Weakness . . . or Strength Notes

Weakness . . . or Strength Notes - Weakness or Strength...

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Weakness . . . or Strength Adam Brandenburger * Version 01/20/15 1 Introduction One of the most enduring business-strategy tools is SWOT analysis , where SWOT stands for Strengths, Weaknesses, Opportunities, Threats. The tool was developed at Harvard Business School in the 1960s and can be found in a 1971 book 1 summarizing that work. As originally conceived, this framework was divided into an internal and an external part. The internal part comprised the Strengths and Weaknesses boxes, which ask strategists to decompose and assess elements of their own organizations in this way. The external part comprised the Opportunities and Threats boxes, which ask strategists to scan the elements of the landscape made up of other organizations, even of society as a whole, and assess their nature accordingly. 2 Adding Perceptions Strength Weakness Weakness Strength Perception Reality Self: Threat Opportunity Strength Weakness Weakness Strength Perception Reality Other: Threat Opportunity Figure 1 The original SWOT framework did not distinguish between reality as perceived and reality as it is. Yet gaps between perception and reality can have great strategic significance. There can be a gap between how we perceive some aspect of ourselves or our own organizations to be, and how that aspect really is. There can be a gap between how we perceive some aspect of another entity to be, * Stern School of Business, Polytechnic School of Engineering, Institute for the Interdisciplinary Study of Decision Making, Center for Data Science, New York University, New York, NY 10012, U.S.A., [email protected], adambrandenburger.com.
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and how that aspect really is. Figure 1 depicts these possibilities — for “self” and “other” — and links them to opportunities and threats, as we shall now examine. 3 Perceptions of Self The left-hand matrix concerns “self,” and the perceptions are to be thought of as our perceptions of ourselves. The bottom-left and top-right cells in the matrix are the cases where we perceive ourselves to be weak (respectively, strong), while, in fact, we are strong (respectively, weak). Let us now give examples of these two cases, and, in doing so, we will see why we have labeled the cells with “opportunity” and “threat,” respectively. We start with the bottom-left cell. The main theater of World War I (1914-18) was in Western Europe, where, soon after the outbreak of war, the two sides dug in along a long line of trenches extending from the North Sea to Switzerland. A deadly stalemate ensued, with enormous loss of life on both sides. In the Middle Eastern theater, the principal players were Britain on the Allied side (Britain, France, and Russia), and the Ottoman Empire on the Central Powers side (Germany, Austria-Hungary, and the Ottoman Empire). The British looked for ways to knock the Ottoman Empire, the weakest player, out of the war. The Ottoman Turks were facing growing independence movements within their empire, Arab nationalists included, and a British captain, T.E. Lawrence, was dispatched to help the newly formed and poorly equipped Arab armies fight the Turks. Rather than a weakness, Lawrence saw
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