What Is the Key to Effective SWOT Analysis, Including AQCD Factors

By David, Fred R.; Creek, Steven A. et al. | SAM Advanced Management Journal, Winter 2019 | Go to article overview

What Is the Key to Effective SWOT Analysis, Including AQCD Factors


David, Fred R., Creek, Steven A., David, Forest R., SAM Advanced Management Journal


Despite the widespread use of strength, weakness, opportunity, and threat (SWOT) analyses in both practice and strategic management classrooms, vagueness within them hinders their effectiveness. This paper reveals how and why the key to effective SWOT analyses is the inclusion of external and internal factors that meet actionable, quantitative, comparative, and divisional (AQCD) criteria. We explain how AQCD factors help to minimize misinterpretation and pave the way for the specific strategy generation which enables the assignment of costs to each action.

Introduction

Thousands of organizations and companies annually perform analyses of their strengths, weaknesses, opportunities, and threats (SWOT), but most of those entities embed an excessive amount of vagueness in the process. Vagueness is disastrous in strategic planning (George & MacMillan, 1985; Love, Priem, & Lumpkin, 2002), thus providing the impetus for this paper. Underlying external and internal factors that comprise SWOT analysis need to be specific in order to provide an adequate foundation for the generation of strategies (David, David, & David, 2017). The need for specificity is where actionable, quantitative, comparative, and divisional (AQCD) criteria come into play. SWOT analysis is arguably the most widely used strategic planning tool in the world, and AQCD factors are mandatory for its success.

The key to effective SWOT analysis is the inclusion of external and internal factors that meet AQCD criteria. Specifically, each external and internal factor included in a SWOT analysis needs to be stated in AQCD terms to minimize misinterpretation and to pave the way for the generation of strategies that are sufficiently specific, enabling the assignment of costs to those actions. The need for specificity is too commonly neglected, both in strategic planning and in performing case analysis in strategic management classroom settings.

The AQCD Test

When identifying and prioritizing key external and internal factors in strategic planning, all SWOT factors need to meet AQCD criteria to the extent doing so is possible. The purpose of external and internal assessments is to develop a finite list of opportunities that could benefit a firm, threats that should be avoided or mitigated, strengths that need to be capitalized on, and weaknesses that need to be improved on (Capps III & Glissmeyer, 2012). As the term finite suggests, the external and internal assessments are not aimed at developing an exhaustive list of every possible factor that could influence the business. Thus, each SWOT factor should be specific and useful, which the AQCD test aims to ensure. Normally, 10 opportunities, 10 threats, 10 strengths, and 10 weaknesses comprise the foundational information in a SWOT analysis (Freedman & Van Ham, 1982; Kearns, 1992).

Actionable

In a SWOT analysis, the term actionable refers to the need for each external and internal factor to be meaningful and helpful in ultimately deciding what actions or strategies a firm should consider pursuing. When actionable, firms are able to respond either offensively or defensively to the factors by formulating strategies that capitalize on external opportunities, minimize the impact of potential threats, take advantage of strengths, and/or improve on weaknesses. Actionable factors should be specific and within the control of management (Coman & Ronen, 2009). Thus, to include a factor such as "the firm's current ratio is 2.25" is not actionable because it gives no insight on what to do about the issue.

Quantitative

The importance of quantitative strategic planning has long been advocated in management literature (e.g., David, 1986; Tavana & Banerjee, 1995). In a SWOT analysis, the term quantitative refers to the need for each external and internal factor to include percentages, ratios, dollars, and numbers to the extent possible. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

What Is the Key to Effective SWOT Analysis, Including AQCD Factors
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.