SWOT analysis is a classical strategy analysis tool based on four fields: strengths, weaknesses, opportunities, and threats (Grant 1998, Dyson 2004). According to Hill & Westbrook (1997), SWOT analysis and strategic planning originated from the academics of Harvard Business School in the 1960s.
In particular, these scholars defined good strategy as one that guarantees fit between the external situation of a company and its internal qualities and characteristics. This definition influenced SWOT framework in a way that advances the search for this fit as its core idea.
The SWOT analysis framework has two distinctive parts. First, it looks into the internal strengths and weaknesses of a business, and then provides an external view of opportunities and threats (Luffman et al.1996). The classification of items in this four-field framework can be aided by a question list specially designed for this purpose (Lindroos 2006).
SWOT analysis is a simple tool for strategy analysis, but nevertheless presents certain challenges because of its structure: all attributes identified via analysis can be difficult to precisely fit to the pre-configured sections of the four-field analysis matrix. Point of view also heavily affects application and results. Some attributes can initially be viewed as threats but as lucrative business opportunities from a different angle (e.g. from other business units) (Grant 1998) In the analysis, several complementary SWOT matrices can be used; for example, current and future states can be plotted to separate frameworks (Lindroos 2006). The SWOT analysis matrix can also be enhanced by introducing aspects of the latest management theories (Valentin 2001). The rating and selection of the items for classification under the SWOT categories can be based on numeric scores or weighting of items on the basis of their influence. The challenge, therefore, lies in ensuring an objective approach (e.g. Evans & Wright 2009, Hosseini-Nasab 2011). Several...