While many businesses use SWOT analysis, the results can actually be misleading. What are 3 things companies can do in order to perform a successful SWOT analysis?
1) First, in laying out each of the four elements of SWOT, internal and external factors should not be confused with each other. It is important not to list strengths as opportunities, for example, if executives are to succeed at matching internal and external concerns during the idea generation process.
2) Second, opportunities should not be confused with strategic moves designed to capitalize on these opportunities.
3) Finally, and perhaps most important, the results of SWOT analysis should not be overemphasized. SWOT analysis is a relatively simple tool for understanding a company's situation. As a result, SWOT is best viewed as a brainstorming technique for generating creative ideas, not as a rigorous method for selecting strategies. Thus, the ideas produced by SWOT analysis offer a starting point for executives' efforts to craft strategies for their organization, not an ending point.