The quality of strategic marketing decisions is to a large extent dependent on how valid and reliable is the understanding by an organization of its external and internal environment, including its trends, and how well is this knowledge utilized later in strategy generation and selection. This article looks into the issues of validity and reliability of a crucial tool of strategic analysis, SWOT. It utilizes results of author’s study conducted in the second half of the 1990s of the relevant practice as presented by his Australian postgraduate students enrolled in business management courses. The main argument of this paper is that it is certain misconceptions held about the nature of SWOT, poor quality of input and inadequate skills of those who use SWOT, rather than properties of this tool, that are to blame for most cases of its less than successful implementation. To help organizations enhance their SWOT analysis, a corresponding model of this analytical process will be introduced in the second part of this paper.