Marketing Planning – Don’t Do SWOT


SWOT (Strengths, Weaknesses, Opportunities, Threats) is a popular framework for developing a marketing strategy. A Google search for “SWOT” and “planning” generated nearly 93,000 hits (August 2004), most of which praise the use of SWOT. Some students said it was the most important thing they learned at Wharton School.

Although SWOT is touted as a useful technique in many marketing texts, it is not universally praised: one expert said he preferred to think of SWOT as a “meaningful waste of time”.

The problem with SWOT is more serious than the fact that it wastes time. Because it mixes idea generation with evaluation, it is likely to narrow the range of strategies considered. Additionally, people using SWOT might conclude that they have done an adequate job of planning and skip such sensitive things as setting business goals or calculating ROI for alternative strategies. I have observed this when business school students use SWOT on cases.

What does the evidence say? Perhaps the most notable indication is that I found no evidence to support the use of SWOT.

Two studies examined SWOT. Menon et al. (1999) surveyed 212 managers of Fortune 1000 companies about recent marketing strategies implemented in their companies. The results showed that SWOT was detrimental to performance. When Hill and Westbrook (1997) examined the use of SWOT by 20 companies in the UK in 1993-94, they concluded that the process was so flawed that it was time for a “product recall”.

A SWOT advocate asked: if not SWOT, then what? Drawing from the corporate strategic planning literature, a better option for planners is to follow a formal written process to:

  1. Set goals
  2. Generate alternative strategies
  3. Assess alternative strategies
  4. Monitor results
  5. Obtain stakeholder engagement at every step of this process.

I describe this 5-step procedure in Armstrong (1982). Evidence of the value of this planning process, obtained from 28 validation studies (summarized in Armstrong 1990), has shown that it leads to better business performance:

  • 20 studies found better performance with formal planning
  • 5 found no difference
  • 3 found formal planning to be detrimental

This support was obtained even though the formal study planning generally used only certain stages. In addition, milestones were often poorly implemented and conditions were not always ideal for formal planning.

Given the evidence, SWOT is not warranted under any circumstances. Instead, use the complete 5-step planning process.

The references

Armstrong, JS (1982) “The Value of Formal Planning for Strategic Decisions”, Strategic Management Journal, 3, 197-211.

Armstrong, JS (1990), “Review of Corporate Strategic Planning,” Journal of Marketing, 54, 114-119.

Hill, T. & R. Westbrook (1997), “SWOT analysis: time to recall a product”, Long Range Planning, 30, no. 1, 46-52.

Menon, A. et al. (1999), “Antecedents and consequences of developing a marketing strategy”, Journal of Marketing, 63, 18-40.

Source by Scott Armstrong

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