SWOT Analysis Is Deeply Flawed and Should Not Be Applied as a Modern Marketing Tool - Essay Example

?SWOT ANALYSIS IS DEEPLY FLAWED AND SHOULD NOT BE APPLIED AS A MOBERN MARKETING TOOL Marketing Introduction Marketing involves making the ideas, services or goods produced by an organization accessible by the targeted consumer. In bid to achieve this objective of marketing, marketing tools that have developed aimed at assisting the organization to make the most viable decision. One such marketing tool is the use of SWOT analysis. This is a grid presentation of an organizations’ internal environment and external environment. From the internal environment, the organization compares its Strengths against its Weaknesses while from the external environment, the organization compares its Opportunities against its Threats hence the name SWOT. This analysis is mainly used in strategic management where that organization aimed at having a competitive advantage from its competitors and it is continuously reviewed. SWOT analysis has been upheld by many organizations, its benefits explored and also its weakness criticized (Evans, and Wright, 2009, p. 10). It is in this bid that this paper will be committed to discussing the thesis statement: SWOT analysis is deeply flawed and should not be applied as a modern marketing tool. Figure 1 The Inherent Weaknesses of SWOT Analysis To begin with, SWOT analysis is flawed as a marketing tool since it does not provide with all the information that is required by managers for strategic planning. From the face value, SWOT analysis is perceived by many people as an easy process. This is since all that a business is expected to do is implement the four quadrant SWOT analysis in the business. This is where the business capitalizes on its opportunities and strengths while mitigating its weaknesses and threats. However, this is not easy and critical information necessary for making marketing decisions is overlooked by the SWOT analysis. It is flawed since it does not separate this information from the pivotal information that the organization needs to embark on immediately and the peripheral information that can be addressed. This translates to misplaced priorities as the marketing team will be more focused in exploiting the opportunities yet there are some threats that if not dealt with immediately will translate to massive losses. Moreover, as pertains to the SWOT analysis, it does not provide a guideline that shows which customer base is the most attractive, which strategy is the most powerful. Lack of guidelines as pertains to the results obtained from carrying out a SWOT analysis makes it flawed and hence should not be applied as a modern marketing tool (Valentin, 2001, p. 58). Subsequently, SWOT analysis is deeply flawed and should not be used as a marketing tool since it is a checklist to evaluate the performance of the strengths and weaknesses identified upon carrying out a SWOT analysis. This is evidenced with an illustration of an example of a strength that has been identified by a business upon carrying out a SWOT analysis as a marketing tool. A business has identified its leadership in market share as strength for the benefit of the organization. On face value, this looks productive since positive correlations have been documented to exist between leadership in market share and the profitability of the organization. The business consequently surges forward to exploit the strength, without bearing in mind the minute details of leadership in market share leadership that may affect the performance of the business. The organization by relying on the SWOT analysis fails to assess if leadership in market share is relevant to the organization and if the investment made by the organization is feasible. Use of checklist in SWOT analysis makes it a flawed marketing tool due to lack of leverage of the decisions made and hence not a good modern marketing tool (Kotler, 2000, p. 78). Moreover, SWOT analysis is deeply flawed and should not be used as a marketing since it has been described as being vague and simplistic. This is evidenced by the structure of the SWOT analysis. When managers are asked to conduct a SWOT analysis for strategic planning of an organization, they perceive it as a simple process since all that is required is the review of the organizations internal and external environment. Strategic marketing is aimed at giving the organization a competitive edge than its competitors and this can only be done if the organization is able to perform an activity that other organizations cannot. However, due to the simplicity of the SWOT analysis, it can be conducted by anyone, hence reducing the essence of strategic management. The lack of strategic touch in SWOT analysis due to its simplicity makes it flawed and hence should not be applied as a modern marketing tool (Helms, and Nixon, 2010, p. 215). In conjunction, SWOT analysis is a flawed marketing tool since it heavily relies on the thorough brain storming of the strategic managers. This makes SWOT analysis a subjective marketing tool that is subject to bias hence not an effective modern marketing tool. This is affirmed by the prospect that for a SWOT analysis to be carried out, the top level managers need to brain storm on the Strengths of the organization, Weaknesses, Threats and Opportunities. This needs to be backed up with empirical data since it influences the strategic decision that the organization does. This makes it more of a subjective marketing tool than an objective tool since what matters is what the managers feel serves as the SWOT category of strategic marketing. This makes it open to bias by the top level managers especially if they want to perpetuate fraud in the organization. Since it is that document that is used for decision making by the organization, it should be an objective document supported by results that are undisputable and not based on an individual’s opinion. By the fact that SWOT is a subject tool and may create a loophole for bias in decision making, it should not be applied as a modern marketing tool (Helms, and Nixon, 2010, p. 215). Additionally, SWOT analysis is a flawed marketing tool as pertains to the categorization of variables involved in the analysis. SWOT analysis has four variables: strengths, weaknesses, opportunities, and threats. This marketing tool has the assumption that the marketing initiatives by an organization can competently be classified in only these four variables. Also, the variables are not constant and change depending on the decision made by the organization. For example, if an organization delays in exploiting an opportunity, and its competitor uses the opportunity before that organization, this opportunity becomes a threat to the organization. It also becomes quite difficult to determine the internal and external environment, especially as pertains to the threats and weaknesses of an organization. Also, issues like technology are not easily classified since the incubation period is long and a hasty decision of foreseeing a threat may deny the organization long term benefits. The lack of constancy of the variables involved in SWOT analysis makes it flawed and hence should not be used as a modern marketing tool (Hosseini-Nasab, Hosseini-Nasab, and Milani, 2011, p. 23). In affirmation, SWOT analysis is a flawed marketing tool due to the difficulty experienced as pertains to the classification of challenges of an organization. This is especially as pertains to telling apart a threat to the organization from an opportunity. It has been documented that it is very easy for threats that an organization has identified to turn into opportunities. However, catastrophes that impede an organization and real problems being experienced by an organization cannot be termed as opportunities. Also, there is a challenge is assessing the strengths and the opportunities that an organization. This is termed as the circularity of the SWOT analysis as a marketing tool that makes it flawed. To assess the strengths of the organization, it in needed that the opportunities that the organization needs to capitalize on to reveal its threats are evaluated. Moreover, to evaluate the opportunities, the strengths of the organization need to be reviewed; illustrating the circularity of the SWOT analysis. Inability to effectively classify challenges and circularity of SWOT analysis makes it a flawed marketing tool and hence should not be applied in modern marketing (Morris, 2005, p. 54). Consequently, lack of SWOT analysis to give a strategic direction has been cited as an issue that makes it flawed and hence it is not an effective tool modern marketing. SWOT analysis has been citied a sending once the variables have been listed in a grid and the opinions of the top level management listed under each variable. It has thus been termed as a list of variables and not as a strategic marketing tool. After listing the variables, it does not go ahead to explain to the management how to proceed to exploit the opportunities and threats or how to mitigate the weaknesses and the threats. This has made the SWOT analysis tool to be termed as half baked and not a comprehensive tool to be implemented in marketing. Consequently, it involves more than one strategic management tool since the information that the SWOT analysis tool of marketing produces is not conclusive. The lack of conclusiveness of the SWOT analysis and lack of delineating a strategic direction makes it a flawed tool of marketing and hence should not be applied in modern marketing (Dincer, Tatoglu, and Glasiter, 2006, p. 206). In concurrence, SWOT analysis should not be used in modern marketing since it lacks prioritization of the variables. The variables having been listed in the SWOT grid, the influences of the variables are listed below the variables majorly in bulleted form. No specific formula of listing is used since all that matters is that the SWOT of the organization is addressed. Bearing in mind that there are limited resources in an organization, this is not the most profitable tool for a marketing organization. This is since the managers rely on intuition on determining the priority variable and not on factual and evidence based information. This leads to haphazard implementation of the variables and not bearing in mind the priorities of the organization. The lack of prioritization of the variables in the SWOT analysis makes it flawed and hence should not be used as a marketing tool (Hosseini-Nasab, Hosseini-Nasab, and Milani, 2011, p. 23). Also, SWOT analysis is flawed marketing tool since it focuses so much on the SWOT rather than focusing on the performance of the organization. Ideally, an organization emphasizes on its marketing since it wants to improve on its previous performance by having more returns. This serves as the basis of planning for any organization and it mainly compares current performance with past performance and recommendations made. However, SWOT analysis dies not analyze the performance of the organization as it addresses the SWOT. Lack of analysis of performance in SWOT analysis makes it a flawed marketing tool and hence should not be applied in modern marketing (Panagiotou, 2003, p. 8). Conclusion SWOT analysis is an essential tool in marketing that has been used for a long time in a marketing tool due to its enormous benefits. However, it is a marketing tool that has been plagued with flaws making it a tool that cannot be used in modern marketing. Its flaws include: circularity, lack of strategic direction, variables are not arranged in terms of priority, focuses on SWOT rather than on performance of the organization. Moreover, SWOT analysis is a subjective document. However, this paper recommends that rather than abandoning the SWOT analysis, recommendations can be made that aim at making SWOT analysis more efficient. This involves inculcating evidence base in SWOT analysis making it a more credible tool to be used in modern marketing. (Word count= 1914) Bibliography Evans, C and Wright, A 2009, “How to conduct a SWOT analysis,” The British Journal of Administrative, Vol. 24, pp. 10-34. 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Appendix Retrieved from: Helms, M.M. and Nixon, J. 2010, "Exploring SWOT analysis - where are we now?" Journal of Strategy and Management, vol. 3, no. 3, pp. 215-251. Read More