What's swot in strategic analysis?

Abstract

Environmental analysis is a critical part of the strategic management planning process. The SWOT (Strengths, Weaknesses, Opportunities, Threats) framework is proposed by many as an analytical tool which should be used to categorize significant environmental factors both internal and external to the organization. SWOT analysis has been praised for its simplicity and practicality. As a framework it has been widely adopted but, generally, its use has been accepted uncritically. It is timely to reappraise its value as a strategic management tool. If used simplistically, the SWOT framework is a ‘naive’ tool which may lead to strategic errors. More detailed analysis using complementary frameworks can overcome SWOT's inherent shortfalls. SWOT should not be viewed as a static analytical tool with emphasis solely on its output. It should be used as a dynamic part of the management and business development process. Despite impressions often created by many authors on the subject who portray strategic planning as systematic, sequential and rational, the realities of planning reveal that strategy formulation is more likely to be somewhat more incremental, non-rational and irregular; more ‘organic’ than ‘mechanic’. Use of the SWOT framework tends to be most closely associated with the ‘mechanistic’ approach and suffers as a consequence of this association. SWOT analysis does not have to be mechanistic; adoption of the approach proposed here with emphasis on its process values as well as its output is strongly recommended.