SWot analysis Strategic

Strategic development and SWOT analysis

at the University of Warwick

Robert G. Dyson

Warwick Business School, University of Warwick, Coventry CV4 7AL, UK

Received 10 January 2002; accepted 9 September 2002

Abstract

SWOT analysis is an established method for assisting the formulation of strategy. An

application to strategy formulation and its incorporation into the strategic development

process at the University of Warwick is described. The

application links SWOT analysis to resource-based planning, illustrates it as an iterative

rather than a linear process

and embeds it within the overall planning process. Lessons are drawn both for the

University and for the strategy

formulation process itself.

Keywords: Strategic planning; SWOT analysis; Resource-based planning; Strategic

development

1. Introduction

The University of Warwick was founded in

1965, and in the thirtytive or so years since has

established itself as one of the UKs leading universities regularly featuring in the top ten of

the

various league tables constructed by the media

(e.g. The Times), and having a turnover of 160

million. Strategic development at the University of

Warwick has a mixture of components including:

the development annually of a corporate plan for

submission to the Higher Education Funding

Council for England (HEFCE); an annual tiveyear planning process undertaken by the

Strategy

Committee (a body comprising the principal off

cers of the University, who form the Steering

Committee, and a number of lay (external) members of the Universitys governing body,

the

Council); and the formulation and sometimes

adoption of strategic initiatives throughout the

year.

In the spring of 2001 the Steering Committee

considered that the corporate plan was due for

a radical overhaul. However, with a new ViceChancellor (chief executive) appointed and

due to

take up his post in the summer, it was agreed that

the Steering Committee would have a strategic

awayday which would aim to produce recommendations for future consideration. It was

agreed

that a SWOT analysis would form the core of the

awayday, which would be facilitated by the author

who was a member of the Steering Committee due

to his role as a Pro-Vice-Chancellor.

The paper first introduces SWOT analysis and

E-mail address: r.g.dyson@warwick.ac.uk (R.G. Dyson). its links to contemporary

planning methods such

doi:10.1016/S0377-2217(03)00062-6

European Journal of Operational Research 152 (2004) 631″€“640

www.elsevier.com/locate/dswas resource and competency-based planning. This

is followed by a description of an application of

SWOT analysis at the University. The SWOT

analysis is then set in the context of the Universitys strategic development process.

This featured issue of EJOR is concerned with

applications of soft OR approaches, with SWOT

analysis mentioned in that context. The author

has argued elsewhere (Dyson, 2000) that OR has

much to offer in the field of strategy support. It

must however be inclusive of methods including

hard and soft, but also should not con*ne itself

to methods with a traditional OR label. Dyson

and OBrien (1998) in their book on methods

and models for strategic development include

chapters on the balanced scorecard, visioning,

SWOT analysis, resource and competency-based

planning, cognitive mapping, scenario planning,

system dynamics, capital investment appraisal

and real options as examples of this inclusive

approach. This application is offered in that

spirit.

2. SWOT analysis

SWOT analysis aims to identify the strengths

and weaknesses of an organisation and the opportunities and threats in the environment.

Having

identified these factors strategies are developed

which may build on the strengths, eliminate the

weaknesses, exploit the opportunities or counter

the threats. The strengths and weaknesses are

identified by an internal appraisal of the organisation and the opportunities and threats by

an

external appraisal. The internal appraisal examines

all aspects of the organisation covering, for example, personnel, facilities, location,

products and

services, in order to identify the organisations

strengths and weaknesses (Fig. 1). The external

appraisal scans the political, economic, social,

technological and competitive environment with a

view to identifying opportunities and threats. A

variation of SWOT analysis is the TOWS matrix

(Fig. 2). In the TOWS matrix the various factors

are identified and these are then paired e.g. an

opportunity with a strength, with the intention of

stimulating a new strategic initiative.

An early example of the TOWS matrix is shown

in Fig. 3, adapted from an account by Heinz

Weihrich (1982). Volkswagen (VW) undertook

this strategic exercise in the early 1970s. At that

time they were concerned that the high labour

costs in Germany and the strong mark were

making it difficult to export to the US, the largest

market for cars in the world. The analysis, provided by the TOWS matrix, suggested that

VW

should build cars in the US as all pairings pointed

in that direction. For example the production

strengths coupled with the threat of the high mark

suggest building in the US rather than exporting

from Germany. In fact this strategy was adopted

but initially failed, as the company never overcame

a key weakness, their lack of US production exFig. 1. Internal appraisal, strengths and

weaknesses.

Fig. 2. The TOWS matrix.

Fig. 3. A TOWS matrix for VW.

632 R.G. Dyson / European Journal of Operational Research 152 (2004)

631″€“640perience. They were unable to come to terms with

the US car manufacturing culture. However they

later gained the benefits of the analysis by producing successfully in Central and South

America

and exporting to the US from there rather than

from Germany and thus overcoming the problems

presented by the strong mark and the high labour

costs.

3. Resource and competency-based planning

SWOT analysis has its origins in the 1960s

(Learned et al., 1965). In more recent years SWOT

analysis has been seen as somewhat outdated and

superceded by resource-based planning (Wenerfelt, 1984; Grant, 1991) and

competency-based

planning (Ulrich and Lake, 1990). The resourcebased view focuses on the internal

resources,

capabilities and core competencies of the organisation, and advocates building strategies

on these

foundations to assure the competitiveness of the

organisation and the attractiveness of the industrial sector (Fig. 4). Barney (1991) further

developed the resource-based view arguing that a

resource was strategic if it satisfied the criteria of

valuability (the capacity to increase the organisations effectivenesss and e*¯¬ƒciency),