INSIGHTS

SWOT is the new SWOT

Based on the article ‘Are Your Company’s Strengths Really Weaknesses?’ By Adam Brandenburger, published on August 22, 2019 in Harvard Business review

 Strengths are strengths, and weaknesses are weaknesses. In a stable environment where technologies and market structure remain constant, this is true. Still, we all know that the environment is far more permanent and, in such situations, the right way of looking at the business world should be different, dynamic, and one that challenges our thinking.

A new look method must be adapted to perform a situation analysis in the dynamic world- the inverse SWOT model. The disadvantage of traditional SWOT analysis is that it does not take into account the dynamics of the environment in which we live today. The new model recognizes that threats and opportunities can be both external and internal and can be shaped by the strengths and weaknesses of the organization itself and its competitors.

The new model has two major changes from the classic model: looking at competitors’ strengths and weaknesses, and looking at the weaknesses as opportunities, and the strengths as threats.

Your organization’s strengths and weaknesses:

Strength that becomes a threat- when core competence becomes core toughness, preventing the organization from moving forward with changing conditions every day. People in management who have served the organization in the past can now become an obstacle to new projects.

Weakness that becomes an opportunity- Leveraging a weakness for competitive advantage. For example. Space X, a space technology company with significantly lower budgets than its competitors were able to impart development and acquisition capabilities that made it substantially more competitive.

Your competitors’ strengths and weaknesses:

Competitor strength that becomes an opportunity- The idea that a competitor’s strength can be an opportunity appears in many areas. For example, in the judo martial arts, learners are taught to use the competitor’s weight and strength against him.

In the past, Pepsi used this approach to challenge the leading company of the time, Coca-Cola, as they worked on many strategies that Coca-Cola dislikes, such as lowering prices, presence on ‘cheap’ networks, and more.

Competitor weakness that becomes a threat- Imagine a situation where your business focuses on its key customers. A competitor- perhaps a new competitor- invests in technology that is weak in some critical dimensions of your business but influential in many aspects that are important to a small portion of your customers. Before you notice it, you’ll start losing mainstream customers who appreciate the new dimensions a competitor has to offer.

 

In today’s fast-changing world, it is important to be flexible and constantly challenge the mind to choose the better alternative. With the new SWOT model, important questions can be asked that lead to meaningful solutions.

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