The SWOT analysis is a very well-known approach which has been around for almost 50 years. It requires the user to investigate the internal Strengths and Weaknesses of their own organization, and then to consider the external Opportunities and Threats the organization faces. To do this effectively, an honest appraisal is needed for the internal analysis, while a good understanding of the market environment is necessary to arrive at a valid external analysis.
For hoteliers, we already see a challenge taking shape; to perform a SWOT analysis we need an insider who truly understands his or her own hotel, but who also has the broader industry knowledge to form an accurate view of the competition and the changing market trends. Failing that, the analysis must be conducted by a team whose members can provide the requisite insights.
Despite its widespread use, there is also another problem to look out for with SWOT analysis, and that is that it can often become an exercise in creating lists, while the actual objectives of the business are forgotten. If each of the various factors which are listed as strengths or weaknesses are not realistically assessed, it can be all too easy to ‘balance out’ a genuine threat with a rather fanciful opportunity, and learn nothing useful whatsoever.
With these caveats in mind, the SWOT analysis does have its uses, especially when it is performed in relatively specific circumstances. By this, I mean that the objectives should be as precise as possible, and the people involved should really know their stuff. I’m less convinced of the benefits when a hotel manager sits down to write all the strengths and weaknesses he thinks his hotel has, without first thinking about what exactly he’s trying to accomplish.
One slightly less common way you can use SWOT analysis effectively is when you want to make improvements within a particular department in your hotel. Let’s say you want to provide better service in your restaurant. This is quite a precise objective – and notice that we didn’t say we want to be more productive, or attract more customers, or any of the other possible goals we might imagine. We keep it specific – because our strengths and weaknesses should be evaluated from this particular perspective.
Then we think about who’s going to help compile the analysis. Of course, the General Manager can imagine what he thinks the service strengths are – but he’s just as likely to fall for his hotel website’s promotional spiel and actually believe that he offers a memorable world-class dining experience. The waiters, on the other hand, are in a great position to tell him otherwise. They’ll have a pretty good idea of what they do well, and of areas where they don’t quite get it right.
The next step is to think about how these insights are to be used. The usual approach is to match strengths to take advantage of opportunities, to convert weaknesses to become strengths, or to simply find ways of avoiding threats. All of these are valid ideas, and once again, the people who are directly involved should be the ones whose input is taken into consideration when the analysis is performed.
In our example, the waiters may be able to suggest some ways of addressing the weaknesses they’ve identified – and bear in mind that this is much more likely to happen when it is the staff who have identified the problem than when managers have pointed the finger. They may also be able to suggest ways of utilizing their strengths to bring about further improvements. After all, that was the specific aim we had in mind at the start, and that must ultimately be addressed in the conclusion to the exercise.
In summary, be specific, set your objectives, keep the focus relatively narrow, and involve the right people every step of the way. Do this, and you’ll get much more out of SWOT analysis at every level.