and Westbrook have suggested (Roebuck K, 2012).
I rejected using a SWOT analysis in CESIM as its apparent simplicity contradicted the experience required to achieve beneficial outcomes. Professor Heinz Weihrich (2002) in his publication ‘The TOWS Matrix’ claims that some users found it difficult to translate the results of the SWOT analysis into meaningful actions. This is because a SWOT analysis can be misinterpreted and is not as flexible as other tools such as The Product Life Cycle.
A SWOT analysis has several limitations which need to be taken into account, such as reliability of the model, makes it prone to mistakes. Other limitations include:
• Doesn’t allow for prioritised issues.
• Doesn’t offer answers or suggest alternative decisions.
• Generates too many situations, without guidance required to choose the right one.
• Produces masses of information, but not all is useful.
SWOT analysis while useful if utilised from a products inception, can prove hard to use once another tool has been utilised. We ultimately decided against using SWOT as it provided masses of information about our CESIM business without the guidance required to determine what action was required. Some members of the group also found it hard to interpret the results as the publication by Professor Heinz suggested (Weihrich H, 2002).