A SWOTT analysis is usually conducted as a brainstorming session. Because it's a brainstorming session the answer thrown out are opinions and impressions the participants have of the company and its situation. This means there aren't any substantiating facts to backup what is defined as a strength, weakness, opportunity, threat or trend. Which means a SWOTT is a biased opinion of the organization. Does the fact that a SWOTT is a biased analysis of the organization diminish its usefulness?
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To significantly impact company performance, business
decisions must be based on reliable, relevant and comparable data. However,
SWOT data collection and analysis entail a subjective process that reflects the
bias of the individuals who collect the data and participate in the
brainstorming session. In addition, the data input to the SWOT analysis can
become outdated fairly quickly.
SWOT analysis creates a one-dimensional model in which each
problem attribute is viewed as a strength, weakness, opportunity or threat. As
a result, each attribute is seen to have only one influence on the problem
being analyzed. However, one factor might be both strength and a weakness. For
example, locating a chain of stores on well-traveled streets that grant easy
access to customers might be reflected in increased sales. However, the costs
of operating high-visibility facilities can make it difficult to compete on
price without a large sales volume.
SWOT analysis leads to four individual lists of strengths,
weaknesses, opportunities and threats. However, the tool provides no mechanism
to rank the significance of one factor versus another within any list. As a
result, any one factor's true impact on the objective can't be determined.
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Jul 19th, 2015
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