“Are you doing the SWOT analysis backwards?” AND “The five competitive forces that shape strategy”

Reflection on “Are you doing the SWOT analysis backwards?” by L. Minsky & D. Aron, Harvard Business Review, February 23, 2021:

The article “Are you doing the SWOT analysis backwards?” challenges the traditional approach to conducting a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis in strategic planning. The authors argue that organizations often start with internal assessments (Strengths and Weaknesses) before considering external factors (Opportunities and Threats), which can lead to biased decision-making and missed opportunities.

The authors propose a reverse SWOT analysis, where organizations begin by analyzing external factors first. By focusing on Opportunities and Threats before evaluating internal factors, companies can gain a better understanding of the market dynamics, industry trends, and competitive landscape. This approach allows for a more comprehensive assessment of the external environment and helps identify potential growth opportunities and emerging threats.

I found this article to be thought-provoking because it challenges the conventional order of conducting a SWOT analysis. By prioritizing external factors, organizations can avoid being internally focused and gain a more holistic perspective on their strategic position. This approach aligns with the idea that businesses should be customer-centric and adaptable to changing market conditions.

Reflection on “The five competitive forces that shape strategy” by M. Porter, Harvard Business Review, 2008:

“The five competitive forces that shape strategy” by Michael Porter is a seminal article that explores the framework known as Porter’s Five Forces. Porter argues that understanding the competitive forces within an industry is crucial for developing effective strategies.

The five forces identified by Porter are:

Threat of new entrants: The ease with which new competitors can enter the market.
Bargaining power of suppliers: The ability of suppliers to dictate terms and prices.
Bargaining power of buyers: The ability of customers to influence pricing and demand.
Threat of substitute products or services: The availability of alternative options for customers.
Intensity of competitive rivalry: The level of competition among existing firms in the industry.
Porter asserts that these forces determine the profitability and attractiveness of an industry. By analyzing and understanding these forces, companies can make informed decisions about competitive positioning, differentiation strategies, and resource allocation.

This article remains highly relevant today because it provides a structured framework for assessing industry dynamics. Porter’s Five Forces framework helps organizations identify sources of competition and potential areas for strategic advantage. It emphasizes the importance of understanding the broader industry context and not solely focusing on internal capabilities.

Overall, “The five competitive forces that shape strategy” is a foundational article that continues to be a valuable resource for strategic management. It highlights the significance of analyzing industry dynamics and provides a framework for developing effective strategies in a competitive marketplace.