The aim of this paper is to critically evaluate the SWOT analysis as one of popular tools in marketing. SWOT analysis is an analysis method of identifying all external and internal factors for organization strategies (Rauch, 2007). It is considered in this paper that though SWOT analysis has limitations, it can be improved to be more effective as its development. This paper firstly focused on the definition of SWOT analysis. And then it discussed the context of the SWOT analysis including its evolution and its applications. Followed by, the paper introduced two relevant practice cases based on SWOT analysis. Next, the critical evaluation of SWOT analysis was presented with both advantages and disadvantages. Finally, the paper drew its conclusion. Definition
As Sara Cullen (2005) defined that SWOT analysis is “a tool used for many purposes in business. The acronym stands for strengths, weaknesses, opportunities, and threats”. It is an organized analysis to measure the business strategic position aiming to recognize its strengths, weaknesses, opportunities, and threats (Jobber 1947- c2007:47). The organisation treated strengths and weaknesses as an internal appraisal and the opportunities and threats as an external appraisal (Kotler, 2005：58). As the internal appraisal, organisations can considered the aspects of the organisation covering as much as possible such as personnel, facilities, location, products and services to find their strengths and weakness (Dyson, 2004). By identifying the external appraisal such as political, economic, social, technological and competitive environment organisations can acquire the opportunities and threats (Dyson, 2004). By identifying all the factors, the organisations can make their strategic decisions by developing strengths, eliminating weaknesses, exploiting opportunities and countering the threats (Dyson, 2004). And SWOT analysis is the simple approach of combining the outcomes of marketing audit. As Jobber (1947- c2007: 47) states that the internal appraisals are concluded when they integrate the external capabilities. The context of SWOT analysis
The evolution of SWOT analysis
SWOT analysis originates in the 1960s (Learned et al., 1965). It stemmed from the research the Stanford Research Institute conducted by Marion Dosher, Dr Otis Benepe, Albert Humphrey, Robert Stewart, Birger Lie from 1960-1970 for the need to identify why corporate planning failed (Chapman 1995-2012). Then another research, which carried on from 1960 through 1969 to find what was going wrong with corporate planning and achieve relevant solutions discovered the SOFT analysis. In 1964, Long Range Planning seminar held in Zurich Switzerland, Urick and Orr proposed SWOT instead of SOFT by changing F that stands for fault to W short for weakness (Chapman 1995-2012). After that, the Britain started its initial promotion, and the usage of the SWOT analysis quickly be identified among strategic managers and consultants in institutional organizations all over the world (Thakur, 2010). In 1966, in order to analyse “Erie Technological Corp” in Erie Pa, the first prototype was tested and published and in 1970, the prototype came to the UK, and had been completed by 1973(Chapman 1995-2012). Furthermore, modern textbooks on strategy still have included SWOT analysis, though they have limitations about its application (Hill and Westbrook, 1997). According to Chapman (1995-2012), “the process has been used successfully ever since and now, this system has been fully developed, and proven to cope with today's problems of setting and agreeing realistic annual objectives without depending on outside consultants or expensive staff resources”. However, as a tool for current situational analysis, there is a drawback in SWOT analysis because it is difficult to trace (Takahashi, 2011). Therefore, in 1982, Heinz Weihrich developed the SWOT analysis to the TOWS...