Application of Combined SWOT and AHP: A Case Study for a Manufacturing Firm

Application of Combined SWOT and AHP: A Case Study for a Manufacturing Firm

Ali Görener
Kerem Toker
Korkmaz Uluçay

https://doi.org/10.1016/j.sbspro.2012.09.1139

SWOT analysis functions as a strategic framework for evaluating internal strengths and weaknesses alongside external opportunities and threats to inform decision making. While it provides a systematic outline for environmental scanning, the traditional method lacks a quantitative mechanism for determining the relative importance of individual factors. Integrating this framework with the Analytic Hierarchy Process (AHP) addresses this limitation by decomposing complex problems into a multilevel hierarchical structure consisting of goals, criteria, and alternatives. This combined SWOT and AHP model utilizes pairwise comparisons and eigenvalue calculations to prioritize strategic factors, ensuring that the resulting strategies align with both environmental realities and the specific objectives of decision makers.

The Analytic Hierarchy Process operates through three primary principles: model structuring, comparative judgment, and the synthesis of priorities. A decision problem is first organized into a hierarchy, typically featuring the overall goal at the top, multiple criteria in the middle, and alternatives at the lowest level. Using a standardized comparison scale ranging from 1 to 9, experts perform pairwise comparisons to determine the relative influence of elements at each level. The reliability of these subjective judgments is verified through a Consistency Ratio (CR), where a value below 0.1 indicates that the evaluations are sufficiently consistent for calculating final priority weights.

The SWOT-AHP model enhances strategic planning by converting qualitative assessments into commensurable quantitative values. This methodology follows a three step process: identifying relevant internal and external factors, calculating the weights of the four SWOT groups, and determining the relative priorities of specific factors within those groups. Multiplying local factor weights by their respective group weights produces an overall rank, which has been applied across diverse fields such as forest management, tourism planning, and industrial competitiveness to provide a more rigorous basis for strategic implementation.

Implementing the Methodology and Application involves a three phase strategic management model that transitions from an initial environment scan to a final evaluation. In the building model phase, industrial characteristics and literature are used to structure the initial SWOT matrix. The second phase focuses on modifying the model, where a team of experts confirms the relevance of the identified factors. Finally, the building evaluation model phase utilizes AHP to digitize the framework, resulting in an aggregated matrix that identifies the most critical issues for an organization, such as product quality or market reliability, based on their calculated priority scores.

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