Limitations of SWOT Matrix

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Posted by James Freeman |
It is undeniable that SWOT analysis is a great tool but also has some limitations. This article is a simple introduction of SWOT matrix disadvantages.

Since SWOT analysis is not a third party analysis, subjectivity is hard to avoid. Furthermore, it is likely to cause organizations to consider situations to be excessively simple. Another point worth mentioning is that it's hard to address uncertain or two-sided factors, such as factors that could either be a strength or a weakness or both (e.g. you might have an advantageous office location, but the rent may be rather expensive), with a SWOT analysis.

According to the SWOT Matrix framework, we can list its disadvantages from internal and external perspectives.

1. External factors that are not in control of management. They contain:

  1. Price fluctuation
  2. Raw material sources
  3. Government legislation
  4. Economic environment
  5. Import restriction

2. Internal limitations mainly lie in: Insufficient research and analytical facilities

  1. Faulty products due to poor quality control
  2. Poor industrial relations
  3. Lack of skillful and efficient labor

In other words, a SWOT analysis may be limited because it:

  1. Doesn't prioritize issues.
  2. Doesn't offer solutions or present alternative decisions.
  3. May generate too many ideas but not help you choose which one is best.
  4. May include a lot of information, but not all of it is useful.

Therefore, it is necessary for users to understand this tool in a comprehensive way to make the best of it. Avoiding its limitations will help you give full play to its strengths better.

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