05 Fleisher Bensoussan SWOT Analysis
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J
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SWOT Analysis
SHORT
DESCRIPTION
SWOT (or TOWS) is an acronym for strengths, weaknesses, opportunities, and ' threats. A SWOT analysis, a subset of the broader situation analysis, is used to assess the fit between an organization 's strategy, its internaI capabilities (Le., its strengths and weaknesses), and external possibilities (Le., its opportunities and threats). BACKGROUND
Ken Andrews is generally regarded as the pioneer of SWOT analysis. In 1971,he was one of the first strategy theorists to formally articulate the concept of strategie fit between the firm 's resources and capabilities with the external environrnent. He argued that this methodology was a sound approach to determine a niche strategythe best way for a firm to use its strengths to exploit opportunities and to defend both the firm ' s weaknesses and strengths against threats.
Figure 8-1 is a depietion of Andrews ' strategy model that was the precursor to
SWOT analysis. The essential thrust of the model asks four questions (Andrews,
1971):
1. What
2. What
3. What
4. What
can we do (Le.,strengths and weaknesses)? do we want to do (Le.,organizational and individuaI values)? might we do (Le.,external opportunities and threats)? do others expect us to do (Le.,stakeholder expectancies)?
The answers to these strategie choiees are the raw material of strategie management. As Figure 8-1 also shows, Andrews ' initial SWOT model can be supplemented with four additional corresponding questions that further refined the strategie analysis of his first SWOT model:
1. What resources and capabilities do we want to develop?
2. What should we be caring about?
92
What Can We Do?
(Strengths and
Weaknesses)
What Might We Do?
(Extemal Opportunities and Threats)
What Do We Want to Do?
(Values of the Organization and Its Members)
What Do Others Expect
Us to Do?
(Desires of Stakeholders)
.
FurtherRefinement
Figure 8-1
The Roots of
SWOT:Key
Questions That
Guide Strategie
Choiee
What Resources
---
J
I
SWOT Analysis
SHORT
DESCRIPTION
SWOT (or TOWS) is an acronym for strengths, weaknesses, opportunities, and ' threats. A SWOT analysis, a subset of the broader situation analysis, is used to assess the fit between an organization 's strategy, its internaI capabilities (Le., its strengths and weaknesses), and external possibilities (Le., its opportunities and threats). BACKGROUND
Ken Andrews is generally regarded as the pioneer of SWOT analysis. In 1971,he was one of the first strategy theorists to formally articulate the concept of strategie fit between the firm 's resources and capabilities with the external environrnent. He argued that this methodology was a sound approach to determine a niche strategythe best way for a firm to use its strengths to exploit opportunities and to defend both the firm ' s weaknesses and strengths against threats.
Figure 8-1 is a depietion of Andrews ' strategy model that was the precursor to
SWOT analysis. The essential thrust of the model asks four questions (Andrews,
1971):
1. What
2. What
3. What
4. What
can we do (Le.,strengths and weaknesses)? do we want to do (Le.,organizational and individuaI values)? might we do (Le.,external opportunities and threats)? do others expect us to do (Le.,stakeholder expectancies)?
The answers to these strategie choiees are the raw material of strategie management. As Figure 8-1 also shows, Andrews ' initial SWOT model can be supplemented with four additional corresponding questions that further refined the strategie analysis of his first SWOT model:
1. What resources and capabilities do we want to develop?
2. What should we be caring about?
92
What Can We Do?
(Strengths and
Weaknesses)
What Might We Do?
(Extemal Opportunities and Threats)
What Do We Want to Do?
(Values of the Organization and Its Members)
What Do Others Expect
Us to Do?
(Desires of Stakeholders)
.
FurtherRefinement
Figure 8-1
The Roots of
SWOT:Key
Questions That
Guide Strategie
Choiee
What Resources
References: Andrews, K. (1971).Theeoneept01eorporatestrategy. Grant, R. (1995).Contemporarystrategyanalysis. Hill, T., & Westbrook, R. (1997). "SWOT analysis: It 's time for a produet reeall." Long Range Planning, 30(1),46-52. Rowe, A. J., Mason, R. O., & Diekel, K. E. (1986). WOTSUP analysis,strategiemanagement-A methodological approaeh.Reading, MA: Addison-Wesley. Stevenson, H. H. (1976). "Defining eorporate strengths and weaknesses." Waterman, R. H. Jr. (1982). "The seven elements of strategie fit." Journal olBusinessStrategy,2(3),69-73. Weihrich, H. (1982). "The TOWS matrix-A tool for situational analysis." Long Range Planning, 15(2),54-66.