1. Business Strategy Review, 2003, Volume 14 Issue 2 pp 8-10
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Bringing SWOT into focus
George Panagiotou suggests an improvement on a long-standing strategic planning tool.
In a rapidly changing and highly requirements of their business analysis was widely discussed and
diversified world characterised by environments. These include seen as a major advance in
strong domestic and global strengths, weaknesses, opportunities strategic thinking.
competition, organisations struggle and threats (SWOT) analysis, which
to survive. Political and economic may well be used more than any Deficiencies of SWOT analysis
upheavals, expanding industry other management technique in the Despite its catchy acronym, a long
boundaries, competitive activities, process of decision making. history of service and continuing
co-operative engagements and usage, SWOT remains rooted in
varied philosophies impose a SWOT analysis is concerned with the vagueness, relies on an over-
multitude of constraints that firms analysis of an organisation’s internal simplified process and has
have to cope with. and external environment with the aim numerous limitations.
of identifying internal strengths in
Continuously transforming order to take advantage of its external When SWOT analysis was first
technologies, deregulation, ever- opportunities and avoid external (and introduced, the field of business
increasing consumer demands and possible internal) threats, while strategy was in its infancy and such
expectations cause pressure and addressing its weaknesses. a simplistic analysis may have been
place companies under continuous perceived to be adequate to satisfy
risk and uncertainty when SWOT analysis originated from business appraisal requirements. But
formulating strategies. Complex efforts at Harvard Business School since then strategic planning and
organisational internal issues, to analyse case studies. In the early strategy formulation have evolved to
effective application, 1950s, two Harvard business policy more sophisticated levels to facilitate
complementarity and co-ordination professors, George Albert Smith Jr complex requirements in decision
of resource requirements, paired and C Roland Christensen, started making. Given the complexity of
with internal politics and the need to to investigate organisational business environments and the
accomplish levels of excellence, strategies in relation to their need to satisfy numerous “key
create tension. environment. In the late 1950s, factors for success” (KFS), SWOT
another HBS business policy analysis no longer provides the
Consequently, organisations do not professor, Kenneth Andrews, support needed to achieve a more
exist in a vacuum but rather they expanded on this thinking by advanced level of analysis.
exist, co-exist, compete and co- stating that all organisations must
operate in a multi-dimensional and have clearly defined objectives and There is no doubt that SWOT
interrelated environment keep up with them. analysis is a valuable tool in the field
characterised by ambiguity and of business strategy because it invites
complexity. Understanding this In the early 1960s, classroom decision makers to consider
environment is fundamental to discussions in business schools important aspects of their
formulating strategy, decision were focusing on organisational organisation’s environment and
making and strategic planning. strengths and weaknesses in helps them organise their thoughts.
relation to the opportunities and The idea that managers should be
As a result, there is a proliferation of threats (or risks) in their business thinking about their organisation’s
strategic planning tools to enable environments. In 1963, a SWOT-based variables is very
managers to formulate competitive business policy conference was important in the process of
strategies in line with the held at Harvard, where SWOT decision making.
Business Strategy Review

2. Bringing SWOT into focus 9
Table 1
The TELESCOPIC OBSERVATIONS strategic framework
? T E L E S C O P I C ? O B S E R V A T I O N S ?
Strengths
Internal
Environment Weaknesses
Oppor tunities
External
Environment Threats
However, the open nature and internal strengths and weaknesses to closer to the user for a more effective
unstructured method of SWOT external opportunities and threats. analysis and evaluation.
offers little help to users. Planners
are left without indication as to More recently another model has been The TO strategic framework invites
where to search for such variables, developed with four steps (surveying, decision makers to be more systematic
or what to do after finding them in categorising, investigating and and coherent in their organisational
terms of how best to incorporate evaluating) to identify organisational environmental appraisal, in relation to
them in strategy formulation. strengths and weaknesses in relation to current available methods, by being
its business environment, and assess more inclusive and directing focus
Consequently, a number of relevant resources and capabilities on the important areas that need to
academics have tried to devise with the aim of identifying be addressed.
various modified frameworks to competitive advantages.
focus SWOT in order to improve its The framework consists of two
outcome and enhance the planning All of these models are relatively matrices and works like a funnel,
process. For example, there are a limited in their application and eclectic where information is gathered and
number of alternative models in in nature and thus address some areas filtered out by the user according to
place – such as WOTSUP where UP with strategic importance to the needs and requirements. Framework
stands for “underlying planning” organisation while, others equally 1 is the entire TO as shown in Table
and SOFT where F stands for important, are missed or overlooked. 1. (Tables 2, 3 and illustrate specific
“fault” – that are an effort to areas.) The framework could also be
identify more significant information The “TELESCOPIC thought of, as a “grand strategic
and achieve a more meaningful OBSERVATIONS” strategic matrix” where information is
appraisal of an organisation’s framework aggregating and culminating while
strategic issues. What is needed is a new providing a structured context for
framework that is more focused strategy formulation and optimisation.
Others have incorporated current and inclusive in its structure to
available models such as Kaplan and enable users to make better sense TO is not intended to replace other
Norton’s Balanced Score Card with of their business environments, and environmental analysis techniques
SWOT, or Cross Impact Analysis more systematic in its but rather to consolidate on them in
with SWOT in order to identify and methodology, to enable such a systematic method. To that end,
incorporate relevant KFS in their relevant information to be such environmental analyses should
assessment of organisational obtained and meaningfully used for first be carried out using established
strengths and weaknesses. strategy formulation. methods. TO should be the last in
the series of the planning process
Some have introduced completely The TELESCOPIC OBSERVATIONS and should “carry” the information
new frameworks, such as the “value, (TO) framework was developed in generated by such diverse sources.
rareness, imitability and mid-1999 to provide a more
organisation” (VRIO) model, in structured framework. Since then it When all relevant business
order to identify relative has been tested out in different environmental variables have been
organisational competitive organisational settings. As its name identified through the use of
advantages and barriers to imitation. suggests, the framework scans and appropriate analytical models, such
Equally, the TOWS matrix seeks to observes distance objects, focuses findings and observations should be
formulate strategies by combining and zooms in them, and brings them entered at the upper segment of the
Summer 2003

3. 10 George Panagiotou
Table 2 T E L E S C O P I C
Technological Economic Legal and Ecological and Sociological Competition Organisational Portfolio International Cost
Advancements considerations regulatory environmental trends culture analysis issues efficiencies
requirements issues and cost
structures
Strengths
Internal
Environment Weaknesses
Oppor tunities
External
Environment Threats
TO strategic framework in order to made on the weaknesses or threats. strategies to overcome weaknesses,
gather all the information in one place. take advantage of opportunities and
Subsequent entries should then be When all TO strategic framework avoid threats.
made on the lower (SWOT) segment SWOT-based factors have been
of the framework according to the entered in the lower segment, they In other words, the entire TO
understanding of what is a company should then be prioritised and strategic framework process begins
strength or weakness or what makes ranked according to organisational by being broad in scope, becomes
an opportunity or a threat. Careful requirements and as such be more specific and ends up by being
consideration and reflection should transferred to the second framework, precise in a consistent manner.
be given to these variables based on the SWOT strategic framework,
their importance. where ranked SWOT-based variables George Panagiotou is a senior
are used to formulate strategies. lecturer at London
For example, if, based on the Metropolitan University and
identified factors, organisational The SWOT strategic framework is a acknowledges colleagues at the
responsiveness has created modified version of TOWS analysis, business studies department for
advantages, an entry should be made where weaknesses to opportunities their contribution to this article,
on the strengths or opportunities. If, strategies and weaknesses to threats especially John Lipczynski and
in contrast, there are relevant strategies have been eliminated. It Riette van Wijnen for their
organisational limitations or has been restructured to use constructive comments.
inadequacies an entry should be organisational strengths to formulate
O E S E R V A T I O N S
Table 3 Organisat- Buyers Suppliers Electronic Resource Value chain Alliances Total Industry Organisa- New Substitute
ional core commerce audit (including Quality Key tional entrants products
com- partnerships, Management Factors for structure and
petencies networks & Success ser vices
and joint
capabilities ventures)
Strengths
Internal
Environment
Weaknesses
Oppor tunities
External
Environment Threats
Table 4 Weaknesses Opportunities Threats
(W) (O) (T)
1. 1. 1.
2. 2. 2.
3. 3. 3.
4. 4. 4.
5. 5. 5.
Strengths (S) Strengths to Weaknesses Strategies Strengths to Opportunities Strategies Strengths to Threats Strategies
(S/W) (S/O) (S/T)
1.
2.
3.
4.
5.
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