SWOT: does anyone besides MBA professors and consultants use it?

IS THERE ANY BENEFIT OF SWOT OUTSIDE MBA

CLASSROOMS?Based onhttp://www.bscdesigner.com/swot-outside-mba-classrooms.htmBy Aleksey Savkin

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BSC STRATEGY MAP NEEDS AN INPUT

• How are we supposed to get this input?

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BSC’ STRATEGY MAP NEEDS AN INPUT

• How are we supposed to get this input?• How can one come up with a strategy?



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BSC’ STRATEGY MAP NEEDS AN INPUT

• How are we supposed to get this input?• How can one come up with a strategy?• One of the business frameworks is SWOT analysis.



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Is there any benefit of SWOT outside MBA classrooms?

Source: www.bscdesigner.com



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The best business insights are rather spontaneous breakthroughs based on

the experience of my team.




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Use SWOT analysis! It allows me to sell consulting services to any company without any learning of

its products and service.





So what?



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Use SWOT analysis! It allows me to sell consulting services to any company without any learning of

its products and service.





SWOT! So what?



SWOT AND ITS MODIFICATIONS

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THE VISUAL RERESENTAION OF SWOT ANALYSIS

The SWOT acronym stands for :



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Strengths and weaknesses are considered to be “internal,”



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Strengths and weaknesses are considered to be “internal,”

while opportunities and threats are “external.”



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TOWS - A DIFFERENT WAY TO PRESENT

A different acronym of the same words - threats, opportunities, weaknesses, and strengths



BAD NEWS. SWOT DOSEN’T WORK


• At least not in a real business environment.


• At least not in a real business environment.• Authors of the research ”SWOT Analysis: It’s Time for a

Product Recall” investigated SWOT empirically.


• At least not in a real business environment.• Authors of the research ”SWOT Analysis: It’s Time for a

Product Recall” investigated SWOT empirically.• They interviewed executives of 20 UK manufacturing

companies that used SWOT.

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THE RESULTS OF THE RESEARCH

• SWOT analysis typically helped to generate a long list of various factors



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• These factors in most cases were meaningless for a business



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• These factors in most cases were meaningless for a business

• Found factors were neither prioritized nor verified



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THE MAIN CONSEQUENCE

• None of these companies used the outputs for a future strategy design

• 20 UK manufacturing companies is obviously not a representative sample



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A CRITIQUE OF THE RESEARCH

• Executives could not truthfully say that



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• Executives could not truthfully say that • They were not influenced in any way by the results of

the SWOT-based brainstorming



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• If you will read an original article



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• If you will read an original article• You will agree that something is wrong with SWOT



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• If you will read an original article• You will agree that something is wrong with SWOT• It is not a magic pill like it is promoted by strategy

consultants



WHY IS SWOT SO POPULAR THEN?

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INFO-PRODUCTS ON SWOT

• The results of SWOT analysis for virtually any company from the Fortune 500 list



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• These reports were not prepared by the company’s executives



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• These reports were not prepared by the company’s executives

• They have nothing to do with an actual strategy design process



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• In most cases these reports work as front-end products



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• They are supposed to attract the attention of prospects to some consulting business.



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• They are supposed to attract the attention of prospects to some consulting business.

• Consulting boutiques are the biggest beneficiaries of the SWOT magic pill



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SWOT AS A MAGIC PILLS FROM CONSULTANTS

• SWOT analysis allows them to sell consulting services to any company without a deep learning of its products and service.



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SWOT AS A MAGIC PILLS FROM CONSULTANTS

• SWOT analysis allows them to sell consulting services to any company without a deep learning of its products and service.

• Consultants can focus on asking “right” questions and generating long lists of factors and ideas.



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SWOT IN MBA CLASSROOMS

• SWOT analysis is popular in MBA classrooms



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• SWOT analysis is popular in MBA classrooms• Lectures pay too much attention to SWOT in the

classroom



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• SWOT analysis is popular in MBA classrooms• Lectures pay too much attention to SWOT in the

classroom• A result managers see SWOT as a panacea to any

business problem



SWOT FROM INPUTS TO THE RESULTS

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SWOT INPUTS

• It assumes that the business situation is stable enough



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SWOT INPUTS

• It assumes that the business situation is stable enough

• Another assumption is that inputs are supposed to appear during the brainstorming



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SWOT PROCESS

• The SWOT analysis cannot be underestimated as a brainstorming method



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SWOT PROCESS

• The SWOT analysis cannot be underestimated as a brainstorming method

• SWOT doesn’t give us any method to make an informed assumption



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SWOT OUTPUT

• As any brainstorming method, SWOT generates a list of ideas.

• Another problem with SWOT outputs is that the resulting ideas are given in a list.



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AUTOMATION OF SWOT

• There is no need for an automation of SWOT.



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AUTOMATION OF SWOT

• There is no need for an automation of SWOT.• Using paper and pen to put down ideas that come up

brainstorming



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AUTOMATION OF SWOT

• There is no need for an automation of SWOT.• Using paper and pen to put down ideas that come up

brainstorming• Users of BSC Designer can apply ”Framework – SWOT

and TOWS.bsc” from “Sample Scorecards” folder of BSC Designer installation to support their SWOT analysis.



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AUTOMATION OF SWOT

Find this project in “Sample Scorecards” folder of BSC Designer installation.



TWO MAJOR FLAWS OF SWOT

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• Two words “customers” and “education.”



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• Customer is not directly involved in this framework



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• Customer is not directly involved in this framework• Education is a big deal of finding and “seeing” these

opportunities



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• Customer is not directly involved in this framework• Education is a big deal of finding and “seeing” these

opportunities• This process should be run even before getting the

team to brainstorm any ideas.



A BOTTOM LINE

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A BOTTOM LINE

• The obvious benefit is that SWOT gives another perspectives to see the business and its environment.



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A BOTTOM LINE


• This perspective works great for academic exercises in MBA classrooms,



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A BOTTOM LINE


• This perspective works great for academic exercises in MBA classrooms,

• but cannot help much with finding a better strategy in complex and uncertain real-life situations that business faces every day.



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A BOTTOM LINE

• SWOT analysis depends a lot on the experience of the team that is using it.



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A BOTTOM LINE


• The framework provides a different perspective,



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A BOTTOM LINE


• The framework provides a different perspective,• but at the same time it shifts the focus from a

customer.



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A BOTTOM LINE

• The list of generated findings could have been much more useful if these insights could be linked to each other by cause-and-effect connections.



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A BOTTOM LINE

• SWOT is a main academic tool used in the quest for a good strategy.



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A BOTTOM LINE


• Executives will continue to use the method even if empirical evidence shows that it is not working.



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A BOTTOM LINE


• Executives will continue to use the method even if empirical evidence shows that it is not working.

• Hopefully, in good hands this business framework will generate some valuable insights.



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A BOTTOM LINE

• What is your experience with SWOT?



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A BOTTOM LINE

• What is your experience with SWOT?• How did it help you with strategy planning?



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• [1] “SWOT Analysis: It’s Time for a Product Recall” Roy Westbrook, Terry Hill (1997) Long Range Planning, 30 (1).

• [2] “Stop SWOT’ing The Small Stuff” Dave Lavinsky, 2013, Forbes

• [3] “Marketing Myopia” Theodore Levitt, 1960, Harvard Business Review.

RESOURCES



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MORE ABOUT THE BALANCED SCORECARD

Find more insightful articles about the Balanced Scorecard in ”Articles” section at www.bscdesigner.com

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http://www.bscdesigner.com/balanced-scorecard-articles.htm



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THANK YOU!

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SWOT: does anyone besides MBA professors and consultants use it?

Business

Transcript of SWOT: does anyone besides MBA professors and consultants use it?