Strategy: Create and Implement the Best Strategy for Your
Business- Chapters 1 & 2
By: Harvard Business Essentials
Summary:
The first two chapters of this book analyze SWOT analysis
and examine the external environments of opportunities and threats while also
looking internally for strengths and weakness. The SWOT model provides choices
to help make practical goals and strategies for better operations within
organizations.
According to Harvard Business Essentials, SWOT is categorized as:
“Strengths
are capabilities that enable your company or unit to perform well –
capabilities that need to be leveraged. Weaknesses
are characteristics that prohibit your company or unit from performing well and
need to be addressed. Opportunities
are trends, forces, events, and ideas that your company or unit can capitalize
on. Threats are possible
events or forces outside of your control that your company or unit needs to pan
for or decide how to mitigate.”
Every organization has goals; to achieve these goals,
organizations may use SWOT to clarify and envision the challenges they face.
Considering an organization’s external (Opportunities and Threats) and internal
(Strengths and Weaknesses) factors are vital because they clarify the issues
and facilitate the organization to do better. For example, the first chapter
identifies technology and substitutes as both internal and external threat
factors. Using both of these factors to
uncover threats and opportunities may affect the organization’s mission and
plan. Internally, strengths and weaknesses can identify and change core competencies
within organizations.
According to Harvard Business Essentials, different trends may
affect businesses and form the basis of a new strategy; therefore, uncovering
an area in which significant change is happening. To help the process, the book outlines nine
basic steps for establishing a collection method:
“Step 1: Select an individual to facilitate
the analysis
Step 2: Create a SWOT team of knowledge
individuals from different functional areas of the company
Step 3: Brainstorm the company or unit’s
strengths.
Step 4: Record all suggestions on a flip
chart
Step 5: Consolidate ideas. Post all flip
chart pages on a wall.
Step 6: Clarify ideas.
Step7: Identify the top three strengths
Step 8: Summarize company strengths.
Step 9: Repeat steps 2-6 for company or unit
weaknesses.”
An organization should conduct these nine steps for both the
external and internal factors. After these nine steps are completed, the
information should be complied and put into a formal report for management to
review.
Critique:
Although the first two chapters of this book are a good
explanation of SWOT analysis, the publication does not go into detail on any of
the concerns SWOT conveys. Although organizations value information, one weakness
is that management may not utilize the information provided. In addition, the
collection method provided could be time consuming and become redundant by
providing information already known by the organization. However, the book did
provide valuable examples and tips which makes SWOT analysis a strategic value.
For example, for SWOT to take effect, organizations need to be respectful and
effective to change. People need to feel motivated and accustomed to working in
groups and organizations need to provide rewards for good performance.
Source:
Press, Harvard Business School. 2005. Strategy:
Create and Implement the Best Strategy for Your Business. Boston, Mass:
Harvard Business School Press.
Posts
I like how the nine step process referenced above is referred to as a collection method. A pervasive mindset that Finnegan found in the SWOT article I reviewed was a tendency to see the four quadrants as the final "output" of the technique. Guiding the organization on what to do with the findings and how to execute a plan is completely different then simply filling in the quadrants.
ReplyDeleteThe article I reviewed found that "using SWOT (even if only informally) breaks down “silos” within organizations, promotes communication within all areas of an organization, allows for the organization to gain perspective about a situation from multiple levels.."
We know that time is a scarce resource, do you think that the potential to break down silos within an organization is greater than the risk of collecting redundant information via SWOT?
What does a company do once they have collected their 3 strengths and weaknesses? Additionally, are there any guidelines in determining the strengths and weaknesses?
ReplyDeleteI think to break down silos it will take more than a quarter, therefore, the information gather may be redundant. If a company processed SWOT every year, or twice a year that may change the outcome and minimize the risk.
ReplyDeleteJohn, once the company collects their three strengths and weaknesses they conduct a SWOT. The book does not offer advice for guidelines, just the nine step process.
ReplyDelete