Revision as of 19:50, 16 February 2019

Abstract

This article will be presenting the tool SWOT and the main points of SWOT will be covered alongside with an introduction on how to apply SWOT. Moreover, the strength and weaknesses of this tool will also be presented so it can be taken into consideration when using the tool. SWOT can be applied in many different areas whether it is business strategy or market research but is especially used within marketing. (1) Much of the original groundwork for what is known as SWOT today, was already established more than 50 years ago. A man name Kurt Lewin, his landmark posthumous text, called; Field Theory in Social Science, emphasized that an organization’s desires are influenced by different driving forces or enhancers and limitations and inhibitors. Many companies when facing a problem whether it is external or internal, by using SWOT they can create a quick overview of what your obstacles you need to overcome and what chances there are to take. SWOT is four initials standing for four different elements, where the elements are used to identify different perspectives of consequences. They each stands for Strengths, Weaknesses, Opportunities and Threats. The first two factors, Strengths and Weaknesses are factors for the internal, typically when you are inside a company, you will look within to see what kind of Strengths you have and what kind of Weaknesses you have. Then there are Opportunities and Threats, which are external factors, so you look from internal to external. Opportunities help to identify chances there are to grow, expand and even more potential of a blue ocean and Threats are what kind of competitors are there, restrains, regulations. We will be talking more detailed about it in the sections further down.

A brief history of SWOT

Earlier it was mentioned that the original groundwork was laid by Lewin, but at around the same time there were two professors from Harvard, George Albert Smith Jr. and C. Roland Christensen, who were also interested in the related issue about identifying the extent of the correlation of the organization’s strategy and its competitive environment. Therefore, they instructed their students to address if a company took into account the requirements of a competitive environments. Around a decade later another professor from the same University wanted to see the already by then named SWOT, if it could be used to explore the ways in which competitive thinking influences business strategies. (2)

Theory of SWOT

Introduction to SWOT

As mentioned S.W.O.T each letter stands for something different, with each one of them having their very own purpose, where they together create a very strong foundation for an analysis, whatever the purpose is for. SWOT analysis is processed by a group of stakeholders, where they 1. Identify internal and external obstacles and enhancers of performance 2. Analyse those factors, which are basted on estimates of their contribution to the net value and how much they are controllable 3. To decide what further or future actions to take regarding those factors. Let us look at what they stand for (1):

• S – Strengths – Refers to internal competencies, valuables resources or attributes
• W - Weaknesses – Refers to internal inhibitors of the competencies, resources or attributes
• O - Opportunities – Refers to external enhancer of performance, which can be pursued or used
• T - Threats – An external inhibitor of performance that has the potential to reduce accomplishments.

Now that we know what SWOT, stands for, but how do we go around about them? There are some questions to get you started. Strengths:

• Does the company have the necessary skills in-house?
• Has a budget been assigned to the project?
• What are the benefits of completing the project?
• Will the project require new technology or equipment?
• How experienced is the project team on similar projects?

Weaknesses:

• Is there a reliable estimate of costs available?
• Does the company have the budget to provide contingency funding?
• What are the drawbacks of the project?
• Will parts of the project need to be outsourced?
• Is the proposed schedule realistic?

Opportunity:

• Can a local project be leveraged nationally or internationally?
• Do the competitors have any weaknesses?
• What are the latest industry trends?
• Are there any new, or imminent, technology developments?

Threats:

• Is there well-established competition already in the marketplace?
• Are experienced staff difficult to replace?
• Has new technology been fully tested?
• Could national or global economic conditions affect the project?

Naturally, there are a lot more questions that can be asked, but these questions for each of the elements, are good starting points. These questions will help you get started on doing the SWOT. Remember, it is always a good idea to do SWOT in the early basis, because it gives you a detailed overview and gives you information, which you can use for your later processes in decision making and planning (3) Visually the SWOT can be shown like this:

The 4x4 Matrix – Kevin Lim has copyright on the design, but the contents are all taken from (1) p. 126

How to use SWOT

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When to use SWOT Here are just a few to show when it is applicable to use SWOT, and these mentioned components are also included in something called Human Performance Technology (HPT), which can deepen your understanding on SWOT, but it is not necessary (4). 1. In performance analysis When identifying the degree to what internal practices and external environmental influences impact how results are currently being accomplished within an organization 2. In cause analysis When finding what practices should be continued or even expanded in the longer terms, as well as those that should be discontinued or replaced by other methods or tools. 3. In strategic planning When in strategic planning and needs assessment for identifying the factors that contribute to or detract from organizational effectiveness 4. In evaluation When monitoring the internal an external environment of a program for change over time, for tracking new SWOTs as they emerge, and for documenting for previously existing SWOTs as they become less influential on a program Besides these quite general categories within HPT practice, SWOT can also be a great to use within (1):

• Appreciative inquiry –To clarify the organization’s strengths and opportunities
• Benchmarking – To identify possible opportunities and threats
• Industry analysis – For contextualizing opportunities existing in the market
• Situation analysis – For evaluating possible trends or ongoing trends in the markets, costs and competition and competitors
• Scenario planning – For considering possible and preferred long-term scenarios

= Relevance in project management

= Limitations and critiques of SWOT

It is not doubt that SWOT is a very strong tool when carried out right, it can provide valuable knowledge about both customer preferences and competitors intents, and nevertheless where the possible opportunities to grow are. There are also some critiques of SWOT, such as:

• There are no prioritization of the identified factors and it seems like it was hard to meaningfully compare the importance of one SWOT to another
• No figuring of costs and benefits or how to use them to achieve their objectives
• Sometimes it can be hazy on what is external and internal

And, some limitations about SWOT:

• It does not help determine the costs and benefits of alternative performance solutions
• It does not rank the factors according to their criticality
• It provides minimal information regarding the degree to which an organization or work team possess influence over the factors that have been identified.

Despite all these, it is possibly to enhance SWOT to its further usability by considering 2 factors 1. Approximations of the degree which an organization can control over each factor 2. Estimate the costs and benefits of the factors. And turn them into questions for better decision, by asking:

• How much control does the organization have over each SWOT factor?
• How much does each SWOT factor cost or benefit the organization?

(1)(2)

Conclusion

Annotated bibliography

Source: 1. https://onlinelibrary-wiley-com.proxy.findit.dtu.dk/doi/pdf/10.1002/9780470592663.ch24 3. https://www.projectsmart.co.uk/swot-analysis-in-project-management.php 2. file:///C:/Users/User/Downloads/HANDBOOK%20OF%20HPT_THIRD%20EDITION.pdf (2) Handbook of Human Performance Technology Third Edition Principles, Practices, and Potential, James A. Pershing Editor Foreword by Harold D. Stolovitch and Erica J. Keeps