The business environment is constantly changing to a
wider range of pressures not seen in the previous models. With a more complex business
environment organizations need to be ready to accept and adjust to new
conditions as they become apparent. The strategies use can lengthen or shorten
product and service life-cycles. Updating the common SWOT tool to offer alternative
strategies and switch analysis helps to ensure businesses can adjust their
strategies to strengthen their positions and thwart decline.
A paper by Mayer & Vambery (2008) indicate that
the current SWOT needs to be updated to include change as an additional
construct in order to fit within the nature of modern global businesses. They
discuss internal change (Chi)
and external change (CHe)
to make SWOTCHi/e. Their reasoning
is that the traditional SWOT assumes a single market with a finite beginning
and end to products/services. In global business there are multiple markets and
uses for products. Things change on a
constant basis and companies should be prepared.
Traditional
Product Cycle:
-Introductory:
The entrepreneurial introduction of a product.
-Growth:
High growth to a plateau.
-Mature: A
leveling of sales and consistency of process.
-Decline:
Market decline until discontinuation.
During this product life cycle the strategic
decisions and considerations often impact the overall success and movement
throughout the stages. For example, in the introductory stage an entrepreneur can
damage the success of the product by putting time and resources into paths that
are not aligned with the market. Likewise, the growth stage can be extended by
strong decision making and the decline stage doesn’t necessarily need to be the
end stage if adjustments to the product give it new life.
The internal and external change additions to
traditional SWOT offer an opportunity to reduce the static nature of the
analysis based upon previous market realities. As change appears to be a modern
constant it is necessary for organizations to have contingency plans. Through
these contingency plans an organization can enact a new plan that capitalizes
off of the gains of the initial plan when the market changes.
The analysis of cost associated with a required
change and the realignment of organizational components is called a switch analysis. SWOT should consider
the potential for change and where their organization can capitalize on that
change if it occurs within the market. The switch analysis will give them a
level of understanding of effort in remobilization and adapt.
We know that the market is a fluid and changing
affair where five years in the future might create completely different
conditions for products and services. The traditional SWOT should be adjusted
so that it considers the possible strategic plan changes under a number of
likely scenarios. Using the SWOTCHi/e
offers an opportunity to maximize
profits and minimize costs under market changes. Being aware of the potential
of such changes makes companies proactive in terms of their planning and
performance.
Mayer, P. & Vambery, R. (2008). Aligning global
business strategy planning models with accelerating change. Journal of Global Business and Technology, 4
(1).
