Over the past few decades one strategic management technique that has gained increased acceptance or which has rather excelled in the field of strategic planning is the SWOT analysis. Despite all its popularity most users have no idea about when or how this technique evolved, and who can be credited for the conceptualization or development of SWOT. History of this technique is somewhat elusive, but largely the evolution of this concept can be ascribed to Albert Humphrey – an American management consultant.
Evolution History of the SWOT analysis:
While working on a research project at the Stanford University sometime around 1960s to 1970s, Albert Humphrey developed an analytical tool to evaluate the strategic plans and find out why corporate planning failed. He coined this technique as SOFT analysis where –
- S stood for what things are Satisfactory at present,
- O denoted what Opportunities can be explored in the future,
- F meant the Faults in the present and
- T signified the Threats that could surface in the future.
While the majority agrees that SOFT is the predecessor of SWOT, some people believe that the concept of SWOT analysis emerged separately and has nothing to do with SOFT.
How SWOT evolved from SOFT?
The first mention of the term SWOT can be traced back to the Long Range Planning seminar held in Zurich in 1964. In this seminar Urick and Orr proposed the concept of SWOT analysis which was derived from SOFT by replacing the F for faults with W for Weaknesses. With its initial promotion in the Britain, the concept soon gained recognition among strategic planners and management consultants the world over.
The new interpretation of SWOT, the way it is used these days, differs slightly from that of SOFT.
The S in SWOT now represents the strength – which give the business an advantageous edge over the other similar businesses.
W stands for weaknesses and these weaknesses can be understood as the comparative disadvantages that a business
faces as against other similar businesses.
O represents opportunities – the external possibilities that can be explored or utilized to boost the business’s growth.
T signifies threats – the external or environmental factors which can cause problems for the business.
Emerging of the SWOT matrix
Another important development in the history of the SWOT analysis was the development of the SWOT matrix. In 1982, Dr Heinz Weihrich proposed the use of a 2x2 matrix for carrying out a SWOT analysis. This matrix was initially popular as TOWS matrix, which is another name used for referring to a SWOT matrix even today.
Ever since the 1980s, the SWOT interests management professionals and forms an integral part of strategic planning mechanism. Looking at history, one can see that a lot many similar concepts were introduced during various researches, but none of them survived for too long. In fact, some of the tools were very similar to SWOT. History is proof enough that SWOT is by far the best and the most widely used strategic planning tool.
Screenshot Taken by: Sidharth Thakur
This post is part of the series: SWOT Analysis
Here is a series of articles on the immensely popular SWOT analysis strategic planning tool. These articles will help you in getting a deeper understanding for practical use of the concept of SWOT analysis.