The paper proposes to consider the use of such a classic risk analysis tool as a SWOT analysis in conjunction with the construction of a Markov model for further analysis of the elements of a SWOT matrix. A review of the areas of application of the SWOT analysis is suggested under the assumption that in all these cases, the approach described by the authors is also possible. It is proposed to use an extension of existing analysis methods based on the SWOT matrix, including TOWS and similar methods based on combinations of the effects of pairwise combinations of blocks of the SWOT matrix. We consider the option of constructing an adjacency matrix on the basis of the entire set of SWOT factors with its further analysis using both Markov methods and analysis of the number of connections that may arise in each particular case of applying this approach in an adjacency matrix of the corresponding order corresponding to the state when the matrix ceases to contain "empty" (equal to zero) elements. An example of a fragment of a real complex SWOT analysis implemented using Microsoft Excel software is given. It is proposed to use the described method in the management of portfolios of projects of organizations
Statement of the problem and purpose of the study. At present, more and more often
one has heard about the "death" of various classical instruments and management
methods. Unfortunately, it is often really difficult to disagree with the arguments of
such critics, because the examples of their use or interpretation of the corresponding
tools and methods make us recognize, at least, that this is a bad example. On the other
hand, this does not mean that the methods themselves are unsatisfactory. Rather, those
who use them unsuccessfully, and it seems that those who later deservedly criticize
such examples, do not fully understand the scope of this or that tool and its purpose.
The most striking example, perhaps of such criticism, is the most common (and
distributed) tool, such as SWOT analysis. For example, in one of such aggressively
negative works [
Indeed, it is hard to disagree with this. So is it worth or not worth doing a SWOT
analysis? This question is rather rhetorical. To make a decision “To do or not to do
something?” for starters, you should ask yourself what you’re going to do next with
the results of this “Anything?” In the same way we can talk about PEST analysis[
The authors of the SWOT analysis are rightfully considered to be members of a group
of scientists at Stanford Research Institute: R. Stewart (research leader), Marion
Dosher, Otis Benepe and Albert Humphrey (Robert Stewart, Marion Dosher, Otis
Benepe, Birger Lie, Albert Humphrey) [
And this source also noted that “exploring the organisation of strategic planning in
companies on the Fortune's 500 list, they eventually came to a system called SOFT:
Satisfactory, Opportunity, Fault, Threat. And only later this model was modified and
renamed to SWOT. The SWOT model was first published in 1966, the final
modification of the SWOT analysis was presented by the authors in 1973 [
Although, for the first time, the SWOT acronym was publicly announced in
Harvard in 1963 at a conference on business policy issues by Professor Kenneth
Andrews, who is probably also worth mentioning as the “co-parent” of this method. It
might still be fair to consider Dr. Heinz Weirich as a “follower” and, in what form,
“co-author” of this method, for his very successful proposal to present SWOT as a
2x2 matrix in 1982 [
It is also worth noting a very comprehensive study on goals similar to our study,
which, unfortunately, was discovered by the author almost when he completed his
work. In this work [
As a “definition” we take the most restrained definition [
Although, today, he feels quite confident, for example, in the field of risk
management, although he is still not always fully consciously applied there [
At least several areas of application of the SWOT method can be distinguished. At the same time, we will try to avoid "general definitions" such as "in the field of marketing." So, these may be the following areas:
Suggested research of dynamic changes in the company’s environment based on
the study of three separate SWOT lists of indicators that describe the external factors
of threats and opportunities, internal factors of strengths and weaknesses. This
approach is developing as a “dynamic SWOT analysis”. Usually, when implementing a
dynamic SWOT analysis, three planning horizons are used (past, present, future) or
(present, near future, distant future) [
It was noted in [
It is worth noting that in modern ISO standards, for example [
Currently, within the framework of strategic planning technologies, SWOT analysis is considered as a separate stage in the assessment and structuring of information collected in accordance with the classic PEST models, Porter models, etc.
Each individual factor reflected in the model is evaluated from the position of the
SWOT model. Next, a strategy is developed based on a joint analysis of factors and
their SWOT models. An example of the use of SWOT analysis in conjunction with a
modified 5-factor Porter model and the 7K McKinsey model is presented, in
particular, in the training materials of the Belarusian State University [
The methods for applying SWOT analysis to study the factors on which the choice
of strategies depend are constantly being improved. So in 2003, prof. George
Panagiotou suggested studying environmental factors using SWOT analysis according to
the TELESCOPIC OBSERVATIONS scheme [
A real discovery for the author was his acquaintance with the work [
SWOT-Radar Screen ™ refers to the multi-level SWOT matrix at the following three levels: systems, subsystems and supersystems. For organisation, elements at different levels include the following: supersystem level (external resources); system level (internal resources - mainly intangible assets); the subsystem level (Internal Resources - Mostly Tangibles) includes information about such organisation subsystems (Business Unit (s), Enterprise (s), or Departments).
The above multi-level perspective of the system mainly uses ideas from the
concept of a “multi-screen” in TRIZ [
Also in this article, so widely quoted by us, it is indicated that a multi-level SWOT matrix with high-quality descriptions of strengths and weaknesses, opportunities and threats is called, according to the authors, SWOT-Radar Qualitative Screen ™. When strengths and weaknesses, opportunities and threats are quantified, balanced and aggregated, a multi-level SWOT matrix is called the SWOT-Radar Quantitative Screen ™. Those, its use is possible both during the qualitative and quantitative analysis of the organisation.
In SWOT-Radar Quantitative Screen ™, the content of strengths and weaknesses
is summarized in an indicator such as “current degree of conflict”. Mathematically,
and using, for example, multicriteria analysis [
Type I: desired parameter [P (+)] compared to the undesired parameter [P (-)] As for the SWOT analysis, the “desired” parameter refers to the “strength” or “opportunity” indicator. An “unwanted” parameter refers to “weakness” or the “Threat” indicator.
Type II: desired parameter [P (+)] versus desired parameter [P (+)]
Let us cite as an example, with reference to the same source [
I-CCEM Approach for Problem Solving and Crisis Planning. The structure, which
integrates SWOT analysis, Bipolar Conflict Graph ™ and TRIZ, is called I-CCEM
™. This acronym, I-CCEM, means the following: "Perfect conflict creation,
elimination and management." The main tools for the I-CCEM ™ infrastructure are the
CDMAGIC cycle, SWOT-Radar Screen ™, and Creative Web Template ™. Central to
the structure of the CD-MAGIC cycle and the Creative Web Template is the Creative
Web model. Creative Web is a common model and macrostructure for solving
creative problems. At the meso level, Creative Web could be roughly translated into the
CD-MAGIC cycle. The abbreviation, “CD-MAGIC”, is an extension of the
wellknown “DMAIC” process [
Of course, it would be strange if, for such a long history of using SWOT analysis in business, there would have been no attempt to transfer this technique to a specific person (person). There are a huge number of such attempts, on the whole slightly differing from each other, for example [31].
SWOT, as a technique, is also mentioned in a collection of instruments such as BUSINESS ANALYSIS TECHNIQUES 72 Essential Tools for Success, published by British Informatics Society Limited (BISL), a division of BCS - The Chartered Institute for IT [32].
SWOT analysis is also one of the techniques used in conducting “foresight” studies [33].
The goal of the paper is: to give a modern reading of the well-known tool of SWOT analysis, to determine the areas of its application in the new conditions of enterprise development, and also to propose a mathematical apparatus based on Markov chains for analyzing a set of factors included in the SWOT analysis, which would make the most efficient use of this tool in risk management practice both in project activities and organization management. 4
As an example of the use of SWOT analysis in the practice of managing a real organisation, the following analysis can be cited for the needs of risk management. It was carried out on the basis of the “extended model” - when the analysis of the interactions between all elements of each block was carried out, and not only in the influence of, for example, “block S” on “block O”, as in the examples considered above, but also taking into account the interactions and inside the “blocks” themselves. The results of this analysis are presented in Fig. 1. If there was an influence of one factor on another, a unit was put in the corresponding cell, in the absence, zero.
For further research described using the SWOTxSWOT matrix “assembled” according to the indicated principle, it is necessary to carry out some more actions.
Firstly, to carry out its “reorganisation” so that there are no “empty” elements in it, so that mathematical methods can be used for further analysis. Thus, an “adjacency matrix” was formed for the entire “system of elements” consisting of a set of “factors” grouped by the corresponding “blocks”. Moreover, in the considered example, the following “sequence” of blocks in the risk matrix is demonstrated, which allows maximum use of information on the structure of mutual influences (connections) of the entire system of elements, as shown in Fig. 2.
In the presented logic, the following four “submatrices” are clearly visible SOxSO, SOxTW, TWxSO and TWxTW. Each of them, in turn, is “assembled” from four more “sub-submatrices”, for example, SOxSO is “assembled” from four blocks such as SxS, SxO, OxS and OxO.
Similarly, the TWxTW submatrix can be interpreted, but with a negative sign. If SOxSO could be considered as a “value multiplier”, then TWxTW should be considered as a “threat multiplier”, not to say “crises” or “catastrophes” (including for cases of considering both organisational and technical systems).
Fig 1. The logic of constructing a “full SWOT” in the form of a matrix SWOTxSWOT (screenshot for author’s Excel model file fragment).
The SOxTW submatrix should be considered as a “stabilizing” component of the system, which allows you to level out negative effects in the internal and external environment of the organisation with existing internal strengths and the ability to use external capabilities.
TWxSW, in turn, should be considered as a “destabilizing” component, capable of annihilating certain organisational strengths (positive internal factors), and “nullifying” opportunities that are outside the organisation.
Further analysis of the adjacency “matrix” built on such principles (as well as the completely obvious “1” and “0” in this matrix - the presence or absence of the influence of a particular element in the row on another specific element in the column, taking the diagonal elements equal to zero). Methods of analysis of such systems have been described previously [34, 52].
If we conduct further research of the constructed system under the assumption that it is Markovian, then we can draw conclusions about the potential presence of such factors in the existing system, in particular, by constructing transient diagrams based on the determination of transition probabilities.
For the example under consideration (the factors themselves - their names and descriptions - in this case, we do not demonstrate due to the fact that this is a real business system), when constructing the primary simplified model, it was suggested that the transitions from one state to another be considered equally probable. Thus, the matrix of transition probabilities was constructed, as shown in Fig. 3: Fig 3. Transition probability matrix for the considered matrix structure SOTWxSOTW (screenshot for author’s Excel model file fragment).
Based on the presented matrix, it is possible to construct the corresponding diagrams (Figure 4), which visually show the influence of the system of factors under consideration in their interaction, which is especially important at the initial stage of the project implementation, or the organisation’s activity (which, until it reaches a stable state, is also, rather, still is a “project” (“program”, “portfolio”) in the context of a “temporary enterprise”).
Similar elements of the analysis have already been successfully used previously [35]. The next step in conducting such an “extended” SWOT analysis may be to visualize the considered system of factors in terms of identifying, on the one hand, the most “strong”, “influencing” factors, regardless of the sign of their influence, on the entire system under consideration.
Fig. 4. Visualization of transients for the considered structure of the elements of the SOT
WxSOTW matrix (screenshot for author’s Excel model file fragment).
On the other hand, the identification of those factors that will be most susceptible to influence from the whole system as a whole, but through the influence of its specific elements. Similar logic was used in the analysis of the ICB IPMA model [36, 53].
Having carried out such transformations, we obtain the following “system landscape” for the considered system of factors (Fig. 5).
Fig. 5.“ System landscape” for the considered structure of the matrix elements SOTWxSOTW in a table view (screenshot for author’s Excel model file fragment).
The resulting representation allows, in turn, to carry out further segmentation, the simplest version of which will be to divide the matrix under consideration into 4 quadrants. The first (upper left) will include the elements with the greatest influence (in this case, it could be elements 11, 5, 4, 10, 2, 12, 1), as well as those that experience the greatest influence (2, 10, 13, 4, 15, 1, 11) — as an example of applying Pareto rule [37] logic for future decision.
This information can significantly help in prioritizing the work with the factors under consideration (as happened in this real example, for which the visualizations presented were constructed, but without specifying the set of the most significant factors involved in the analysis).
The visualization of “peaks” and “lowlands” obtained in this way, by analogy with the physical maps of the world, can be even more visualized from a tabular representation.
The resulting matrix, for greater clarity, can be converted by built-in Excel functionality to a surface chart, for which the use of the word "landscape" will be as natural (Fig. 6). And finally, the final task of the study was "to give appropriate recommendations on the use of SWOT analysis." We use for this purpose the time-tested way of working with “problem trees”, transforming them into “decision trees”. Why rework the previously obtained list of restrictions:
5.1. The simplest use of the SWOT analysis element is to use the “SWOT matrix” itself as a tool for structuring the available information. This, at a minimum, helps to visualize the main factors.
5.2. The task of assessing, in a first approximation, the mathematical expectation of certain events represented (located) in the corresponding segments of the “SWOT matrix” should be considered in the context of the particular issue (situation) under consideration. Formulating recommendations based on this information is the work of a good analyst, preferably armed with statistical data in the context of a specific organization and context.
5.3. To conduct a SWOT analysis, attract experts with a very deep understanding of the current state and development trends of the market, or prepare to conduct a very large amount of work on the collection and analysis of primary information to achieve this understanding.
5.4. No matter how you try to “take everything into account” when creating the “SWOT matrix” table (including unnecessary factors or the loss of important factors, incorrect estimation of weight coefficients and mutual influence), there will always be a risk that decision-making based solely on the “SWOT matrix” may still lead to incorrect conclusions and erroneous strategic decisions.
5.5. The interpretation of the resulting model, and therefore the quality of conclusions and recommendations, strongly depends on the qualifications of the experts conducting the SWOT analysis.
5.6. Fight possible threats to the quality of the SWOT analysis itself: • Excessive lists of strengths and weaknesses, opportunities and threats - “all about everything” - are not needed! Consider only what lies in the context of the problem (project, program, portfolio) in question !; • Ensure prioritization of factors !; • Try to ensure that the factors are described as specifically as possible (in relation to the issue in question);
• Remember that everything that is in the “Internal Factors” (“Strengths” and “Weaknesses”) is always facts and only facts;
In addition to the recommendations already presented here, made on the basis of
the analysis of restrictions, one probably will not be able to give any new
“super-recommendations”, moreover, such people have already been found -
someone with the release of the “Fundamental” SWOT analysis guide ” [
It is worth mentioning separately the place of SWOT in the list of tools and methods in other fields of activity, for example, in the already mentioned risk management [41], human resource management [42], decision making [43], project management [44].
The main recommendation, perhaps, will be the recommendation that those who
are going to use the SWOT analysis clearly understand that the SWOT matrix itself
(which, with some flaws, but many have already learned to do) only allows you to
“pack” collected facts about the internal and external organisational environment, but
everything is not an “analysis”. For the effective use of this method, it is worth at
least familiarizing yourself with the description of its application practice, analyzing
examples of its use, understanding the mathematical apparatus, in the case of using
more complex modifications of the analysis - using “weights”, “probabilities”,
“impact assessment”, etc. d., both in quantitative measurements and with the use of
qualitative scales. For example, the already mentioned “Fundamental Guide to SWOT
Analysis” [
Also, if you understand the practical effect of the application of this method, it is worth listening to the recommendation to do it regularly [46].
And so that the “base” for such a dynamic comparison is suitable for comparison, develop your own set of forms and templates for analysis [47], for example, taking the set as the basis [48]. In case you need to visualize the data obtained, it may be worth considering the use of specialized software, for example, similar [49]. And if you need something to work in the field of education, it will be useful to consider the functionality of such a system [50]. If you are interested in using SWOT analysis in a small business, then you may be interested in the following selection of tools [51].
As seen from the results of the study, the SWOT analysis has its own, very interesting and rich history. It was created directly “inside” a serious practice-oriented project aimed at analyzing the problems of more than “real” organizations. The use of this method is very useful in many fields of activity, including even such as “competitive intelligence”.
In general, the SWOT model helps to make better decisions - both large and small. It allows you to evaluate the effectiveness of actions - from launching a new product or service to merging with another organization or acquiring a subsidiary. SWOT is a method that, when used correctly, gives only positive results.
On the other hand, as even this small study showed, SWOT penetrated a huge number of other methods and approaches, complementing the analysis tools in various fields of activity. Perhaps this is worthy of a separate, more in-depth study of this kind of relationship, for example, using an approach similar to that applied to the analysis of the relationship of the elements of competence of project managers. 30. About Microsoft https://www.microsoft.com/en-us/about 31. SWOT-analysis of the activities and personal qualities of a person http://formaetsensum.ru/swot-analiz-deyatelnosti-i-lichnykh-kachestv-cheloveka.html 32. SWOT Does Not Need To Be Recalled: It Needs To Be Enhanced http://www.westga.edu/~bquest/2000/swot1.html 33. James Cadle, Debra Paul, Paul Turner. Business analysis techniques. 72 Essential Tools for Success. In: British Informatics Society Limited (BISL). ISBN 978-1-906124-23-6 34. Vaysman V. A., Kolesnikova E. V., Lukianov D. V. The planar graphs closed cycles determination method. In: Pratsi Odessa Polytechnic University. vol 1, pp. 222-226 (2012) 35. Chernova L. S. et al. Development of an approved model for the recognition of Markov lanterns for foresight methodologies. In: News of the Odessa National Marine University 60, pp.171-189 (2019). 36. Lukianov D., Mazhei K., Gogunskii V. Transformation of the International Project Management Association Association Project Managers Individual Competencies Model. In: 1st IEEE International Conference on Advanced Trends in Information Theory, pp. 506512. IEEE Press, Kyiv (2019). 37. Understanding the Pareto Principle (The 80/20 Rule).
https://betterexplained.com/articles/understanding-the-pareto-principle-the-8020-rule/ 38. A useful guide to SWOT-analysis. http://www.cii.co.uk/media/6158020/a-useful-guideto-swot-analysis.pdf 39. SWOT Manual. http://www.austincc.edu/oiepub/services /SWOT%20Manual%20AY13_v1.pdf 40. The Essential Guide to SWOT Analysis. http://www.co2partners.com/essential-guideswot-analysis/ 41. Risk Identification tools and techniques. https://www.greycampus.com/opencampus/certified-associate-in-projectmanagement/risk-identification-tools-and-techniques-in-capm 42. SWOT Analysis in Human Resources. http://www.creativehrm.com/hr-swot-analysis.html 43. Why you should do a SWOT analysis for project management? https://projectmanagement.com/why-you-should-do-a-swot-analysis-for-project-management 44. SWOT Analysis. https://www.projectmanagement.com/wikis/233091/SWOT-Analysis 45. SWOT analysis of steel re rolling mills. A comparative study of international brand with a local brand. http://www.ijsrp.org/research-paper-1213/ijsrp-p2413.pdf 46. Dealtry, R. Dynamic SWOT Analysis, DSA Associates, Birmingham (1992) 47. Haberberg, A. Swatting SWOT. In: Strategic Planning Society. (2000). 48. Technique for carrying out a set of questions for systematizing SWOT analysis and synthesis of strategy. http://www.masterplans.ru/files/SWOT_tehnika.pdf [in Russian] 49. Create an awesome SWOT analysis with Canva.
https://www.canva.com/templates/EADaowEZ6Ok-swot-analysis-mind-map/ 50. SWOT analysis of innovations and innovative projects. http://www.innovationanalysis.ru/swot.html [in Russian] 51. 8 SWOT analysis tools for small businesses. https://www.businessnewsdaily.com/6828swot-analysis-tools.html 52. D.V. Lukyanov, E.V. Kolesnikova, V.D. Gogunsky. The method of structural analysis of competence NCB. In: Project Management for Development of Suspension, pp. 135-136 (2016) 53. Kolesnіkov, O. et al. Development of the model of interaction among the project, team of project and project environment in project system. In: East European Journal of Advanced Technologies, vol. 5 (9), pp.20-26 (2016).