BSC SWOT
Encyclopedia
BSC SWOT, or the Balanced Scorecard SWOT analysis, was first introduced, in 2001, by Lennart Norberg and Terry Brown.
BSC SWOT is a simple concept that combines the two powerful tools BSC (Balanced Scorecard
) and SWOT
analysis when identifying factors that drives or hinders strategy
. The four perspectives in BSC is combined with the four dimensions of SWOT in a matrix where findings may be inserted.
Example:
The full matrix looks like this:
The traditional SWOT analysis would look at external factors when looking at opportunities and threats. However the BSC SWOT would consider these attributes from both an external and internal perspective. Each field in the matrix may be looked upon as a question. For instance: 'What are my internal strengths?' or 'What opportunities do I have with my people?'. The BSC SWOT concept works best if a full understanding of BSC and SWOT analysis exists in order to create the right outcome.
The BSC SWOT is used for several important purposes:
The results from a BSC SWOT analysis is usually not a finished outcome. It must be further developed and refined in order to be actionable, for instance by developing a Strategy map
. However its use will usually save a lot of time since it is far less time consuming than a traditional SWOT for instance. Its design to match the use of Balanced Scorecard is specific to this purpose, but may be used as a generic tool when appropriate, for instance when analyzing the quality of current strategy or when investigating Causality
relationships between different objectives.
BSC SWOT is a simple concept that combines the two powerful tools BSC (Balanced Scorecard
Balanced scorecard
The Balanced Scorecard is a strategic performance management tool - a semi-standard structured report, supported by proven design methods and automation tools, that can be used by managers to keep track of the execution of activities by the staff within their control and to monitor the...
) and SWOT
SWOT analysis
SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses/Limitations, Opportunities, and Threats involved in a project or in a business venture...
analysis when identifying factors that drives or hinders strategy
Strategy
Strategy, a word of military origin, refers to a plan of action designed to achieve a particular goal. In military usage strategy is distinct from tactics, which are concerned with the conduct of an engagement, while strategy is concerned with how different engagements are linked...
. The four perspectives in BSC is combined with the four dimensions of SWOT in a matrix where findings may be inserted.
Example:
- To identify FINANCIAL (first perspective of the BSC) STRENGTHS (the first dimension of SWOT analysis).
- Or to identify INTERNAL PROCESS (third perspective of the BSC) WEAKNESSES (the second dimension of SWOT analysis).
The full matrix looks like this:
| STRENGTHS | WEAKNESSES | OPPORTUNITIES | THREATS | |
|---|---|---|---|---|
| FINANCIAL | financial strengths | financial weaknesses | financial opportunities | financial threats |
| CUSTOMER | customer strengths | customer weaknesses | customer opportunities | customer threats |
| INTERNAL PROCESSES | internal strengths | internal weaknesses | internal opportunities | internal threats |
| PEOPLE1 | people strengths | people weaknesses | people opportunities | people's threats |
The traditional SWOT analysis would look at external factors when looking at opportunities and threats. However the BSC SWOT would consider these attributes from both an external and internal perspective. Each field in the matrix may be looked upon as a question. For instance: 'What are my internal strengths?' or 'What opportunities do I have with my people?'. The BSC SWOT concept works best if a full understanding of BSC and SWOT analysis exists in order to create the right outcome.
Using BSC SWOT
As this tool is more or less a matrix that captures findings it can be a time saver when developing strategy or when initiating such alternatives from a wider perspective. The ease of use and simple layout is its strengths. A full cycle when using this tool should not exceed 2 days.The BSC SWOT is used for several important purposes:
- To refine a SWOT analysis that already exists
- To facilitate a discussion in a general management team when clarifying strategic opportunities and/or pitfalls
- When making a transition from a more traditional strategic planningStrategic planningStrategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy. In order to determine the direction of the organization, it is necessary to understand its current position and the possible avenues...
to the Balanced Scorecard, also with the use of a Strategy mapStrategy mapA strategy map is a diagram that is used to document the primary strategic goals being pursued by an organization or management team. It is an element of the documentation associated with the Balanced Scorecard, and in particular is characteristic of the second generation of Balanced Scorecard...
The results from a BSC SWOT analysis is usually not a finished outcome. It must be further developed and refined in order to be actionable, for instance by developing a Strategy map
Strategy map
A strategy map is a diagram that is used to document the primary strategic goals being pursued by an organization or management team. It is an element of the documentation associated with the Balanced Scorecard, and in particular is characteristic of the second generation of Balanced Scorecard...
. However its use will usually save a lot of time since it is far less time consuming than a traditional SWOT for instance. Its design to match the use of Balanced Scorecard is specific to this purpose, but may be used as a generic tool when appropriate, for instance when analyzing the quality of current strategy or when investigating Causality
Causality
Causality is the relationship between an event and a second event , where the second event is understood as a consequence of the first....
relationships between different objectives.
See also
- Porter generic strategiesPorter generic strategiesMichael Porter has described a category scheme consisting of three general types of strategies that are commonly used by businesses to achieve and maintain competitive advantage. These three generic strategies are defined along two dimensions: strategic scope and strategic strength. Strategic scope...
- Strategy dynamicsStrategy dynamicsThe word ‘dynamics’ appears frequently in discussions and writing about strategy, and is used in two distinct, though equally important senses.The dynamics of strategy and performance concerns the ‘content’ of strategy – initiatives, choices, policies and decisions adopted in an attempt to improve...
- Strategic managementStrategic managementStrategic management is a field that deals with the major intended and emergent initiatives taken by general managers on behalf of owners, involving utilization of resources, to enhance the performance of firms in their external environments...
- CausalityCausalityCausality is the relationship between an event and a second event , where the second event is understood as a consequence of the first....