The mistakes people make in SWOT analysis

Most product managers claim to have made a thorough S.W.O.T (Strength,Weakness,Opportunities and Threats) analysis by just comparing the product features and offerings. This is a myopic view in my opinion. A thorough S.W.O.T analysis covers the entire spectrum of the Marketing abilities, Financial strength, Manufacturing abilities and Organizational strength. Analyzing this complete spectrum reveals and provides much more insight into the competitor than just comparing product features. Kotler and Keller in their book on Marketing Management have listed the following items in order to complete a S.W.O.T analysis.

Marketing			Finance
1. Company reputation			1. Cost or availability of Capital
2. Market share			2. Cash flow
3. Customer satisfaction			3. Financial stability
4. Customer retention
5. Product quality
6. Service quality
7. Pricing effectiveness
8. Distribution effectiveness
9. Promotion effectiveness
10. Sales force effectiveness
11. Innovation effectiveness
12. Geographical coverage

Manufacturing			Organization
1. Facilities			1. Visionary, capable leadership
2. Economies of scale			2. Dedicated employees
3. Capacity			3. Entrepreneurial orientation
4. Able, dedicated work force			4. Flexible or responsive
5. Ability to produce on time.
6. Technical manufacturing skill

This full spectrum analysis as can be seen gives us a much more detailed picture of our strengths and weaknesses than just comparing the product features. Let's take a large internet company competing against their startup rivals as an example. While the startup company may be agile, nimble and very responsive to market needs it may lack the large network of users, financial strength and distribution strategies to capture the market. This insight is much more helpful in developing a strategy rather than taking the small company head on with a one-one feature parity. Doing a complete analysis can save you the headaches of adopting a bad strategy and help you in channeling your team's energy in the right direction.