A careful listing of a firm's strengths, weaknesses, opportunities, and threats.
Why do managers rely on SWOT?
Top managers rely on SWOT to stimulate self-reflection and group discussions about how to improve their firm and position it for sucess. But it should only be a starting point!
What are some limitations of SWOT?
Strengths May Not Lead to an Advantage
SWOT's Focus on teh External Environment is Too Narrow
SWOT Gives a One-Shot View of a Moving Target
SWOT Overemphasizes a Single Dimension of Strategy
Explain how "Strenghts may not lead to an advantage".
No matter how unique or impressive the strengths/capabilities may not enable it to achieve a competitive advantage in the marketplace. If a firms builds its strategy on a capability that cannot create or sustain comp adv than it is wasted resour.
Explain how "SWOT's focus on the External Environment is too narrow".
Relying on traditonal definitions of comp env often causes failure to notice important changes on the periphery of their environment that may trigger the need to redefine industry boundaries and identify a who new set of competive relationships.
Explain "SWOT gives a one-shot view of a moving target".
Primarily a static assessment. As circumstances, capabilities, and strategies change, static analysis techniques do not reveal the dynamics of the competitive environment.