Strengths and weaknesses of the SWOT tool for place-related analysis

SWOT analysis according to wikipedia

by Ares Kalandides

I am sure most of us have already used some kind or other of a SWOT model to analyse something. In my business it is often used as an analytical tool to understand “places”, where they stand and what should be developed, but also to foresee possible changes.  The people who pay us to do the job love SWOTs: they are clear, schematic, straightforward, unambiguous. But social reality is rarely any of the above. I would like to share with you my thoughts, after having used SWOT analysis for many years, and I would love to hear yours.

SWOT as an instrument was developed in a business environment. It is used to identify factors (favourable/unfavourable and internal/external) that influence the success in reaching an objective. I have used SWOT in my own (small) business and I must say it has worked rather well. Yet, I have found it increasingly difficult to use it in a similar way to analyse places.

First of all, places are not really businesses, though I admit that it can sometimes make sense to look at them that way. Nonetheless, in order to do that we need to simplify, reduce and abstract. This may be helpful in looking at single factors, but we risk missing the forest for the trees. Places are not simply the sum of the elements that constitute them.

With most social phenomena, it is hard to find straightforward causal relations, e.g. A is the cause of B, not only because A doesn’t come alone, but also because there is often a reverse process taking place (where B causes A after A has influenced B), that makes that relation circular. Talented people leave a place because there are no jobs and no jobs are created because there are no talented people to do them (the typical case of brain-drain). Does it mean that if I manage to get more talented people around, then more businesses will follow? Hardly. So is it the chicken or the egg? The more complex the question, the more complicated the answer.

Yet, in order to create a SWOT analysis I need this type of causal relation. The “OT” part is about hypotheses: “If X external thing happens, then what are our chances and opportunities”?  And as I just said, it rarely works like that. But even if we accepted that we can answer the question (in a business environment I think it is easier), it still presupposes that you already have an objective and you assess the impact of external factors for that objective. Doesn’t that mean that first you have the objective and then you do the SWOT? In that sense it is not really an instrument that helps you find your goal, but can rather be used as a strategic tool to design your next steps after you have defined a goal.

There is one more thing. It is not always very easy to say what is a Strength and what a Weakness in place, because it also depends very much on the “who” or “for whom” question. For example: at the moment, we are analysing an area of lignite mines in the German state of Brandenburg (s. blog entry here). Are the mines Strengths or Weaknesses? For the workers in the mines, they are the source of their daily bread and of that of their families, for others they are the destruction of nature – and I could give you a lot more. High unemployment is horrible for the unemployed and those around them, but some companies may be very happy to be able to choose at low wages when unemployment is high. So is unemployment a Strength or a Weakness? It depends on whether you are the unemployed or the business.

Of course I could analyse unemployment (or the mines) and see what it means in terms of SWOT, but then I am not really analysing the place, am I? Even if I were able to break down the place to the trillions of elements that make it up and SWOT each one of them, I would still not know how these things come together in place, will I?

These are open questions I have here, mostly from my own work and 20 years of professional experience. I’d be glad to hear your experiences and thoughts on the subject. I have a presentation tomorrow and the institution that commissioned us is expecting a SWOT analysis of the place…

About Ares

Ares Kalandides holds a PhD in Urban and Regional Studies from the National Technical University of Athens. He is the founder and CEO of Inpolis, an international consultancy based in Berlin, Germany and has implement several projects around the world. Ares teaches Urban Economics at the Technical University in Berlin and Metropolitan Studies at NYU Berlin.
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7 Responses to Strengths and weaknesses of the SWOT tool for place-related analysis

  1. Ares, I found your reflections on the use of SWOT analysis for destination management and marketing is interesting.

    I think your statement: “….it still presupposes that you already have an objective and you assess the impact of external factors for that objective. Doesn’t that mean that first you have the objective and then you do the SWOT? In that sense it is not really an instrument that helps you find your goal, but can rather be used as a strategic tool to design your next steps after you have defined a goal”, reflects my experience of how SWOT analysis is most often used.

    For me the value of SWOT analysis is as a tool in helping to test the objective and defining the responses required in action planning. Defining the objective or vision for a place in terms of economic development given the multi-faceted nature of places and multitude of environmental factors at play, requires a combination of detailed analysis and evidence and the gathering of the perspectives of many players with an understanding of that community.There has to be room to enable thinking out of the box and stimulating real inspiration and vision too.

  2. Daniela says:

    I agree with you, I think it’s really hard to define exactly all the elements and you have to consider who is making the analysis, his point of view.
    Still,SWOT analysis it’s the first step to see where you want go, You have just to be conscious of its limits

  3. fereshteh says:

    You are quit correct.Analysis is a dynamic process,which depends on many factor,who is analyzing,what the goal and objective is,in which environmental condition analysis is going to happen,understanding of that community who are going to be analyzed.But still Swot analysis is still valuable for finding the way for next step design.

  4. Tom Buncle says:

    Interesting and thought-provoking discussion, Ares. You have identified the challenge – “a strength/weakness for whom?”

    I find that the answer is to do a separate SWOT for each segment, having identified a clear business objective in relation to each. Thus, you may have mines as a strength in terms of the workers and an economic development objective, but as a threat in terms of a sustainable environment for the local community. That way, you can manage 2 conflicting ideas at the same time, which I once heard described as a sign of mature intelligence. If you then need to do an overall SWOT, you can also have the same aspect as both a strength and a threat, as long as it is defined in relation to those for whom it is a strength/weakness. At the end of the day, a SWOT can only do so much. As Ken says, it is how it is intrepreted/applied in light of the over-riding strategic objective that counts.

    • Ares says:

      Thank you very much, Ken. This is quite helpful, as the challenge we usually face is that our client wants SWOTs as an analytical tool. I find, it can be very useful in triggering thought (by introducing the “for whom” element), but quite poor as an overall analysis tool.

      • Ares says:

        And I am not talking about businesses (where I can see its value), but about places (regions, etc.)

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