Almost every DMO nationwide uses a SWOT analysis somewhere in their organization. Be it a strategic plan, a tourism development plan, or a marketing plan. SWOT analysis has become a standard insert for decades. But has it been used well, how influential is it in shaping organizational strategy, and is it time to rethink this standard plan element?
A Bit of History
SWOT analysis was created in the 1960s by Albert Humphrey, a management consultant at the Stanford Research Institute (SRI) in California, USA. It was initially developed as part of a research project to understand why corporate planning failed in some companies while succeeding in others. SWOT analysis gained popularity over time and has become a widely used tool in strategic management and planning.
Initially, SWOT analysis was used primarily in business settings, but it quickly gained popularity and expanded to other domains, including education, healthcare, and personal development. It can be a valuable tool for organizations and individuals to assess their current situation and make informed decisions about future strategies.
While many DMOs go through the process of developing a SWOT, it often has become a superficial element in a plan. Once developed, its impact is rarely felt in shaping strategy. Is it time for DMOs to rethink doing a SWOT analysis? The analysis does have its limitations and potential flaws. Here are some of the common problems associated with SWOT analysis:
1. Over-simplification: SWOT analysis provides a simplified framework for evaluating internal and external factors. However, this simplicity can sometimes oversimplify complex issues, overlooking important nuances and interdependencies.
2. Lack of prioritization: SWOT analysis does not inherently prioritize the identified factors. It treats all strengths, weaknesses, opportunities, and threats equally without considering their relative significance or impact. This can make it challenging for a DMO to focus on the most critical factors.
3. Subjectivity: DMO SWOT analysis heavily relies on subjective judgment and individual perspectives. Stakeholders interpret the same factors differently, leading to biased assessments and inconsistent results.
4. Lack of context: SWOT analysis does not provide a detailed context for the identified factors. It may not consider the specific tourism industry dynamics, market trends, or competitive landscape, which are crucial in strategic decision-making.
5. Lack of actionability: While SWOT analysis identifies strengths, weaknesses, opportunities, and threats, it does not provide a clear roadmap or actionable steps to address them. It is up to the DMO to translate the analysis into actionable strategies and plans.
6. Incomplete information: SWOT analysis relies on the available information at a given time, which may not always be comprehensive or current. It continuously updates and validates the analysis with current and accurate data.
7. Lack of quantitative analysis: SWOT analysis primarily focuses on qualitative factors and does not incorporate quantitative analysis. This can limit its ability to assess the potential impact or likelihood of identified factors precisely.
8. Lack of Depth: SWOT analysis provides a high-level overview of the internal and external factors affecting a DMO. It may not delve deep enough into specific details and nuances that could impact decision-making.
9. Limited Future Orientation: SWOT analysis primarily focuses on the current situation and may not adequately consider future trends or potential changes in the market. This can hinder long-term strategic planning.
10. Overemphasis on Internal Factors: SWOT analysis tends to give more weight to internal factors (strengths and weaknesses) than extractors (opportunities and threats). This imbalance can lead to a narrow perspective and a missed understanding of the market dynamics.
Why should you consider trying other strategic tools in place of SWOT?
DMOs in the tourism industry often copy other DMOs, be it a website creative direction, advertising campaigns, content development, etc. Pick any ten destination websites, and you will see the similarities. For this reason alone, an intelligent DMO will want to consider a new approach. If everyone in the industry uses the same tool as a SWOT analysis, it means everyone is looking at their market and community similarly. That’s hardly a practical approach to gaining a competitive advantage.
To find a competitive advantage, DMOs must constantly evaluate and adapt thei strategic tools to stay ahead in a competitive market. Here are a few more reasons why a DMO might consider switching from SWOT analysis, even if their competitors use it.
Gain a fresh perspective: Switching to a different analysis framework allows a DMO toapproach its strategic planning from a new angle. It can bring fresh insights and uncover opportunities that may have been overlooked using the same old SWOT analysis.
Explore alternative frameworks: Several other strategic analysis tools can complement or enhance SWOT analysis. For instance, organizations can consider using Porter's Five Forces, PESTEL analysis, or scenario planning to understand dynamics better.
Overcome limitations: While SWOT analysis is widely used, it has limitations. It can be subjective, caustic, and fail to prioritize critical factors. By exploring other frameworks, DMOs can address these limitations by exploring other frameworks' competitive landscape.
Stay innovative and adaptable: By utilizing different analysis tools, DMOs can foster a culture of innovation and adaptability. This allows them to respond to changes and disruptions in the market more effectively, giving them a competitive edge over competitors who may be relying solely on SWOT analysis.
As a former motorcycle racer, one of the lessons you learned early was never directly to follow the person in front of you. If you did, you were guaranteed not to pass them. The same is true for Competitive strategy and DMOs. Look for other ways to gain a competitive advantage. Don’t do what your competitors are doing. If everyone is doing a SWOT analysis, try something different. The consultant's template approach is not a winning formula.
There are several alternative approaches to SWOT analysis that DMOS can consider to complement or replace it. Here are some other alternatives to consider:
1. PESTEL Analysis: PESTEL stands for Political, Economic, Social, Technological, Environmental, and Legal factors. It provides a broader analysis of the external environment. PESTEL analysis helps identify and understand the macroeconomic, political, societal, and technological influences that can impact an organization's strategy and operations. By considering these factors, DMOs can better understand their new realities, opportunities, and threats.
2. Porter's Five Forces Analysis: Developed by Michael Porter, I first came across years ago as a graduate student, and this approach still has some appeal. It’s more applicable at an industry level, but the thinking could open some insights for your destination. This framework focuses on competitive forces within an industry. It examines five key factors: the threat of new entrants, the bargaining power of buyers, the bargaining power of suppliers, the threat of substitute products or services, and the intensity of competitive rivalry. By analyzing these forces, a DMO can understand the competitive landscape and make more informed market positioning and strategy decisions.
3. Value Chain Analysis: Value chain analysis helps DMOs identify and understand the activities and processes that create customer value, connection, and loyalty in a destination. It involves analyzing a DMO's primary and support activities and assessing how they contribute to the overall visitor value proposition. By examining the value chain, DMOs can identify opportunities for their destination.
4. SOAR analysis: Instead of focusing on weaknesses and threats like SWOT, SOAR emphasizes Strengths, Opportunities, Aspirations, and Results. It is a positive and future-oriented approach that fosters growth and innovation.
5. VRIO framework: This analysis assesses a destination's resources and capabilities by evaluating their Value, Rarity, Imitability, and Organization. It helps identify a destination's sustainable competitive advantage.
6. TOWS matrix: Like SWOT, the TOWS matrix combines external opportunities and threats with internal strengths and weaknesses to develop strategic alternatives and action plans.
As you can see, various other tools and ways of thinking exist beyond a traditional SWOT analysis. Each one has its unique approach and benefits. Doing a SWOT analysis because you have always done one is no reason to do it again; remember, you don’t get a competitive advantage doing the same process and programs that other DMOs are doing.
Take Another Path