Monday, April 18, 2011

Clascial Decision Making techniques - using SWOT


“If a man will begin with certainties he shall end his doubts; but if he will be content to begin with doubts he shall end in certainties.”

Francis Bacon

This technique originated in marketing but can be used in any area of decision making.

Four factors are taken into consideration:

  • Strengths: What are the strengths of the decision?

  • Weaknesses: What are the weaknesses?

  • Opportunities: What opportunities could exist if the decision is made?

  • Threats: What threats would exist if the decision is made?

Strengths and Weaknesses are internal factors

Opportunities and Threats are external factors

Strengths and Opportunities are helpful factors

Weaknesses and Threats are unhelpful factors

using the technique

Firstly you should define the objective of the decision. e.g. 'the objective is to generate more sales'. It is important to identify the objective clearly before starting the swot analysis and stick with that during the analysis. For instance 'generating more sales' may not 'generate more profit'. If you have decided that the first objective is the one you want to work with then stick with that during the analysis. You can always do other swots with other objectives, in fact it is often very useful to do a swot for a number of related objectives.

The usual way of running a swot analysis is to draw a square of 2*2 boxes on a piece of paper and write down ideas in each box:


For complex situations or group decision making you can use a large wall or desk space and post-it notes.

extending the external factors

The external factors in a swot are the 'opportunities' and 'threats' boxes. You can increase the number of items in each of these boxes by doing a pest analysis on them.

strengths and weaknesses

As with the other techniques for decision making you can apply the idea that 'all strengths are weaknesses and all weaknesses are strengths.
For example you can convert each strength to three weaknesses and each weakness to three strengths.

You can also convert each 'opportunity' to three 'threats' and each 'threat' to three opportunities.

It may also be possible to convert the 'internal' factors to 'external' factors and vice versa but you will probably find that these do not generate as many items.

making your decision

If the 'strengths' and 'opportunities' significantly outweigh the 'weaknesses' and 'threats' then it is likely that taking the decision will turn out to be a good one. If the opposite is true then it is likely that you should not make this decision or make an opposite one.

Remember if you don't get to any firm conclusion with this technique it is likely to be worthwhile for you to change your objective and run the swot analysis again.