Amongst all the novelties, trends, and fashions appearing in the field of strategic management during the last decades, the SWOT analysis, standing for: strengths, weaknesses opportunities, and threats has enjoyed a long lasting popularity among both practitioners and researchers. The purpose of this essay is to demonstrate that swot analysis can be used for both businesses and individuals.
In the 60s swot analysis was invented at the Harvard business School for the purpose of analysing case studies,it was the efforts of two business policy professors ; professor George Albert Smith and professor C Roland Christensen. At Harvard in 1963 where a business policy conference was held about the SWOT analysis in which it has been thoroughly discussed and also considered as an important advance in the strategic thinking (Panagiotou 2003)
Since then the swot analysis has been hardly ever used, up until 1982 when Weihrich have first introduced the swot matrix as we all know it today.(appendix 1) (Appendix1) (Adapted from Ghazinoory, S Et al.2011)
As shown in the matrix swot analysis is composed of four main elements Strength, weaknesses, opportunities, and threats. The top part of the swot matrix containing strengths and weaknesses analyses the internal environment of the organisation means whatever it is happening inside the business, such as new product development and human resources management, the elements from the internal environment are much more controllable than the ones in the external environment, in other words managers can control the internal environment of the organisation when making their decisions. However, the bottom part of the swot matrix which analyses the opportunities and threats means what the external environment of the business is offering, as far as this part is concerned it is very difficult to control and what businesses usually do, they try to cope with threats and take as much opportunities the external environment is providing.
The Business plan on Swot Analysis Business One Company
SWOT Analysis This type of analysis is designed to help identify several areas of a business that may need improvement and other areas where the company may be able to improve upon. SWOT is an acronym for; Strength, Weakness, Opportunities and Threats. A company should consider this analysis to be one of the most important steps to becoming one of the leading stores and schools of this nature in ...
As mentioned before the SWOT has enjoyed a long lasting success in the business field, this particular research is showing the number of papers published in academic journals about the swot analysis from the 1980s to 2009. As the diagram shows there was a continuous growth from the 1980s to the year 1999, followed by a dramatic increase from the year 2000 to 2009 reaching 301 paper, this increase could be explained by the words’ recession at this time in from the year 2000 as businesses have been trying to improve their productivity to overcome the recession, and probably the use of the SWOT analysis have helped many businesses during this critical period of time to improve. (Appendix 2).
(Appendix2) (Ghazinoory, S Et al.2011)
Even though swot analysis was invented in the United States of to America but this strategic management tool have enjoyed an enormous popularity around the globe as shown in the table below the top 10 countries that have published papers about the SWOT. On the top of the list there’s United Kingdom and the United States of America with 52 papers each then followed by India and China.
Although swot analysis has been one of the major inventions in the strategic management field, this theory has been subject for many criticisms where some researchers and practitioners have pointed out the theory’s weaknesses and suggested some significant solutions in order to modify it and make it even more useful.
The Business plan on Swot Analysis 4
A SWOT analysis is a tool to identify the strengths, weaknesses, opportunities and threats involved in a business. Strengths mean characteristics of a business in advantage over others, while weaknesses are disadvantages relative to others. Opportunities mean elements that a business can exploit for its development, while threats are trouble will be face to. SWOT is to carry out the environment ...
Weihrich (1982) pointed two weaknesses when applying the swot one of them is “Time dimension in SWOT matrix” and the other is “the complexity of Interactions of Situational Factors.”( Weihrich 1982)
And proposed as a solution to solve the first issue doing several swot matrixes at different points in time means updating the previous SWOT analysis each time a change occurs. When addressing the second issue Weihrich suggested the use of the interaction matrix but unfortunately his last suggestions was not made into practice.
After that Even Hill and Westbrook(1997) came along and pointed some other difficulties when using the swot matrix such as the length of the factors listed ,the lack of prioritisation and the weight of the factors is not identified, in addition to that there is a lack of support of the statements and opinions with data or previous analysis. In the same year Beeho and Prentice (1997) described the swot analysis as familiar and a user-friendly method, because there is no need for a computer systems, special software or complex information to conduct a swot analysis. But it has got several shortcomings such as the factors listed in one category can fit into others, and there is clear lack of specificity and accuracy when describing the factors, in addition to that some factors represents opinions not facts. These two authors also said:” Owing to its simplistic nature and ease of use, the technique has been used in a slack manner and is susceptible to subjectivity and bias from managers who can present an unrealistic appraisal of company attributes.”(Behoo and Prentice 1997)
Finally Hussey (2002) identified other weaknesses about the swot matrix from the perspective of managers where he says that it is difficult for managers to identify the strength and the weaknesses of the company because they are operating in the operational part of the business, and the swot analysis is addressing the strategic part which is often done by the senior managers of the organisation, therefore not all operational managers have enough strategic information to conduct a swot analysis properly, additionally the writer assumes that it is easy for something positive to be perceived as better then what it is in reality, he added that the swot analysis will not be that useful if not for combined with other methods.
The Business plan on Toyota Corp Swot Analysis Business Level And Corporate Strategy
Toyota Corp SWOT analysis, business level and corporate strategy Toyota is one of the largest and the most well respected car companies in the world. Its greatest adventure is brand name, size and reputation. These are its strengths and the company is constantly increasing them by developing technological capabilities and by controlling its own inputs. Toyota gained a good reputation for ...
And this is exactly what happened later as Proctor (2000) created the TOWS matrix or known as the situational analysis, this matrix discusses in further detail the information found in the SWOT analysis and then combines the element of the external and internal environments of the enterprise to help the user brainstorm and come out with specific strategies to tackle the weak factors previously found in the SWOT analysis (appendix 4)
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The purpose of the second combination is to solve the issues of ambiguity and the lack of prioritisation found previously with the SWOT analysis and Ishino and Kijima (2005) suggested it is the combination of swot analysis with the balanced score card. The BSC is a strategic planning and management system created by Dr Roberts from Harvard Business School. This method helps the organisation measure its performance, and also provides a clearer view of what the organisation should measure in order to make balance between the four elements of the balance score card known as finance perspective, customer perspective, learning and growth and internal process. (balancedscoredcard.org).
So when you conduct a swot analysis then you take all the factors that you have listed and transfer each of them to the right box in the balanced scorecard so that the problem will be dealt with from the right people in the right place. (Appendix5)
(Appendix5) (Ghazinoory, S Et al.2011)
The last combination involves three strategic management
Methods. As mentioned before the swot analysis matrix is divided into two parts; external environment analysis and internal environment analysis, to analyses the internal environment analysis the McKinsey 7s’ method is used because it covers all elements of the internal environment of the organisation: strategy, structure, system, shared values, style, staff, and skills. This method also helps managers have a birds’ eye view on how well the internal environment of the business is performing. For the external environment of the organisation another method called PESTEL is used, standing for political, economic, social, technological, ecological, and legal. So the use of both PESTEL and McKinsey 7s allow the managers to explore in more detail the data gathered from the swot analysis. As far as the swot analysis for individuals is concerned, a research done by two Business professors in Webber State University, Lon Addams and Anthony T. Allred, where are they have instructed their students to conduct a SWOT for themselves known as self-swot analysis. The research revealed that students who have properly conducted a self-swot analysis have a better understanding of what are their weaknesses and strength and also recognise the importance of being able to spot opportunities, because the external environment is continuously offering opportunities we just need to be aware of them and use them. This study also showed that these students are well more focused on their present situation while examining their external environment looking for opportunities. (L. Addams and A. T. Allred 2013)
The Business plan on Business Environment 12
... tools can analyse the internal and external environment that affect a business. (Campbell, D. Craig, T. (2008). When conducting a SWOT Analysis of RSL (see ... Business. (2004) Business environment supporting foundation degrees. 1st Edn. London: BPP Professional Education. Eselgroth, Z. (2012) ‘Here’s how I implemented an environmental management system’, Business ...
Again about the use of the swot analysis for individuals but this time inside the business for small businesses specially, externalising strategic research and consulting can be very expensive, therefore using swot analysis employees would help the business owner to get to know his workers more and also being able to spot the leader from them and benefit from the leaders’ potential skills and capabilities in order to improve the business.(D. Reed 2013)
To conclude this old theory have enjoyed a long lasting popularity around the word despite all the criticisms which have only made it stronger and even more developed, to go beyond its expected use in the business field and expand onto the human resources management and education.
References
Addams, L. and Allred, A. T. 2013. ” THE FIRST STEP IN PROACTIVELY MANAGING STUDENTS’CAREERS: TEACHING SELF-SWOT ANALYSIS”. Academy of Educational Leadership Journal, 17 (4).
Ghazinoory, S., Abdi, M., Azadegan-Mehr, M. and Ana. 2011. SWOT methodology: a state-of-the-art review for the past, a framework for the future. Journal of business economics and management, 12 (1), pp. 24–48. http://www.smartinsights.com/marketplace-analysis/swot-analysis/why-use-swot/ https://balancedscorecard.org/Resources/AbouttheBalancedScorecard/tabid/55/Default.aspx REED, D. 2013. SWOT your way to the future. Industrial Management, 55 (2).
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Implications of business process management for operations management Colin Armistead and Simon Machin The Business School at Bournemouth University, Bournemouth, UK Introduction Operations management is concerned with the management of people, processes, technology and other resources in order to produce goods and services. There is a resonance from operations management into business process re- ...