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Paper
Application of Combined SWOT and AHP: A CaseStudy for a Manufacturing Firm
Authors: Ali Gorener, Kerem Toker, Korkmaz, Ulucay
Presenter: N.T.Kuong Application of Combined SWOT and AHP: A Case Study for a Manufacturing Firm 1 / 15
Contents
Contents
AHP- Analytic Hierarchy ProcessApplying AHP in SWOT analysis (Strengths, Weaknesses,Opportunities and Threats Analysis)
Aim of this case sudy:Analysing SWOT subfactors of a manufacturing firm in TurkeyRanking the factors and subfactors
Presenter: N.T.Kuong Application of Combined SWOT and AHP: A Case Study for a Manufacturing Firm 2 / 15
HIERARCHICAL STRUCTURE
MODEL 1
GOAL: Ranking Factors and subfactors
Factor 2 Factor 3Factor 1 . . .
Subfactor 1
Subfactor 2
.
.
.
Subfactor k
Subfactor 1
Subfactor 2
.
.
.
Subfactor m
Subfactor 1
Subfactor 2
.
.
.
Subfactor n
Prioritizing factorsPrioritizing subfactors locally or globally
Presenter: N.T.Kuong Application of Combined SWOT and AHP: A Case Study for a Manufacturing Firm 3 / 15
HIERARCHICAL STRUCTURE
MODEL 2(proposed 5 criteria and 3 alternatives)
GOAL: Ranking Alternatives
Criterion 3Criterion 2Criterion 1 Criterion 4 Criterion 5
Alternative 2Alternative 1 Alternative 3
Prioritizing criteriaPrioritizing alternatives based on each criterionOrdering the preferences of alternatives
Presenter: N.T.Kuong Application of Combined SWOT and AHP: A Case Study for a Manufacturing Firm 4 / 15
HIERARCHICAL STRUCTURE
Model 2Table of Weights
Decisive CriterionC1 C2 C3 C4 C5
Alternatives w1 w2 w3 w4 w5 WeightA1 a11 a12 a13 a14 a15 p1A2 a21 a22 a23 a24 a25 p2A3 a31 a32 a33 a34 a35 p3
Presenter: N.T.Kuong Application of Combined SWOT and AHP: A Case Study for a Manufacturing Firm 5 / 15
Saaty Scale
Pairwise Comparison Scale- Saaty Scale
Importance Explanation1 Two criteria contribute equally to the objective3 Experience and judgment slightly favor one over another5 Experience and judgment strongly favor one over another7 Criterion is strongly favored and its dominance is demonstrated in practice9 Importance of one over another affirmed on the highest possible order
2,4,6,8 Used to represent compromise between the priorities listed above
Presenter: N.T.Kuong Application of Combined SWOT and AHP: A Case Study for a Manufacturing Firm 6 / 15
Decision Matrix
Pairwise Comparison Matrix
A=
a11 a12 . . . a1na21 a22 . . . a2n
...an1 an2 . . . ann
aij : the importance of criterion Ai compared to criterion Aj in SaatyScaleaij = 1/aji or reciprocal
Presenter: N.T.Kuong Application of Combined SWOT and AHP: A Case Study for a Manufacturing Firm 7 / 15
Decision Matrix
Theoretical Weight Quotient Matrixof Criteria A1, . . . ,An
A1 A2 . . .AnA1A2. . .An
w1/w1 w1/w2 . . .w1/wnw2/w1 w2/w2 . . .w2/wn. . .
wn/w1 wn/w2 . . .wn/wn
︸ ︷︷ ︸
W
w1w2. . .wn
︸ ︷︷ ︸
w
= n
w1w2. . .wn
︸ ︷︷ ︸
w
wi is the theoretical/absolute weight of criterion Ai in group(A1,A2, . . . ,An)
Presenter: N.T.Kuong Application of Combined SWOT and AHP: A Case Study for a Manufacturing Firm 8 / 15
Decision Matrix
Theoretical matrix W and Pairwise comparison matrix A
Matrix W is reciprocal and consistent, i.e. aij = 1/aji , aijajk = aikwhile matrix A may not be consistentW has rank 1 and its max eigenvalue equals n (λmax = n)The largest eigenvalue of A is greater or equal to nConsistency Index (CI) of A:
CI =λmax − n
n − 1
λmax is A’s largest eigenvalueConsistency Ratio (CR) of A:
CR =CIRI
RI is the Random Index
Presenter: N.T.Kuong Application of Combined SWOT and AHP: A Case Study for a Manufacturing Firm 9 / 15
Decision Matrix
Calculating weights of criteria
Row Geometric Mean Prioritization Method
wi =
n
√n∏
j=naij
n∑i=1
n
√n∏
j=naij
Normalizing sums over rows with a large power
w =Ake
eT Ake, e = (1,1, . . . ,1)
Presenter: N.T.Kuong Application of Combined SWOT and AHP: A Case Study for a Manufacturing Firm 10 / 15
SWOT Analysis
Presenter: N.T.Kuong Application of Combined SWOT and AHP: A Case Study for a Manufacturing Firm 11 / 15
SWOT Analysis
Presenter: N.T.Kuong Application of Combined SWOT and AHP: A Case Study for a Manufacturing Firm 12 / 15
SWOT Analysis
Environment Scan
Internal Analysis External Analysis
Strengths
S1
S2
S3
S4
S5
Weaknesses
W1
W2
W3
W4
W5
W6
W7
Opportunities
O1
O2
O3
Threats
T1
T2
T3
T4
T5
T6
T7
Presenter: N.T.Kuong Application of Combined SWOT and AHP: A Case Study for a Manufacturing Firm 13 / 15
Overall Priority Scores of SWOT Factors
OVERALL PRIORITY SCORES OF SWOT FACTORS
Presenter: N.T.Kuong Application of Combined SWOT and AHP: A Case Study for a Manufacturing Firm 14 / 15
Overall Priority Scores of SWOT Factors
REFERENCES
[1] Ali Gorener, Kerem Toker, Korkmaz, Ulucay, Application ofCombined SWOT and AHP: A Case Study for a ManufacturingFirm, Social and Behavioral Sciences 58 (2012) 1525-1534.
[2] Thomas L. Saaty, How to make a decision: The AnalyticHierarchy Process, European Journal of Operational Research 48(1990) 9-26.
Presenter: N.T.Kuong Application of Combined SWOT and AHP: A Case Study for a Manufacturing Firm 15 / 15