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Unit 4: Area of Planning

4.1.1 Matching and Converting Notes
Another way of utilizing SWOT is matching and converting.

Matching is used to find competitive advantages by matching the strengths to opportunities.
Converting is to apply conversion strategies to convert weaknesses or threats into strengths or
opportunities.

An example of conversion strategy is to find new markets.
If the threats or weaknesses cannot be converted a company should try to minimize or avoid
them.

4.1.2 Internal and External Factors

The aim of any SWOT analysis is to identify the key internal and external factors that are
important to achieving the objective. These come from within the company’s unique value
chain. SWOT analysis groups key pieces of information into two main categories:
• Internal factors: The strengths and weaknesses internal to the organization.
• External factors: The opportunities and threats presented by the external environment to
the organization.

The internal factors may be viewed as strengths or weaknesses depending upon their impact
on the organization’s objectives. What may represent strengths with respect to one objective
may be weaknesses for another objective. The factors may include all of the 4P’s; as
well as personnel, finance, manufacturing capabilities, and so on. The external factors
may include macroeconomic matters, technological change, legislation, and socio-cultural
changes, as well as changes in the marketplace or competitive position. The results are
often presented in the form of a matrix.
SWOT analysis is just one method of categorization and has its own weaknesses. For example,
it may tend to persuade companies to compile lists rather than think about what is actually
important in achieving objectives. It also presents the resulting lists uncritically and without
clear prioritization so that, for example, weak opportunities may appear to balance strong
threats.

It is prudent not to eliminate too quickly any candidate SWOT entry. The importance of
individual SWOTs will be revealed by the value of the strategies it generates. A SWOT item
that produces valuable strategies is important. A SWOT item that generates no strategies is not
important.

4.1.3 Use of SWOT Analysis

The usefulness of SWOT analysis is not limited to profit-seeking organizations. SWOT analysis
may be used in any decision-making situation when a desired end-state (objective) has been
defined. Examples include: non-profit organizations, governmental units, and individuals.
SWOT analysis may also be used in pre-crisis planning and preventive crisis management.
SWOT analysis may also be used in creating a recommendation during a viability study/
survey.

4.1.4 Criticism of SWOT

Some findings from Menon et al. (1999) and Hill and Westbrook (1997) have shown that
SWOT may harm performance.

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