An Improved Swot Analysis

An improved SWOT approach for conducting strategic planning in the construction industry

Weisheng Lu

Abstract SWOT analysis (Strength, Weakness, Opportunity, and Threat) has been in use since the 1960s as a tool to assist strategic planning in various types of enterprises including those in the construction industry. Whilst still widely used, the approach has called for improvements to make it more helpful in strategic management. The project described in this paper aimed to study whether the process to convert a SWOT analysis into a strategic plan could be assisted with some simple rationally quantitative model, as an augmented SWOT analysis. By utilizing the mathematical approaches including the quantifying techniques, the “Maximum Subarray” method, and fuzzy mathematics, one or more Heuristic Rules are derived from a SWOT analysis. These Heuristic Rules bring into focus the most influential factors concerning a strategic planning situation, and thus inform strategic analysts where particular consideration should be given. A case study conducted in collaboration with a Chinese international construction company showed that the new SWOT approach is more helpful to strategic planners. The paper provides an augmented SWOT analysis approach for strategists to conduct strategic planning in the construction industry. It also contributes fresh insights into strategic planning by introducing rationally analytic processes to improve the SWOT analysis.

Keywords: SWOT, Strategic Planning, Strategy Management, construction companies

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Introduction It is generally considered that modern organizations should develop long term strategies in the face of an increasingly dynamic and competitive world. Porter (1980; 1985), for example, suggested that a company needs to develop a competitive strategy in order to achieve competitive advantage in a market economy. Miller and Cardinal (1994), by using meta-analytic data drawn from 26 previously published studies, reported...