Marketing Planning – Do not Make SWOT

SWOT (intensity, weakness, opportunity, threats) is a popular framework for developing marketing efforts. Google search for "SWOT" and "planning" turned almost 93,000 clicks (August 2004), most of which boast the use of SWOT. Some students have said it's the most important thing they learned at Wharton School.

While SWOT is presented as useful technology in numerous marketing texts, it is not promised in general: One expert said he chose to think of SWOT as "significant waste time".

The problem with SWOT is more serious than the fact that it spends time. Because it mixes an ideological process with estimates, it is likely to reduce the number of programs that are considered. In addition, people who use SWOT can realize that they have done enough work to plan and ignore such sensible things that define the company's goals or calculate profitability for other methods. I have seen this when business school students use SWOT in cases.

What does the evidence say? Perhaps the most prominent indicator is that I have not been able to find any evidence supporting the use of SWOT.

Two studies have examined SWOT. Menon et al. (1999) 212 managers from Fortune 1000 asked about recent marketing plans made in their companies. The results showed that SWOT harmed performance. When Hill and Westbrook (1997) examined the use of SWOT by 20 companies in the UK in 1993-1994, they concluded that the process was so faulty that it was time to "recover a product."

One spokeswoman SWOT asked: if not SWOT, then what? Like the corporate literature, the better opportunity for organizers is to follow the formal written process to:

  1. Set goals
  2. Create other methods
  3. Assess other methods
  4. View results
  5. Get commitment among stoneholders at each step in this process.

I describe this 5-step procedure in Armstrong (1982). Indicators of the value of this organizational history, derived from 28 validation studies (summarized in Armstrong 1990), showed that it led to better corporate performance:

  • 20 studies found more results with a formal plan
  • 5 found no difference [19659008] 3 formally found planning to be harmful

This support was provided although formal planning in the studies usually only used some of the steps. Furthermore, the steps were often poorly enforced and conditions were not always ideal for formal planning.

In the light of evidence, SWOT is not justified under any circumstances. Instead, use a comprehensive 5-point planning.

References

Armstrong, JS (1982) "Value of Formal Planning Policy Strategic Decision," Strategic Management Journal, 3, 197-211.

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

Hill, T. & R. Westbrook (1997), "SWOT Analysis: It's Time to Restore Product," Long Range Planning, 30, No. 1, 46-52.

Menon, A. et al. (1999), "Antecedents and Consequences of Marketing Strategy Making," Journal of Marketing, 63, 18-40.

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