The scourge of SWOT and other misused tools

One useful exercise to conduct with your students is to set them a task of identifying and classifying business tools, theories and techniques from the Business Management guide for the core level and also for higher extension. This list will help your students with revision, but also provide a useful checklist when writing extended essays, higher level projects and standard level commentaries.

The toolkit available to Business Management students is relatively extensive, but this is not evident in the extended essays and internal assessments presented each examination session. It is frustrating as a marker and moderator to be faced with a limited selection and application of tools and techniques, and even more so, when it is clear that students do not fully understand the tools and techniques that they are using and, indeed, why they are including them at all.

It appears that many students – and possibly many teachers –believe that all assessments should include a SWOT, even if the SWOT adds little to answering the research question posed. In many cases, students attempt to use a SWOT inappropriately to assess a strategy and/or a product. A SWOT analysis is a situational analysis conducted for a firm and as such may form the basis of an evaluation of a strategy, or the reasons for selling a new product or service, but not for assessing that strategy or product itself. In virtually all cases, the SWOT used for a strategy is no more than a list of advantages and disadvantages of implementing that strategy, masquerading as a SWOT. Even if the student constructs a SWOT for the firm, they frequently do not say what it is a SWOT of, in the title of the section.

There are further problems with the use of SWOTs:

  • Invariably, many student incorrectly place entries into the four quadrants. The major problem is that students include internal, controllable micro factors in the opportunities sections, such as opening a new branch or marketing a new product. These are NOT ‘Opportunities’ in a SWOT analysis. Opportunities and threats are external, uncontrollable macro factors (PEST) factors, such as changing demographics, or falling interest rates.
  • Once the student has prepared the SWOT, they can then use it to analyse and evaluate a strategy, such as expansion by linking the firm’s strengths to external PEST opportunities. Unfortunately, not only do many students prepare unnecessary and inaccurate SWOTs, but then do absolutely nothing with them… Here is a SWOT…!
  • SWOTs are often included with no evidence, data or sourcing. In fact, it is obvious that they are the unsupported assertions and opinions of the student, rather than a summary of the views of expert others.
  • Detailed SWOTs are often placed in the appendices with little reference in the main body of the essay, report or commentary. ‘See appendix one for the SWOT’. This is NOT acceptable as it is an attempt to avoid the word count. Only the description, analysis and evaluation of the SWOT entries in the main body can be assessed.

Please advise your students that a SWOT must have a purpose, and in most cases it would be advisable to link the SWOT to a PEST analysis. This linkage should provide the basis of relevant analysis, synthesis and evaluation.

Even better, may be to advise your students to consider other underused tools, techniques and theories that may be effecively employed to answer the research question, such as:

  • Investment appraisal
  • Break-even analysis
  • Cash flow forecasts
  • Decision trees
  • Fishbone or other decision-making tools
  • Depreciation

Like any toolkit, tools and techniques are likely to be more effective in addressing and answering a research question, when combined, rather than presented in isolation.

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