Agile Insights Blog

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5 Reasons to Break Up with SWOT Analysis

May 28, 2015 11:33:20 AM

Dear SWOT Analysis,

I think it’s time we parted ways. We used to have something great together, but it’s just not the same anymore. The magic isn’t there. In fact, it hurts me to say it, but our growth has stalled.

To be perfectly honest, I’m seeing someone else. He‘s intelligent and makes me smarter, too. He’s a fast mover with a great sense of style. Best of all, he just gets me and is there for me on a daily basis when I need him. He understands the challenges I face and helps me be successful.

Good luck in the future with your paper and pencil. I’m moving on to bigger and better things – the future is looking bright!



Everyone learns about the SWOT analysis in school. It originated from research conducted at Stanford Research Institute in the 1960s and has become the old school standard for analyzing your business and market opportunity. It’s how we were taught to take stock of our internal strengths and weaknesses and external opportunities and threats.

The term “SWOT Analysis" gets searched more than any other strategy term and you’ll find millions of results on Google (no joke). Clearly, it’s popular. Something about it is innately compelling.

Perhaps this is because business leaders operate in the face of amazing complexity, and SWOT presents a way of simplifying important strategic concepts. It’s a way of easily organizing different sources of information, and anyone with a basic understanding of your business can pull one together.

And it has a name that’s so catchy and easy to remember. And.... Let’s not forget, it’s free!

It’s a useful starting point for discussion, but it also leaves a lot to be desired. Here’s 5 reasons why it can’t be your only tool for developing growth strategy:

  1. Internal bias. A SWOT analysis is usually dominated by your internal view – your perceptions of your performance and market. It’s biased by whoever compiles the information. While you can incorporate market and customer research and data analysis into it, the basic structure itself doesn’t provide guidance on the best way to do that. There’s no obligation to verify your assumptions with data.
  2. No prioritization. It organizes strategic factors that impact your business, but it doesn’t prioritize them. There’s no guidance on how to evaluate the importance of each piece of data. Often the organization and relevance is determined by the author (see above).
  3. Doesn’t translate to action. A SWOT analysis doesn’t offer solutions. It’s up to the team to figure out how to take the SWOT summary from concepts on paper to ideas about solutions and ultimately all the way to implementation. There’s a risk of knee-jerk reactions based on a SWOT analysis… and there’s also the risk that no action will be taken as a result of a SWOT analysis.
  4. Aggregate and high level. Teams can spend an entire day collaborating on a SWOT analysis and generate a TON of information, but not all of it is useful for developing future strategies. Often, a SWOT is used to review an entire company, region, or product line, and “the customer�? is discussed broadly at the aggregate level. But the real opportunities and meaningful tactics are found within the granular details – not the global level. The risk of focusing at a high level is that you may create a strategy that works for everyone and ends up working for no one.
  5. It’s not used consistently. SWOT analyses tend to be used sporadically, so there’s the risk of missing changes in your market and not acting quickly enough. Usually, a SWOT analysis is a tool used early on in the strategy development process. It’s often used to as a reactive tool – to research an issue, new competitive threat, or trend that has been identified – not as a proactive monitoring tool.

It’s clear that SWOT serves a purpose – it draws attention to important factors impacting your business. But if it’s your only method for monitoring your position in a dynamic market with changing customer needs, then you’re opening yourself up to risk. Beating the market over and over requires constant vigilance and a nimble strategy.

An agile organization is constantly innovating, identifying and capitalizing on new opportunities, and evolving with the customer. Executives need new tools that show them where to focus and how to win. As my favorite chef, Emeril Lagasse, would challenge: “Let’s kick it up a notch!" We shouldn’t be using the same strategic tools our grandmother used – we deserve better.

So, let’s say goodbye to SWOT as more than a rudimentary view of our market and reframe our analysis from the customer's perspective. This begins by asking better questions:

  • How do customers make purchasing decisions?
  • What do customers think are your unique advantages?
  • What are your competitors' unique advantages (from your customers’ perspective)?
  • What are the current table stakes (points of parity) in the market?
  • What are unmet customer needs?
  • What are we doing that isn’t bringing value to customers? Can we stop doing these things?

While these questions are about as easy to answer as the SWOT questions, they have important strategic implications for growth – they direct our focus to actions that will result in more value for customers. For example, how do you build and defend our unique advantages?

Check out this post to learn more: Driving Growth With 9 Words (And A Picture).

Topics: General

Written by Vennli

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